In 2004, for instance, its China revenue jumped 40 per cent from the year before.
But there was a problem - its local stores were not profitable.
While globally 30 per cent of IKEA's range comes from China, about 65 per cent of the volume sales in the country come from local sourcing.
These local factories resolved the problem of high import taxes in China.
: IKEA is known globally for its low prices and innovatively designed furniture. Its low-price strategy created confusion among aspirational Chinese consumers while local competitors copied its designs.
This case study analyses how IKEA adapted its strategies to expand and become profitable in China.
The company initially tried to replicate its existing business model and products in the US.
But it had to customize its products based on local needs.
IKEA identified the strategic challenges and made attempts to overcome them.
One of the main problems for IKEA was that its prices, considered low in Europe and North America, were higher than the average in China.