The European City IKEA Shenzhen Shopping Mall and China South Trade Center broke ground yesterday. After the project is completed, it will become the Asia-Pacific purchasing center of IKEA.
The whole "European City" project will be started one after another before the beginning of next year and will be opened in early 2008. In terms of floor space and building area, IKEA Shenzhen is the largest project.
It is understood that Europe City will also gather three other European retail giants-British B&Q, German Metro and French Decathlon. They intend to take Shenzhen as an important part of their procurement circulation, or move their procurement center or regional headquarters to Shenzhen.
IKEA settled in Shenzhen four years later.
By the end of this month, IKEA will open four stores in Chinese mainland. In Guangdong, IKEA currently has only one store in Guangzhou.
I thought this day would never come, but today it has finally come true. Du, president of IKEA Asia Pacific, spoke at the groundbreaking ceremony, which reflected the tortuous course of the project.
Ye Minhui, secretary of Shenzhen Nanshan District Party Committee, also said that four years of efforts have made people feel the preciousness of today.
It is understood that "European City" was named by Ye Minhui when he was the director of Shenzhen Foreign Trade and Economic Cooperation Bureau. He said that the "European City" project is a major investment attraction project in Shenzhen, and it is also an important measure to improve the layout of commercial outlets in Nanshan and vigorously develop the tertiary industry. According to Shenzhen Commercial Network Planning (2006-20 10) issued by Shenzhen Municipal Government in April, 2005, Shahe East Area, where the Continental City project is located, is planned and positioned as one of the eight characteristic commercial districts in Shenzhen, and its positioning is:' It will be built into a home-improvement characteristic commercial district facing the Pearl River Delta and gathering internationally renowned brands'.
Promote China products through commercial chain network.
Europe City includes many commodities such as home, building materials, sports and leisure, comprehensive supermarkets, etc., which can provide customers with more unique shopping enjoyment.
Ye Minhui told reporters that when negotiating the import projects, in addition to considering attracting these multinational giants to open stores and promote their products in Shenzhen, a very important intention is to hope that these multinational chain giants will set their procurement centers in the Asia-Pacific region and even the world in Shenzhen, effectively promoting China's manufacturing exports.
According to relevant sources, Continental City will enhance Shenzhen's radiation ability to related manufacturing industries in South China and the Pearl River Delta region, and accelerate the pace of Shenzhen becoming a regional logistics procurement center.
Europe City Project is located at the intersection of Beihuan Avenue, Shahe East Road and Guangzhou-Shenzhen Expressway, covering an area of/kloc-0.05 million square meters, with a planned construction area exceeding/kloc-0.00 million square meters and a planned total investment exceeding/kloc-0.00 billion yuan. Europe City includes home, building materials, sports and leisure, comprehensive supermarkets and other formats. Ye Minhui, secretary of the Nanshan District Party Committee who actively promoted this project, said that Europe City is both a purchasing area and a leisure area, so it adopted the form of "Moore".
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After nine years in China, IKEA, which has successively settled in Shanghai, Beijing, Guangzhou and Chengdu, finally decided to "March" into Shenzhen, and on April 16, it opened the largest standard store in South China in Nanshan European City, Shenzhen. On March 2 1, Jon Abrahamsen, a 33-year-old sales manager of IKEA China, came to Shenzhen to be interviewed by a reporter from Shenzhen News Network.
Reporter: Can you briefly introduce this store to be opened in Shenzhen?
Jon: The IKEA store in Shenzhen will be the largest IKEA store in South China, and it will be the most modern IKEA store compared with other stores in China. The store covers an area of 30,000 square meters, including more than 7,500 home solutions, a 750-seat restaurant and 1200 parking spaces. I am most proud that Shenzhen Store has the first complete kitchen series in China, because I know how enthusiastic Shenzhen people are about food.
Reporter: IKEA has a history of nearly 65,438+00 years in China, and now it has opened stores in four cities: Beijing, Shanghai, Guangzhou and Chengdu. And IKEA set up a purchasing center in Shenzhen a long time ago. Why does it choose to open a new store in Shenzhen now? How does IKEA Shenzhen compare with IKEA stores in other cities in China?
Jon: This process is very complicated. The location selection of IKEA is a complicated process, but the most gratifying thing is that it will open soon. Compared with other IKEA stores in China, IKEA Shenzhen has the most complete kitchen series, which cannot be presented in other markets in China. IKEA Shenzhen has also made some adjustments according to the needs of Shenzhen people. It will be fashionable and provide many good solutions in the use of balconies. Moreover, parking spaces and restaurants in Shenzhen are relatively large.
