Posts tagged ‘Ikea’

03/10/2016

Furniture Retailing With Chinese Characteristics – China Real Time Report – WSJ

At the opening of Zaozuo’s first furniture store this month in Beijing, a shopper snoozed on a couch while others clambered onto wall-mounted shelves to take selfies perched in chairs.

Welcome to furniture retailing with Chinese characteristics.Online furniture startup Zaozuo Zaohua Zworks Ltd. opened the outlet in an upscale mall after hitting resistance from customers wary of buying bulky items without so much as a feel of the fabric, let alone a bit of shuteye.

Liu Yusi, a 33-year old human-resource executive living in Beijing, said the showroom is a good idea given that buying large pieces of furniture without a test drive can be a leap of faith, although she was a little disappointed there weren’t any beds on display. “Maybe the store is too small,” Ms. Liu said. “But I think a mattress is something you really need to lay on before you decide to buy.”

Zaozuo has tried to distinguish itself from competitors by letting customers vote on the design and style of furniture items at the prototype stage before they’re mass produced, a strategy it says reduces inventory and cuts cost. This is a Chinese adaptation of business models used by the likes of U.S. website Threadless.com — which conducts online polls of crowd-sourced T-shirt designs before producing winning entries – and by crowd-funding sites that have investors vote on ventures they’re willing to fund.

Zaozuo’s customers vote for the designs they’d like to buy. PHOTO: ZAOZUO, DON ARBOUR/THE WALL STREET JOURNAL

The approach has its skeptics. Guangdong Weiyuhua Furniture Co. says it thinks Zaozuo’s voting is a gimmick and questions whether selling furniture online is sustainable. “It targets a few rich people in cities like Beijing or Shanghai,” said company sales manager Li Songzhi. “Traditional furniture companies like ours have real stores all over China.”

With nearly 700 million online users, Chinese consumers are driving explosive growth in the e-commerce sector, undercutting traditional retailers and leaving new online ventures fighting for an edge. Zaozuo co-founders, Stanford business school graduates Shu Wei and Guan Zishan, say China’s struggling manufacturing sector needs a wakeup call as it battles rising debt and excess capacity.“

The old system is not working very well,” said Ms. Shu. “That was the starting point of our business model.”

One potential problem with the company’s voting system is possible voter fraud, says Travis Wu, China research director with consultancy Forrester Research Inc. “In China, everything is a bit tricky, and lots of people try to game the system,” Mr. Wu said. That could see designers tilt results toward their own models, for example, or allow competitors to steer Zaozuo into producing money-losing items, he said.

Another concern: with Zaozuo opening a showroom, it risks driving up costs and undercutting its advantage over traditional furniture makers. Mr. Guan says users must be registered before voting, the company watches carefully for unusual online activity and the new store is not a major investment.

Zaozuo, which attracted several thousand curious shoppers to its store launch on a recent weekend, sees itself inhabiting a competitive space between expensive designer brands and mass marketers like Sweden’s IKEA, a company that attracts its share of showroom lounge lizards. On any given weekend, entire families can be found snoozing on beds in Ikea’s massive showrooms, luxuriating in the air conditioning and enjoying the inexpensive food.

China’s fragmented furniture industry with around 5,000 large companies and combined revenue of 244.5 billion yuan [$37.3 billion] in 2015, up 16.1% increase from the previous year, is tradition-bound and due for a shakeup, say online companies. Internet furniture companies only command a tiny slice of the market but are growing rapidly. Privately held Zaozuo said sales are increasing by 40% annually although it has yet to break even. MZGF Furniture Studio Co., another online firm, said sales have been expanding by as much as 200% year on year in some months.

Zaozuo, which works with 50 Chinese factories and more than 80 European designers, has attracted $17.5 million in venture funding and hopes to eventually go public. Anna Fang, chief executive of venture capital group Zhen Fund, which has invested $1.3 million in Zaozuo, said prospects for the industry are promising but the startup may need to shorten delivery times, which range from three to 35 days. “Ikea can get furniture to you right away,” she added.At its store opening, Zaozuo said it tried to discourage shoppers from getting too comfortable on its furniture. “The customer might be comfortable, but the image is not that good for other customers who can’t feel the fabrics if someone’s sleeping on it,” said Mr. Guan. “Maybe they do it because they’re tired. Shopping can be very tiring.”

