IKEA Shrinks Footprint in China, Shifts to Targeted Growth

IKEA, the global furniture retail giant, announced on Wednesday the closure of seven stores across China, effective February 2nd. The closures impact locations in major cities like Shanghai and Guangzhou, as well as several second-tier cities including Nantong, Xuzhou, and Harbin, as detailed in a statement released on their official WeChat account.

This decision reflects a broader struggle for retailers operating within the Chinese market. Consumer spending remains subdued due to ongoing economic challenges, including a prolonged property crisis and anxieties surrounding employment security and wage stagnation. These factors have collectively dampened consumer sentiment and impacted sales growth for many businesses.

Despite the closures, IKEA maintains a significant presence in mainland China with approximately 40 stores currently operating. The company has simultaneously been investing in expansion through different channels, recently opening five new stores of varying sizes. This indicates a strategic shift rather than a complete retreat from the Chinese market.

China currently contributes around 3.5% to IKEA’s total global sales. Recognizing the growing importance of online commerce, IKEA has been actively bolstering its digital footprint. Last August, the company launched a new flagship store on JD.com, a leading Chinese e-commerce platform, to capitalize on and further drive online sales growth.

Looking ahead, IKEA outlined a revised strategy focused on “precise cultivation” rather than rapid expansion. The company intends to concentrate its efforts on key markets like Beijing and Shenzhen, and plans to open over 10 smaller-format stores within the next two years. New store openings are also anticipated in Dongguan and Beijing during the first half of 2026, signaling a continued commitment to the Chinese market, albeit with a modified approach.