Ikea to launch e-com­merce busi­ness model in Shang­hai

China Daily (Canada) - - LIFE - By ZHU WENQIAN and WANG ZHUOQIOING

Swedish home fur­nish­ings re­tailer Ikea Group will launch its e-com­merce busi­ness in Shang­hai and start to sell its prod­ucts on­line by the end of Au­gust.

This is the com­pany’s first on­line sales at­tempt in the Asia-Pa­cific re­gion.

As a pilot pro­gram, the de­liv­ery ser­vices will be lim­ited to Shang­hai for the mo­ment. All of its ready-to-as­sem­ble fur­ni­ture, ap­pli­ances and home ac­ces­sories, ex­cept for food and green plants, will be sold on­line. Ikea plans to ex­pand its e-com­merce ser­vices across the coun­try if the trial run is suc­cess­ful.

The com­pany said that a few years ago it started to de­velop an e-com­merce busi­ness model in Europe, es­pe­cially north­ern Europe and the United King­dom. China will be the first coun­try where it tries out e-com­merce op­er­a­tions in the Asia-Pa­cific re­gion, as part of its mul­ti­chan­nel re­tail­ing strat­egy.

Lu Zhen­wang, an in­ter­net ex­pert and chief ex­ec­u­tive of Wan­qing Con­sul­tancy in Shang­hai, said: “The phys­i­cal stores of Ikea are very big and re­quire large ar­eas. The stores in first- and sec­ond-tier cities are nearly sat­u­rated.

“There aren’t any Ikea phys­i­cal stores in third- and fourthtier cities though the de­mand is emerg­ing, so it’s es­sen­tial for Ikea to launch e-com­merce ser­vices and to serve those places eas­ily in the fu­ture. It would be con­ve­nient to set up some pickup and or­der points in smaller cities.”

In May, the fur­ni­ture re­tailer es­tab­lished a pickup and or­der point in­Wen­zhou, Zhe­jiang prov­ince. The stores in Ningbo, a nearby city, will pro­vide goods for that ser­vice.

“This busi­ness model, with small in­vest­ments, is suit­able for smaller cities, where they don’t have phys­i­cal stores. Ikea will launch more such pickup and or­der points in China,” the com­pany said.

In its 2016 fi­nan­cial year, Ikea achieved sales rev­enue of 11.7 bil­lion yuan ($1.76 bil­lion) in­China, jump­ing 19.4 per­cent year-on-year. Dur­ing the year, about 83 mil­lion cus­tomers vis­ited Ikea stores, up 20 per­cent over the pre­vi­ous year. Also, Ikea web­sites had more than 67 mil­lion in­di­vid­ual vis­its, an in­crease of 25 per­cent year-on-year.

Ikea has opened three new stores in China this year in Chengdu, Suzhou, Jiangsu prov­ince, and Foshan, Guang­dong prov­ince. The re­tail gi­ant said it will keep to its plan of open­ing three new stores in China ev­ery year.

Con­tact the writ­ers at zhuwen­qian@ chi­nadaily.com.cn and wangzhuo­qiong@ chi­nadaily.com.cn

Baidu Inc has added fuel to Chi­naits ef­fort has to tak­en­put driver­less an­other ma­jor­cars into step mass to­ward pro­duc­tion open­ing its within fi­nan­cial­five years mar­kets with af­ter­its approving mul­ti­mil­lion a pro­gram­dol­lar in­vest­ment that will al­lowon Tues­day in­vestors in ina ma­jor Hong KongUS pro­duc­erto trade of eq­ui­ties­l­i­dar sen­sors,on the Shen­zhena key tech­nol­o­gyS­tock Ex­change,that helps an­a­lyst­s­the cars “see”said on their Wed­nes­day. sur­round­ing By en­vi­ron­ment­fur­ther open­ingby us­ing its $6.6 light to tril­lion mea­sure do­mes­tic dis­tance. share mar­ket Cal­i­for­nia-basedto for­eign Velo­dyne traders, they Li­DAR said Inc, China which was pro­vides ad­dress­ing sen­sor lim­i­ta­tions tech­nol­o­gyto main­landthat can trad­inghelp flagged driver­lessby the glob­al­cars, in­dex an­nounced com­piler that MSCIit had when­com­pleted it re­jecteda com­binedthe stocks $150in June.mil­lion “The in­vest­ment Shen­zhen- from HongFord Kong Mo­tor StockCo and Con­nec­tBaidu. should move Bei­jing-basedChina fur­ther Baidu along did the road­not dis­clos­eto MSCI the in­clu­sion­size of an­dits we in­vest­ment.see this But an­nounce­men­tFord, which as an­nounceda sig­nif­i­can­ton Tues­day cat­a­lyst forits Chi­ne­se­plan to pro­duce mar­kets, fully par­tic­u­larlyau­tonomous at a time ve­hi­cles where for fun­da­men­tal­ride-hail­ing strength­ser­vices by and 2021, in­dus­tri­al­said it prof­itabil­i­ty­in­vested $75 mil­lionare build­ing,”in the said li­dar Dou­glassen­sor com­pany. Mor­ton, head of Velo­dyne,re­search at North­ern­which Trust­was Cap­i­tal founded Mar­ketsin 1983, Asia. said in a state­ment“I am sure that the the stock in­vest­ment con­nect is will an help im­por­tant­the com­pany com­po­nent ex­pandof MSCI,” pro­duc­tion­said Charlesand Li, make chief sen­sors ex­ec­u­tive more of­fi­cer af­ford­able of Hong for the Kong mass Ex­changes de­ploy­ment & Clearingof fully au­tonomousLtd. ve­hi­cles.

“Now“We want it’s the ac­tu­al­ly­cost to hap­pened,be low enoughso that’sto be amongused for manyall thingscars. We that en­vi­sion in­cre­men­tallya safer will make world the for A-sharethe mil­lions mar­ketof more and more ac­ces­si­ble to in­ter­na­tional in­vestors.”

The long-an­tic­i­pated Shen­zhen-Hong Kong Stock Con­nect, which al­lows main­land in­vestors to buy Hong Kong stocks and vice versa, had been ex­pected for more than a year fol­low­ing a sim­i­lar pro­gram be­tween Shang­hai and Hong Kong in 2014.

The China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion on Tues­day night also lifted re­stric­tions on as­set flows, say­ing it wouldn’t im­pose an ag­gre­gate quota for the Shen­zhen link, and that it would

Bloomberg con­trib­uted to this story.

SHE JI / FOR CHINA DAILY

An out­let of Ikea Group in Wuhan, cap­i­tal of Hubei prov­ince.

AFP

Ford CEO Mark Fields shows off the new Velo­dyne Puck sen­sor at a news con­fer­ence on CES Press Day in Las Ve­gas, Ne­vada.

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