Sunday, February 25, 2007

IKEA-Beijing

economy - News: IKEA is packed and people are buying

Correspondent Tim Johnson noted it with amazement in his weblog. How was it back in 2003?

In the furniture section, every single chair was taken. Shoppers weren’t trying them out, mind you, but resting. In the attresses section, shoppers were sprawled all over the beds. My wife swears she saw one couple playing cards on a bed, looking like they had found the most comfortable place in Beijing to spend the afternoon.

We are having here more often a look at this strange creature called the Chinese consumer. The jury is still out concerning the future of not only IKEA in China, but also of Dell, Wal-Mart and Best Buy. What have all four in common? Outside China they are market leaders because the can provide good quality for the lowest possible price. What did they do in China? They abolished the strategy that has helped them so much elsewhere. Isn't that funny: they cannot compete with the Chinese.

The issue came also up at the entertaining lecture a few weeks ago, where Access Asia's Paul French gave his take on the issue. On IKEA he concluded that having only a few stores in the whole of China is probably an indication they are not doing that well. Why would they otherwise not open more stores.

(As you might notice: here is an WTO-column brewing. I might come back on this issue later again.)

(Picture by the China Daily)

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