Ikea plans to close another store in China

By Laura He, CNN Business

Ikea has already closed a store in mainland China this year and may close another in Shanghai in early July.

The Swedish furniture and homewares chain said on Monday it was considering closing its store in the city’s Yangpu district in response to changing shopping habits. during the pandemic.

“To better meet growing consumer demand for online consumption and services, as well as increased preference for expedited convenient delivery during the epidemic, Ikea China will introduce customer touch points in the Shanghai market. “, he said in a statement posted on WeChat. .

“However…Ikea China has conducted a comprehensive analysis of Yangpu Store’s long-term feasibility and is considering not keeping it,” he added.

Several Western companies have recently said they are reassessing their operations in the world’s second-largest economy, some due to the impact of the pandemic and Beijing’s strict adherence to its zero-Covid policy.

Ikea opened its first store in mainland China in 1998, starting in Shanghai, where it now has five stores, including the one in Yangpu. The company currently has 37 stores in mainland China.

The retailer’s expansion hit a snag earlier this year as China’s consumer spending was significantly hit by Covid outbreaks and strict lockdown measures. Shanghai, the country’s most populous metropolis with 25 million people, was under a strict two-month lockdown until recently.

In April, Ikea closed its store in the southwestern city of Guiyang just two and a half years ago. after opening. Sales in the region would be handled through online channels, the company said at the time.

Ikea’s move is the latest in a series of changes major Western companies have made to their businesses in mainland China in recent months. Last week, Nike deactivated its Run Club app in China and said it would roll out a “localized” platform for Chinese runners in the future.

Earlier this month, Amazon announced the closure of its Kindle bookstore in China, as well as halting sales of Kindle devices to retailers.

Airbnb also plans to remove all of its listings in the country and instead focus on outbound travelers. The company made this decision due to rising costs which were aggravated by Covid-19.

– Michelle Toh of CNN Business contributed to this report.

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