Ikea, China, and the power of 12-cent ice cream

Posted By Travis Daub Wednesday, April 19, 2006 - 6:06 PM Share

Ikea opened its second largest store in the world last week, where else, but in Beijing. The new complex, covering more than 26 acres, offers China's new generation of homeowners 7,000 products—and at up to a 70% discounted price over what they’d cost in the United States. The price cuts aren't hard to swallow for Ikea since a large portion of their inventory is manufactured in China.

According to Mei Fong in the Wall Street Journal (subscription required), Ikea has had to slash prices to interest Chinese bargain hunters, overcome the perception that western products are too expensive, and to stay competitive with knockoffs of their own products for sale in local stores. Low prices, and the lure of 12-cent ice cream cones, seem to be working. Annually, Ikea expects to serve 6 million customers at the Beijing location alone. (A plea to hoards of Ikea customers: have mercy on the staff).

Item	Price in the U.S.	Price in China
Ektorp armchair	$349	$112
Ticka Alarm Clock	$7.99	$3.61
Poäng chair	$99	$49.15

Price figures from the Wall Street Journal

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