Reporter: The new IKEA store in Shenzhen is located in the European City in Nanshan District, and the new B&Q store is also in the European City. Do you think there is competition?
Jon: We are glad that our neighbor is B&Q. I am very satisfied with this. This will help to form a business circle in a short time and let the public have a better understanding of improved housing. Make them feel that this is where they belong. This will help to build this place into a new home business circle.
Reporter: There are many furniture retailers in Shenzhen, such as B&Q and Le Anzhu. What competitiveness and advantages do you think IKEA has compared with them?
Jon: The biggest advantage of IKEA is its mastery of home knowledge, which it has been focusing on for the past 60 years. IKEA provides a total solution. From sofas to decorations to fabrics, IKEA has unique insights and solutions, covering all aspects of home life. The strength of IKEA also lies in the enthusiasm and inspiration contained in the products.
Reporter: What do you think of the home retail market in Shenzhen? What stage do you think the home retail market in Shenzhen is at? Is it mature compared with Beijing, Shanghai and other places?
Jon: The home retail market in Shenzhen is a huge developing market. From the perspective of home manufacturing, Shenzhen is already a mature market. Shenzhen's home market is very similar to Beijing and Shanghai, and both are in a relatively mature stage. There are many well-known brands and local manufacturers, and some brands perform best in Shenzhen market. The competition in Shenzhen local market is very fierce.
Reporter: Should IKEA set a sales target for itself after entering the Shenzhen market? What is this goal?
Jon: Within one year of entering the Shenzhen market, the most important goal is to attract as many tourists as possible and let as many people come to IKEA. I hope there will be 5 million tourists in a year. In terms of sales, we think the number is not the most important, but how many people arrive is more important. I hope IKEA can enter the life of Shenzhen citizens in a short time.
Reporter: Shenzhen's home retail market often hopes to attract as many customers as possible by means of price reduction and discount. Will IKEA also take some preferential activities to attract customers at the beginning of its opening?
Jon: I think the most important thing is to start a business successfully. The shopping center itself is the biggest attraction. In the retail market, there is indeed such a trend (discount prices). Ikea is a long-term company. Ikea wants to make people feel that this is a value-for-money place, so it will not attract customers by fighting for prices.
Reporter: In foreign countries, IKEA is like a home supermarket. The prices of its products are not high, but they are a bit high in China. In a sense, IKEA products even become luxury goods? Has IKEA considered lowering the price of goods so that more people in China can buy IKEA products conveniently?
Jon: That's a good question. Since 10, considering this demand, the price of IKEA products in China market has dropped by as much as 60%. IKEA remains committed to further reducing the price of goods in China. The way to reduce commodity prices is to open more shopping malls and sell more. In China, we achieve this goal by optimizing supplier channels. However, it should be emphasized that in this process, IKEA will not compromise on quality issues. We still provide high-quality solutions, and then let more people think that IKEA's things are actually quite cheap.
Reporter: Shenzhen is an immigrant city. Do you know the living habits of Shenzhen people? Will IKEA provide some different services as a result?
Jon: To be honest, I don't know much, but I've seen some. People in Shenzhen always like to regard the balcony as another room, a place to store things. In fact, the balcony should be the most relaxing place at home. Ikea wants to tell you that the balcony can also be a better place for leisure. Therefore, IKEA Shenzhen also provides many good solutions in the use of balconies.
IKEA Sweden, which has been in China for eight years, can describe the speed of opening stores in China and the range of price reduction. In the past eight years, it only opened three stores in China, but in the past five years, the price of its products in China has dropped by 54%.
Du, president of IKEA Asia Pacific, revealed in an exclusive interview with shanghai securities news that IKEA will open more stores in China and enter more cities in the next step, but it will not expand in China by acquiring other retailers, but will insist on buying land to build its own stores.
Du said: "The expansion of IKEA in China will be mainly based on independent investment. If five to 10 stores are built in China, the number of IKEA stores in China will account for an important share of its total global stores. "
By August 2006, IKEA had established 239 stores in 34 countries and regions around the world, and IKEA established three stores in Shanghai, Beijing and Guangzhou in 1998, 1999 and 2005 respectively. Among them, the Beijing store has a business area of 43,000 square meters, which is the second largest standard store of IKEA in the world, second only to the Stockholm store, the largest store in Sweden. Du said that in fiscal year 2006, IKEA's sales in China still increased by 30% compared with last year.
