China remains an important market for IKEA, contributing significantly to the company’s global revenue. Photo credit: CHZU/Shutterstock
IKEA has announced that it will close seven stores in mainland China starting in February. 2, indicating a significant adjustment in domestic operations. The closure is part of a broader strategy to streamline operations and focus on sustainable growth in one of the company’s largest international markets.
The affected stores include stores in Shanghai Baoshan, Guangzhou Panyu, Tianjin Zhongbei, Nantong, Xuzhou, Ningbo and Harbin, covering both major and secondary urban areas. Despite these closures, IKEA will continue to operate 34 stores across China, a combination of existing larger stores and a growing number of smaller stores in urban centers.
Company representatives emphasized that the decision was not a setback but a strategic optimization, reflecting the company’s desire to align store locations with changing consumer behavior and market potential. IKEA said the move will enable it to invest in new formats and digital channels, ensuring a stronger and more flexible presence in China.
Expansion of small stores and digital channels
A targeted approach to urban retail
With the closure of IKEA, the company also plans to open at least 10 smaller stores over the next two years. These new outlets are located in major urban centers such as Beijing, Shenzhen and Dongguan and are designed to provide a convenient shopping experience with a focus on city centres.
By downsizing its stores, IKEA can quickly adapt to local demands, reduce operating costs compared to larger suburban stores, and remain accessible to urban consumers who prefer shorter trips and quick purchases. This approach reflects a broader trend in retail, where compact, flexible formats complement e-commerce and digital services.
In addition to store expansion, IKEA is increasing investment in digital sales channels, including mobile applications, online ordering platforms, and partnerships with local e-commerce providers. The combination of physical and online presence allows the company to reach a wider audience and maintain the omnichannel convenience that has become a key element in urban retail.
Market conditions and operational efficiency
Adapt to changing consumer patterns
China’s retail environment has changed significantly in recent years, with consumer preferences shifting towards convenience, speed and digital integration. IKEA’s decision to close unprofitable stores is a response to these evolving trends.
The closure will allow the company to reallocate resources to markets with greater demand and growth potential, particularly in large cities where urban populations are expanding and shopping habits are changing. IKEA’s focus on small stores and digital channels allows it to remain relevant and efficient as consumer behavior continues to evolve.
This strategy also addresses operational efficiency. Large stores require significant investment in staffing, logistics, and inventory. IKEA is reducing fixed costs by closing underperforming stores while maintaining a large presence in key regions. At the same time, customer access continues to be wide-ranging and convenient thanks to the deployment of smaller stores and digital solutions.
Important points
- IKEA plans to close seven stores in China by February this year, including stores in Shanghai, Guangzhou and Tianjin.
- The closures are part of a strategic shift to strengthen smaller stores and digital sales channels.
- More than 10 small-format stores are expected to open in major cities over the next two years.
- IKEA will continue to operate 34 stores across the country, combining traditional large stores with new stores mainly in urban areas.
- The strategy reflects a response to changing consumer behavior and urban shopping trends, while improving operational efficiency and resiliency.
IKEA’s prospects in China
Build a stronger presence
China remains an important market for IKEA, contributing significantly to the company’s global revenue. This closure is designed to enhance long-term competitiveness and does not reduce the company’s footprint.
By focusing on small stores, digital channels and strategic urban expansion, IKEA aims to maintain a flexible and resilient presence in a complex and rapidly evolving market. Analysts suggest that this approach allows the company to meet changing customer needs, optimize costs and respond quickly to fluctuations in consumer demand and economic conditions.
IKEA’s strategy reflects a broader trend among international retailers in China, combining physical stores, small urban outlets and digital platforms to create a seamless shopping experience. The company’s approach is designed to balance growth and efficiency, enabling it to maintain a leading position in one of the world’s most competitive retail environments.
