Ikea China is planning to hold a massive sale throughout the vast country. The company announced this week that it would be offering significant discounts on over 250 of its products, or around 5 percent of its total inventory. The sale, which will start on September 1, is the company's latest move to take advantage of the country's growing demand for quality international products.
The vice president of Ikea's Chinese unit, Zhang Lina, revealed in a statement that the discounts that will be offered in China in the coming weeks should result in total savings of about 200 million yuan, or roughly $29 million, for consumers.
Apart from the discounts, Zhang revealed that Ikea China will be introducing around 2,000 new products into the Chinese market during its 2021 fiscal year. He added that around 700 of the new products will be those built to have sustainable and eco-friendly characteristics.
In line with Ikea's global green initiative, Ikea China announced that it will be having a much greener approach to its deliveries. As of the moment, Ikea utilizes fully-electric delivery vehicles in five major Chinese cities. Ikea plans to increase that number to 17 major Chinese cities by next year. The company stated that it will be acquiring more new energy vehicles to handle its deliveries.
Zhang noted that even with the discounts, the company's products are still relatively expensive when compared with competitors. However, the company believes that Chinese consumers still gravitate toward products with high costs, as higher prices usually indicate higher quality. Global consultancy firm KPMG found that over 51 percent of consumers do prefer more expensive products than significantly cheaper alternatives.
Analysts at Bain & Co revealed that demand for high-end lifestyle products in China has continued to increase over the past quarters. Pent-up demand due to the pandemic is expected to further bolster demand in the coming months, and the momentum will likely continue for the short term.
Ikea is aware of the trend, which is why it has chosen to continue with its expansion plans despite the global health and economic crisis. Over the past 12 months, Ikea has opened seven new stores in China. Last month, the company opened a smaller outlet in Shanghai to take advantage of growing demand in the megacity.