Compared with B&Q abroad and Oriental Home in China, the expansion speed of IKEA is really slow. Du believes that IKEA is a private company, not a listed company, and will not sacrifice anything for the benefit of shareholders. IKEA has a long-term vision and does not seek quick returns, so every project needs long-term investment.
"Every new IKEA store project has a lot of capital investment, and we need to expand more cautiously." Du said:
Independent investment by Du is the management mode that IKEA has always insisted on buying land and building its own store. IKEA first rented land in Beijing and Shanghai to open stores. However, after finding the right place, we closed the old shop and built a new one. Among them, the new store in Shanghai invested 60 million US dollars, and the new store in Beijing reached nearly 654.38 billion US dollars.
Du revealed that IKEA will open a store in the western city of Chengdu this year, the first self-built store in Shenzhen will break ground in early 2007, and the self-built store project in Guangzhou is also in full swing. According to overseas media reports, IKEA plans to open seven branches in the next five years.
Because IKEA is not a pure retailer, it also has strong upstream production capacity. All its products are designed by ourselves and we have our own factory. In this way, IKEA will not be forced by manufacturers to expand channels faster like other retailers. At present, 23% of IKEA products come from China. The turnover of IKEA in fiscal year 2005 (from September 2004 1 to August 3, 2005/) was 654.38+0.48 billion euros.
The next strategy is to continue to reduce prices.
In order to compete with competitors, IKEA is also accustomed to and uses price wars in China. Since 1998, the price of products sold by IKEA in China market has dropped by 54%. Du, president of IKEA Asia Pacific, said that although IKEA stores around the world reduce prices every year, the price reduction is the largest in China, and the prices of many products in China are the lowest among 239 stores around the world.
According to the estimate of Bain Management Consulting, the growing personal home improvement market in China has reached $654.38+0.5 billion, and IKEA's share in this market is 43%.
At the same time of price reduction, IKEA is also trying to reduce costs. In 2004, IKEA moved its Asia-Pacific procurement center from Singapore to Shanghai. At present, IKEA has more than 370 suppliers and more than 200 processing plants in China, which is an important guarantee for IKEA to reduce prices.
Du said that IKEA has reduced costs in a better way. Because the growth of IKEA sales has stimulated a large number of purchases, the unit price can also be reduced, and the company's growing sales have also given IKEA a competitive advantage.
Du said that in fiscal year 2007, IKEA plans to increase its sales in China by 40%. In China, the focus is still on continuing to reduce product prices, and the new low-price range with IKEA characteristics will also change accordingly, and more new products will appear on the market. This year, IKEA will face all female consumers and adjust its target customers from white-collar workers to female consumers.
Related topics: brand acquisition
Further reading: IKEA China's Catalogue has been greatly simplified.
While B&Q was fighting with its suppliers, IKEA, the world's largest household goods retailer, accelerated its layout in China.
On August 30th, at the "Media Meeting in FY2008", IKEA revealed its "ambition" in China: it will open three new stores in Nanjing, Shenzhen and Dalian next year, and expand at the rate of opening two or three new shopping malls every year. Among them, the new shopping center in Dalian will surpass the current scale and capacity of IKEA Beijing and become the largest IKEA shopping center in the whole Asia-Pacific region.
Since 1998 entered China, IKEA has only four stores in China: Shanghai, Beijing, Guangzhou and Chengdu. Compared with 4 stores in 9 years, it seems that the opening speed of 2-3 stores every year is a bit fast.
Du, president of IKEA China, believes that IKEA decided to speed up the opening of the store because it finally found a successful business model after years of exploration, which also marks the third stage of IKEA's business development in China.
Three stages
From 65438 to 0998, IKEA Group from Sweden officially entered the China market and opened its first store in Shanghai. At that time, in the global map of IKEA, China was only an important processing and purchasing place for IKEA.
This neglect directly leads to the extremely slow development of IKEA's business in China. Apart from the first store in Shanghai, IKEA has only relied on two stores in China for five years.
In Du's view, these five years are the first stage of IKEA's entry into China, which he calls the "initial entry period". During this period, IKEA gradually discovered that although consumers in China like IKEA products very much, they don't like the prices of goods in IKEA stores. However, due to the limited number and scale of stores, it is difficult for IKEA to significantly reduce prices to cater to consumers in China.
