News that Ikea is rolling out an online shopping platform in China – its first in the Asia-Pacific region – could be a sign that Western retailers are at last reacting to rising costs and shifts in consumer shopping behaviour. But what has taken them so long?
Despite operating online models successfully in the UK and other parts of Northern Europe, it has taken Ikea seven years to get to a similar point in China. With stores in major cities including Shanghai and Beijing, Ikea has followed a similar strategy to many other Western retailers; investing in bricks and mortar outlets in China’s thriving tier 1 and 2 cities.
However, consumer demand has been growing right across China and while rising costs remain an issue, Western retailers urgently need a strategy to develop this market potential. Read more
A graphic look at Egypt's economy | Click to enlarge
With the military reoccupying centre stage in Egypt, what does this mean for democracy and the economy? Since the July ouster of President Mohamed Morsi, detentions have continued and more than 1,000 of his Muslim Brotherhood supporters have been killed. The FT’s special report on Egypt takes a hard look at the country’s political and economic future, writes Peter Chapman. Read more
Can North Korea’s Kaesong industrial park attract foreign investors, given its lack of appeal to South Korean ones? Apparently not. Seoul’s unification ministry in charge of inter-Korean relations said on Wednesday that Swedish furniture maker Ikea had turned down a request from Seoul to set up a plant in the North Korean border city. Read more
Ikea’s flagship store in Beijing is among the group’s most heavily trafficked in the world – with more than six million visitors in 2011. But how much time and effort does it take to translate those visits into sales?
It’s an important question given that the Swedish furniture giant has this week announced plans to boost the number of stores in China from 11 to 40 over the next seven years. Read more
Coming to India
There will be haggling for every last Daim bar and the meatballs will be doused in chutney. There will be queues of people complaining that their furniture has arrived unassembled. And a whole new professional class will emerge – the DIY-wallas.
After months of discussions, on its second attempt, Ikea has received approval from India’s foreign investment board to open fully-stocked stores in the country. Read more
Ikea may have thought its long struggle to enter the Indian market was over. Having waited patiently for the government to push through a series of reforms aimed at opening up the country’s retail sector – to single brand stores at least – victory appeared at hand.
But, having got to the front of the line, the Swedish group appears to have run up against an unexpected foe: the meatball police. Read more
Ikea’s decision to invest €600m in the first stage of a possible €1.5bn investment over the next 15-20 years gave a precious boost to the Indian government on Friday – reinforced by Moody’s on Monday, when it declined to follow Fitch and S&P’s downgrades of India’s outlook and held its own outlook steady.
Anand Sharma, trade and industry minister, made the point talking with reporters in Belgium: “Investors [have shown their] confidence in India, irrespective of the country’s rating… the fundamentals of our economy are strong and will remain strong.” Read more
However much India’s government prevaricates over investment laws for foreign retailers, the country’s consumer story is still a compelling one. Ikea, the Swedish furniture retailer, said on Friday it was still keen on India, even if India isn’t necessarily keen on it (yet).
Despite the on-off reform of FDI in retail, Ikea plans to invest up to €600m in the country. A smart move? Chart of the week takes a look. Read more
For those who moan endlessly about unsightly cables running out of the TV or DVD player, help may at last be at hand. Sweden’s Ikea and China’s TCL Multimedia have come up with an answer, furniture with built-in appliances. Read more