China remained the fastest growing IKEA Group market: in 2015, IKEA China has set a record-breaking total sale of RMB 10.5 billion, 18% growth than 2014. To maintain its dominance in China market, IKEA’s next move in China this year will be eCommerce development.
IKEA is ambitious about eCommerce
Despite its strong offline sales performances, the Swedish homeware retailer does have serious plans to grow its ecommerce business significantly over the next five years.
In an interview last August, IKEA’s CEO Peter Agnefjaell revealed that online sales exceeded 1 billion euros for the first time in the year ended in August, thereby accounting for about 3 percent of total sales. “it will probably be 5 billion euros in five or six years from now”, Agnefjäll predicts.
IKEA has 30 billion euros worth of sales, with some 80 percent of it generated in Europe. The company aims for 50 billion euros in revenue by 2020, which would correspond with an average growth rate of about ten percent a year. This milestone should be achieved partly through growing its online business. And there’s still potential growth in this category, as IKEA operates in 42 countries globally, but currently has an online offering in just 13 of its markets. With that being said, to expand eCommerce to more markets will be IKEA’s top priority.
IKEA online shop in United Kingdom
Future is bright in China eCommerce
IKEA has a strong presence in Europe, with Germany being the company’s biggest market. Still, the Swedish retailer sees growth in China. “We see that the underlying Chinese economy is growing strong,” he said.
the company says adapting to Chinese consumers has been a key part of its strategy, and eCommerce will be its tool to reach more Chinese customers. The furniture giant has 18 stores in China, all in tier-1 and tier-2 cities. The new eCommerce will definitely bring more customers from small cities closer to the brand itself.
IKEA online shop in United Kingdom
Although IKEA jumped to China eCommerce rather late, but there is always a sliver lining. Agnefjaell, the CEO thinks, “We can now skip a step in the technology development, straight to mobile and tablet.”
China has the world’s largest astest-growing eCommerce market, and Chinese consumers live and breath with mobile eCommerce. In fact, nearly half of total eCommerce sales came from mobile in China. As long as IKEA set up the right strategy in penetrate China eCommerce market, the future will be absolutely bright.
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