The Swedish retailer, in fact, elicits surprising reactions here. Ikea is proof that in China luxury labels aren't the only aspirational brands, said Camilla Hammar, Ikea China's marketing director. "If you compare [Chinese consumers] with Europeans, people here still believe that tomorrow is going to be better than today," she said. For Ikea, the question then is: "How do you tap into that and make an emotional connection to your brand?"
The company had a slow start at first after entering the market 15 years ago. But it lowered prices by about half since 2000 with more local sourcing. It also learned what didn't work: Chinese-inspired designs, for example. Consumers wanted Ikea's modern European look.
Now Ikea has 14 stores in China and plans to add three a year until 2020.
Ikea China says sales were up 17% year over year to $1 billion in the year ending in August 2013. Meanwhile, competitors have struggled: Home Depot closed all its Chinese big-box stores last year.
|Camilla Hammar, marketing director, Ikea China|
Ad Age: When you walk into an Ikea in China, you see people dozing on the beds. People take their kids there to play with the toys. What do you do about it?
Camilla Hammar: It's one of our strengths -- that people actually come closer to the [product] range and try it. So we actually welcome that.
Ad Age: What's the craziest thing you've heard of?
Ms. Hammar: People literally getting into the beds, taking off their shoes, getting under the covers. Not just one person, but sometimes as a couple or with a child.
Ad Age: Sounds like they get pretty personal with your products. How do you tap into that with your marketing?
Ms. Hammar: We've realized the store experience in China is very different [than in other markets]. It tends to initiate very romantic feelings. The first time some couples start talking about getting married is in our showrooms. So that's something we've tapped into.
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