IKEA, which has been in China for five years, is also looking for changes, but its approach is conservative. Ikea began to expand the size of its old stores and moved them according to the standards of IKEA stores in Europe. The development of IKEA in China has thus entered the second stage, that is, the "standardization period".
After "fine-tuning", IKEA gradually tasted the sweetness. According to the latest data, in fiscal year 2007, IKEA made great achievements in four shopping malls in China, and its sales in China increased by 38%. More than 654.38+04 million consumers visited IKEA.
However, in the global territory of IKEA, the proportion of sales of IKEA (China) in sales is still very small, only about 65,438+0%, and only 35% to 40% in the Asia-Pacific region, which obviously does not match the position of IKEA in the global market.
"Starting from 2008, IKEA will accelerate the pace of opening stores, with the goal of gradually covering first-and second-tier cities in China at the rate of opening 2-3 new stores every year. New shopping malls in Nanjing, Shenzhen and Dalian will meet with consumers next year. " Du was a little excited when talking about IKEA's expansion plan. The development of IKEA (China) has also entered the third stage, that is, the "rapid development period".
With the opening of three new stores in Nanjing, Shenzhen and Dalian, there is also a second store in Shanghai. Xu Lide, the public relations manager of IKEA China, told the reporter that the location of the second store in Shanghai has been completed and will meet with consumers in 2009. It is reported that the second store in Shanghai will become the third largest store in the world by then.
In South China, Liwan District of Guangzhou has signed a letter of intent for investment cooperation with IKEA, with an estimated investment of USD 50 million to build the largest IKEA store in South China.
If these plans can be realized, IKEA can be seen in Northeast China, North China, East China, South China and Southwest China, and IKEA will also complete the layout of "half the country" in China.
Ikea model
In the European market, IKEA products are considered as low-end consumer goods. However, in China, IKEA products have always been regarded as "luxury goods". Customers are usually very satisfied with IKEA products, but are discouraged by IKEA prices.
This is because IKEA's products are independently designed and produced, and the pricing of goods is based on the euro. This pricing standard directly led to the "wide acclaim" of IKEA products.
"1 euro can't buy anything in Europe, but in China, 10 yuan can buy a lot of things." Du analyzed the difference between euro 1 and RMB 10.
Therefore, "Price reduction is the best competitive strategy of IKEA in China".
In order to reduce the cost of products to a greater extent, since 2003, IKEA has continuously increased the intensity of "localized procurement", and established five major procurement centers in Harbin, Qingdao, Shanghai, Guangzhou and Yunnan, which has made IKEA's procurement volume in China rise continuously, accounting for more than 20% of its total global procurement, and surpassed Poland to become the largest procurement country of IKEA in the world.
At the same time, IKEA is constantly improving its logistics system. More than two months ago, the logistics distribution center set up by IKEA in Fengxian, Shanghai started construction. The planned investment of this project exceeds 65.438+0.2 billion USD, and the storage capacity exceeds 300,000 cubic meters. Upon completion, the base will become the strategic procurement center of IKEA in the whole Asia-Pacific region.
All products in IKEA stores come from the research center of IKEA Sweden headquarters. The center is responsible for the design and research of all IKEA products. Thousands of IKEA suppliers around the world complete production and processing respectively. Finally, according to the specific requirements of 259 IKEA stores around the world, the purchase is completed through the local purchasing center.
"In the supply chain, IKEA manages its own upstream R&D and downstream distribution, and outsources the manufacturing with meager profit in the middle, which is the fundamental reason why it can keep the price low in the world home market and cannot be simply copied." Eisenyong, sales manager of IKEA China, said proudly.
After a series of measures, such as local procurement and improving the logistics system, the price of IKEA products in China has dropped again and again, with an average drop of more than 46%.
"In FY 2008, IKEA will continue its price reduction strategy. Starting from September this year, IKEA will launch 1 150 products with lower prices in various shopping malls, of which the price of Sudan series products has been reduced by 50 million yuan. " Eisenyong said.
"Can drop down. Our price in China is basically the lowest in the IKEA global system. " Xu Lide, public relations manager of IKEA China, said.
Only when the number of stores reaches a certain number can we give full play to the scale effect of logistics and supply chain. This is the golden rule for retail industry to reduce costs. For IKEA, which is constantly pursuing "lower prices", perhaps what remains to be considered is how to open IKEA stores to the north and south of the country.