Source: Furniture Retailing With Chinese Characteristics – China Real Time Report – WSJ

Advertisements
08/04/2015

Ikea bans customers sleeping on showing beds – China – Chinadaily.com.cn

Ikea has introduced new rules that forbid store visitors from sleeping on showroom sofas and beds, but the rule is proving hard to enforce, the Beijing Youth Daily reported Monday.

Ikea bans customers sleeping on showing beds

The world’s largest furniture retailer introduced the rule because many customers, both adults and children, have been sleeping in stores, creating a scene and affecting the experience of other customers.

A middle-aged woman said Ikea beds are comfortable so her friends “take a nap” there sometimes, according to the newspaper.

Pictures also show young couples lying on the sofas, their faces covered by pillows.

The newspaper said some customers take off their shoes and lie on the beds as if they were in their own homes.

Ikea encourages customers to sit or lie on beds for a short while to experience their quality, but many sleeping customers occupy the display pieces for too long, a staff member says.

The air-conditioned megastore in Beijing is known for attracting customers in summer who are looking to escape the heat.

Workers in Ikea said it is hard to enforce the no-sleeping rule as many of the perpetrators are often elderly or young children, and some customers simply ignore their requests.

via Ikea bans customers sleeping on showing beds – China – Chinadaily.com.cn.

15/08/2014

Online sites shake up hidebound retailing in India – Businessweek

Finding a way into India’s vast but vexing market has long frustrated foreign retailers. Now, overseas investors are pouring billions of dollars into e-commerce ventures that are circumventing the barriers holding back retail powers such as Wal-Mart and Ikea.

Some investors see India as the world’s next big e-commerce opportunity, with the upcoming mammoth public stock offering of Chinese online giant Alibaba hinting at the potential.

Online shopping is still in its infancy in India at $2.3 billion of an overall $421 billion retail market in 2013, according to research firm Crisil. But it is growing fast and the potential of reaching a mostly untapped market of 1.2 billion people has sparked a funding-and-expansion arms race.

Flipkart, a Bangalore-based company founded in 2007 by two former Amazon employees, last month announced it had raised $1 billion in mostly foreign capital after building its registered users to 22 million.

A day later, Amazon raised the stakes with founder Jeff Bezos saying the company would pour $2 billion into developing its India business.

Snapdeal.com, another Indian e-commerce contender, has raised at least $234 million in the past year, and recently local media have reported that Rajan Tata of India’s Tata Group conglomerate is considering a personal investment in the company.

via Online sites shake up hidebound retailing in India – Businessweek.

08/07/2014

Chinese ‘customers’ at IKEA?

Do have alook at these actual photos: https://www.google.co.uk/search?q=chinese+asleep+IKEA,+2014&tbm=isch&tbo=u&source=univ&sa=X&ei=E-67U4HSDoHX7AadmYGQCg&ved=0CB8QsAQ&biw=1360&bih=850

Ikea Shenzhen China

Ikea Shenzhen China (Photo credit: dcmaster)

And from: http://www.scmp.com/news/china/article/1300942/ikea-last-cracks-china-market-success-has-meant-adapting-local-ways?page=all

“On a recent Saturday afternoon, Ikea‘s flagship mainland store – one of the world’s largest – is abuzz with people. Walkways guiding visitors from one showroom to the next feel more congested than the road outside, and almost all 660 seats in the canteen are occupied. Yet the lines to the cashiers are refreshingly short – most are not here to shop.

The store is gripped by a kind of anarchy that would rarely be seen, or tolerated, in its country of origin. There are picnickers everywhere – their tea flasks and plastic bags of snacks lining the showroom tables. Young lovers pose for “selfies” in mock-up apartments they do not live in. Toddlers in split pants play on model furniture with their naked parts coming in contact with all surfaces.

On a king-size bed in the middle of the largest showroom, a little boy wakes from a nap next to his (also sleeping) grandmother. When the old woman casually helps the boy urinate into an empty water bottle, dripping liquid liberally on the grey mattress under his feet, most passers-by seem not to mind or even notice. The exception is a young woman who elbows her disinterested boyfriend: “Look, he’s peeing into a bottle!”

Most endemic, however, is the sleeping. After a few, rare clear days, the city’s notorious heavy smog has returned, and is made worse by a sticky, dusty heat wave striking northern China. Weeks earlier, a photo of people napping in a Shanghai shopping centre to escape the searing heat went viral, but in the capital, it is Ikea’s cool, conditioned air that is salvation for tens of thousands of its inhabitants.

The bedroom and living room sections on the store’s third floor are the most popular. Virtually every surface is occupied by visitors appearing very much at home. Older people read newspapers or drink tea; younger visitors cuddle or play with their phones. Most, however, are sound asleep.”

