IKEA goes for cheaper sleep

INTERNATIONAL retail giant IKEA said yesterday it will cut the prices of its bedroom products in China by 50 million yuan (US$6.7 million) starting next month to spur sales.

The discounts on products such as mattresses and quilt covers will make IKEA's offerings more affordable for Chinese consumers, said Ian Duffy, president of IKEA Asia Pacific.

A promotion called "Sleeping Revolution" will run from September to August next year.

Other textile products including carpets and curtains will also be priced more favorably.

Along with the price incentives, the Swedish retailer also plans to open three new stores next year, in Shenzhen, Nanjing and Dalian.

The company now operates four stores, in Shanghai, Beijing, Guangzhou and Chengdu, after coming to China in 1998. IKEA will also open a second store in Shanghai in 2009 and boost its total outlet number to 10 in China by 2010.

"We have redefined our business model (in the past few years) and meanwhile put enormous energy into the sourcing and suppliers of products in order to achieve lower prices," said Duffy in explaining the company's slow start in China.

"Long-term success is much more important."

The company earlier suffered from a limited store network and undeveloped logistics support. IKEA's specially designed products were priced comparatively higher than competitors, and rivals such as B&Q took a bigger share of China's home furniture market.