After Closing Its Store In Guiyang Last April, IKEA Considers Closing Its Store In Shanghai, Why?

Illustration of an IKEA store in Shanghai, China. (Wikimedia Commons/MNXANL)

JAKARTA - IKEA, Swedish furniture and household goods chain, said it is considering closing one of its stores in Shanghai, which is located in Yangpu District to be exact.

Previously, IKEA had closed another store in China this year. The move is said to be in response to changes in spending patterns during the COVID-19 pandemic.

"To better meet the growing consumer demand for online consumption and services, as well as further preference for expedited convenient delivery during the epidemic, IKEA China will introduce a customer point of contact in the Shanghai market", he said in a statement posted on WeChat, quoted by CNN on June 14.

"However, IKEA China has carried out a comprehensive analysis of the long-term viability of the Yangpu Store, and is considering not keeping it", he added.

Several Western companies recently said they were reassessing their business in the world's second-largest economy, in part because of the impact of the pandemic and Beijing's strict adherence to Beijing's zero-COVID policy.

IKEA opened its first store in mainland China in 1998, starting in Shanghai, where it now has five stores, including one in Yangpu. In total, IKEA currently has 37 outlets in mainland China.

Retailer expansion hit a snag earlier this year, as China's consumer spending took a significant hit from the COVID-19 outbreak and strict lockdown measures Shanghai, the country's most populous metropolis with 25 million residents, has been in a tight lockdown for two months. this.

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

IKEA's move is the latest in a series of changes that big Western companies have made to their businesses in mainland China in recent months.

Last week, Nike disabled the Run Club app in China, saying it would launch a 'local' platform for Chinese runners in the future. Earlier this month, Amazon announced the closure of its Kindle bookstore in China, as well as the cessation of sales of Kindle devices to retailers.

Even so, Airbnb also plans to remove all of its listings in the country and concentrate on outbound travelers. The decision was taken by the company due to the mounting costs exacerbated by COVID-19.