Core Insights - IKEA's long-term strategy in the Chinese market focuses on "low prices" to address the shrinking demand in the home furnishing sector and intense competition [2][6] - The company plans to launch over 1,600 new furniture and home products, 23 new product series, and more than 150 low-priced items by the fiscal year 2026 [2][3] - IKEA aims to expand its small store format and digital business in China, with Beijing and Shenzhen identified as key markets for this initiative [2][4] Pricing Strategy - Since 2020, IKEA has invested a total of 673 million yuan in introducing lower-priced products, with plans to continue this trend in the upcoming fiscal years [3][6] - For the fiscal year 2024, IKEA has implemented price reductions on over 500 products, investing more than 400 million yuan, while for 2025, the investment is set at 273 million yuan, focusing on sleep-related products [3][6] - The sales volume of low-priced products increased by 70% in the fiscal year 2024, indicating the effectiveness of the pricing strategy [6][7] Small Store Expansion - IKEA has been exploring smaller store formats since 2020, with the first small store opening in Shanghai, aiming to reach urban consumers more effectively [4][5] - The company has opened 40 customer touchpoints in mainland China, including 37 stores and 10 shopping centers, and plans to continue expanding its small store presence [4][5] - Other home furnishing companies are also adopting similar small store strategies to reduce costs and penetrate lower-tier markets [8][9] Digital and Online Strategy - IKEA is enhancing its digital experience, launching an AI-based digital design platform in the Chinese market for the fiscal year 2025 [10] - The company has also entered into partnerships with third-party platforms, such as launching an online store on JD.com, to strengthen its online presence [10] Market Outlook - The Chinese home furnishing market is expected to show strong growth, with projected sales exceeding 5.3 trillion yuan by 2027, driven by demand from the stock housing market and innovations in smart home products [10]