IKEA Trapped in Its Own Discounts: Searching for a New Way Forward

During China’s Golden Week, IKEA Shenzhen was packed to the brim — carts jammed the aisles, restaurants overflowed, and even the restroom doors were plastered with discount posters.
It’s clear: IKEA is going all-in on price cuts to win back Chinese consumers.

1. A Price War That Reaches Every Corner

This holiday season, every retailer is fighting for shoppers’ attention — and IKEA is no exception.
From the escalator to the restroom, discount tags were everywhere.
Plates for 3 RMB, bowls for 5 — even the men’s restroom doors carried sale posters.
For a global furniture giant known for clean Scandinavian aesthetics, this level of “sales hustle” is rare indeed.

The strategy is obvious: trade margin for volume, boost sales, and stay relevant in a price-sensitive market.

2. The Low-Price Strategy: Winning Back the Middle Class and Millennials

Having operated in China for nearly 30 years, IKEA was once the go-to brand for modern middle-class homes and young urbanites.
But as economic realities and spending habits shifted, IKEA’s premium image began to fade.
In response, since 2023, IKEA China has gone on a price-slashing spree — over 550 discounted items in FY2024, 500 more in FY2025, and another 150 planned for FY2026 with a 160-million-yuan investment.
The message is clear: IKEA wants to prove that good design can still be affordable.

3. The Double-Edged Sword of Discounts

Price cuts bring crowds, but not necessarily profits.
Despite opening four new stores, IKEA China’s FY2024 revenue fell from €1.58 billion to €1.46 billion.
The numbers suggest that the “discount-for-volume” strategy may boost traffic, but not sustainable growth.

4. Beyond Discounts: IKEA’s Next Moves

IKEA knows it can’t rely on low prices forever. To break out of its “discount trap,” it’s exploring new directions:

1. Expanding Small-Format Stores — bringing IKEA closer to urban consumers;
2. Penetrating Tier-2 Cities — targeting economically strong cities like Dongguan and Foshan;
3. Deepening Localization — designing products that fit Chinese households better in both function and durability.

IKEA’s brand remains powerful — but to stay relevant, it must evolve beyond discounts and rediscover what made it iconic: design, experience, and trust.