 

14/06/2014

First there was fake Apple stores in China now fake Ikea shop found in Kunming | Mail Online

It seems that Kunming in the southwest corner of China is the world capital of knock-off shops.

Seem familiar? Employees push a shopping cart past the information desk at the lobby of the 11 Furniture Store

Apple recently found five counterfeit versions of its stores there after blogger BirdAbroad posted photos of one online – and now a fake Ikea has surfaced.

It’s called 11 Furniture and is a 10,000 square metre, four-storey replica that’s virtually identical to the Swedish-made version.

It copies Ikea’s blue-and-yellow colour scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea’s Swedish meatballs and salmon.

This knock-off Ikea store is emblematic of a new wave of piracy sweeping through China. Increasingly sophisticated counterfeiters no longer just pump out fake luxury handbags, DVDs and sports shoes but replicate the look, feel and service of successful Western retail concepts — in essence, pirating the entire brand experience.

‘This is a new phenomenon,’ said Adam Xu, retail analyst with Booz&Co. ‘Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats.’

 

via First there was fake Apple stores in China now fake Ikea shop found in Kunming | Mail Online.

05/05/2013

* ‘Speed money’ puts the brakes on India’s retail growth

Reuters: “Hong-Kong entrepreneur Ramesh Tainwala spent 18 months operating branded clothing retail stores in India before deciding it was impossible to succeed without paying bribes.

Customers exit a V-Mart retail store in New Delhi April 6, 2013. Picture taken April 6, 2013. REUTERS-Adnan Abidi

Tainwala, a 55-year-old expatriate Indian, owns Planet Retail, which held the India franchise rights for U.S. fashion labels Guess and Nautica as well as UK retailers Next and Debenhams. He sold the brands last September to various Indian businesses.

“Right now it’s not possible to do business in India without greasing palms, without paying bribes,” said Tainwala, who is also luggage maker Samsonite’s president for Asia Pacific and West Asia. Tainwala said he himself refused to pay bribes to licensing officials, though that could not be independently confirmed.

India is the next great frontier for global retailers, a $500 billion market growing at 20 percent a year. For now, small shops dominate the sector. Giants from Wal-Mart Stores Inc to IKEA AB have struggled merely for the right to enter, which they finally won last year.

But a daunting array of permits – more than 40 are required for a typical supermarket selling a range of products – force retailers to pay so-called “speed money” through middlemen or local partners to set up shop.

In interviews with middlemen and several retailers, Reuters found the official cost for key licenses is typically accompanied by significant expenses in the form of bribes. The added cost erodes profitability in an industry where margins tend to be razor-thin. It also creates risk for companies by making them complicit in activity that, while commonplace in India and other emerging markets, is nonetheless illegal.

That creates a handicap for foreign operators such as U.S.-based Wal-Mart, the world’s biggest retailer, and Britain’s Tesco Plc and Marks and Spencer Plc, which must comply with anti-bribery laws in their home countries even while operating abroad.

A Wal-Mart spokesperson said the company is strengthening its compliance programs, part of a global compliance review that has cost more than $35 million over the last 18 months. IKEA, which is awaiting final approval to enter India, has started assessing the market, a spokeswoman said, adding the group has “zero tolerance” for corruption in any form.”

via Insight: ‘Speed money’ puts the brakes on India’s retail growth | Reuters.

27/02/2013

* IKEA Meatball Scandal in China: It’s Not What You Think

WSJ: “At the risk of beating a dead horse, China Real Time feels compelled to update readers on the latest flare-up in the global meat contamination scandal from the Chinese point of view.

According to a report in the state-run China Daily on Wednesday, the Swedish meatballs that furniture retailer IKEA sells in China have stirred controversy– not because they were found to contain equine DNA like some of the company’s meatballs in Europe, but because it turns out they’re made in China.

Agence France-Presse/Getty Images

This picture taken on Feb. 25, 2013 shows meatballs at IKEA department store in Brno, the Czech Republic.

“I thought the meatballs were imported from Sweden,” the China Daily quoted Jiang Tong, an IT worker in Beijing, as saying. “I don’t think I will order such meatballs in the future.”

IKEA’s spokeswoman did not respond to requests for comment. China Daily said the meatballs at IKEA’s China outlets do not contain horsemeat, as the company gets its meatballs, made with beef and pork, from a manufacturer based in China’s coastal Fujian province.

