Home furnishing giant IKEA has seen sales growth soften for three consecutive years in China as the country grapples with a slowing economy and waning consumer confidence caused by a grinding trade conflict with the US.
Still, the Swedish retailer is pressing ahead with 10 billion yuan (US$1.4 billion) of investment in the next 12 months and opening four more stores in China by August next year, IKEA China president Anna Pawlak-Kuliga told a media briefing in Beijing.
“We have strong confidence in the China market,” she said. “It’s one of the most dynamic markets with the most potential.”
Global retailers, long used to counting on the rising Chinese middle class for explosive growth, are dealing with unprecedented uncertainty in the world’s second-largest economy.
The next round of a tit-for-tat trade war with the US would likely drag economic growth below 6 percent, while a weakening yuan has weighed down consumer sentiment.
However, brands from Starbucks Corp to Ferrero Rocher are continuing to expand in China, banking on the long-term potential of the world’s biggest pool of consumers.
IKEA, whose global sales touched 38.8 billion euros (US$43 billion) last year, sees Chinese consumers aspiring to premium consumer goods, including home furnishings, Pawlak-Kuliga said.
The company said it would adjust its business operations in China to suit the local context, such as launching sales on local e-commerce platforms and piloting a program on WeChat for consumers to order its beloved meatballs.
It is also bringing a new concept of mini-IKEA stores to Shanghai next year.
These “planning studios,” meant to cater to urbanites who do not want to travel outside the city center to go to IKEA’s larger stores, have already been launched in London and New York City.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is