News of horsemeat turning up in beef products sourced in Europe has spread across the globe in recent weeks, hurting the reputations of some of Europe’s biggest food producers. The Wall Street Journal reported on Monday that IKEA has removed meatballs from many of its cafeterias after traces of horsemeat were found in a batch in the Czech Republic.”

via IKEA Meatball Scandal in China: It’s Not What You Think – China Real Time Report – WSJ.

21/01/2013

* India Agency Clears IKEA’s Investment Proposal

Another step forward in liberalisation.

WSJ: “India’s foreign investment promotion agency has cleared Swedish furniture giant IKEA Group’s proposal to invest nearly $2.0 billion for setting up wholly owned retail stores in the country, Economic Affairs Secretary Arvind Mayaram said Monday.

Mr. Mayaram is also the head of the Foreign investment Promotion Board, the agency which clears foreign direct investments in India.

A spokeswoman for IKEA didn’t immediately comment.

The board had cleared the retail giant’s proposal in November subject to certain conditions. However, IKEA wasn’t happy with the conditions, which prevented it from selling products that it doesn’t brand, including secondhand furniture, textile goods, toys, books and consumer electronics as well as food and beverage items in cafeterias within its stores.

It thereafter wrote to the Indian government, seeking the removal of these conditions.

“Now, the proposal has been cleared in its entirety,” said another official, who didn’t want to be named.

IKEA now needs the approval of the federal cabinet to set up its outlets in India.”

via India Agency Clears IKEA’s Investment Proposal – WSJ.com.

24/11/2012

* No meatballs’ as IKEA hits hurdles in India

India cannot make up its mind, it seems, whether to welcome foreign retailers or not.

Hindustan Times: “Swedish retailer IKEA said Friday it was reviewing sweeping curbs imposed on what it can sell at its planned new stores in India that will reportedly prevent it offering its famed meatballs. India’s foreign investment panel has rejected 15 of IKEA’s 30 product lines, a report said on

Friday, underscoring the regulatory hurdles faced by foreign stores who are eyeing the Indian market with renewed interest.

“We are now internally reviewing the details (of the investment board’s decision),” an IKEA spokeswoman told AFP, adding that she could not confirm the curbs as reported by The Economic Times on Friday.

Among the lines IKEA has been told by the Foreign Investment Promotion Board that it cannot sell are gift items, fabrics, books, toys, consumer electronics and food, the newspaper reported.

The group will, however, be allowed to sell furniture — its core business.

The investment panel also reportedly told IKEA it cannot offer customer financing schemes because that would violate banking regulations, or open cafes and food markets because that would break food policy regulations.

IKEA’s entry into India — it has pledged to invest $1.9 billion in the coming years — is being closely watched by competitors as a test case for how a large foreign corporation negotiates India’s byzantine rules and red tape.

India’s government announced a string of pro-market and investor-friendly reforms in September that relaxed or removed barriers preventing foreign retailers from operating in the country.

IKEA hopes to open 25 of its trademark blue-and-yellow stores in India through a 100-percent owned unit, Ingka Holding, as part of a wider push into emerging markets like China and Russia.

The government initially insisted that IKEA obtain 30 percent of its supplies from small Indian manufacturers that the Swedish retailer feared would not be able to keep pace with demand.

Later the government dropped the demand specifying the size of the supplier, but kept the 30 percent local sourcing requirement.”

via No meatballs’ as IKEA hits hurdles in India – Hindustan Times.

24/06/2012

* Ikea Applies for Big Indian Investment

WSJ: “Swedish housewares giant IKEA Group asked India for permission to invest €1.5 billion ($1.9 billion) in the country to set up 25 retail stores in coming years, a commitment that provides some relief for New Delhi policy makers who have been trying to boost sagging foreign-investor sentiment.

IKEA’s foray into India, made possible by a policy change last year that allowed some retailers to own 100% of their Indian units, could help transform India’s largely unorganized, $500 billion retail sector. But the company will face significant challenges, including meeting the government’s mandate that it source 30% of inventory from local small-scale industries.

IKEA, which has 290 stores in 26 countries and is known for selling affordable, modern-looking furniture and housewares, said that if the Indian government approves its application it could have a significant effect on the country’s retail sector, “vastly improving availability of high-quality, low-price products not available in India.”

The company announced its decision after its chief executive, Mikael Ohlsson, met with Indian Commerce Minister Anand Sharma on Friday at a conference in St. Petersburg, Russia.”

via Ikea Applies for Big Indian Investment – WSJ.com.

See also: Consumerism grows in India

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India