IKEA to close 7 large stores, open small ones

For young urbanites who enjoy a leisurely shopping experience and live in compact apartments, a trip to IKEA can feel overwhelming. It often means traveling to the suburbs, navigating a labyrinthine “giant blue box” of over 30,000 square meters with an oversized cart, and dedicating an entire day — often punctuated by a meal in its popular canteen.

A screenshot of IKEA's official statement.

Responding to shifting consumer habits and demographic trends in China, IKEA is closing seven of its large-format stores, including locations in suburban Shanghai, Harbin, Tianjin, and Guangzhou. These stores will cease operations on Feb. 2.

Designed for destination shopping and bulk purchases, this format has become harder to sustain. Fewer households are moving into new homes, spending on major renovations has slowed, and foot traffic has declined at outlets reliant on substantial one-time purchases. Meanwhile, local online furniture brands — with their lower prices, faster delivery, and agile, asset-light models — have captured growing market share.

A cartoon image generated by Doubao AI.

While scaling back large stores, IKEA is expanding its footprint with smaller, more accessible formats. Over the next two years, it plans to open about a dozen compact stores in cities like Beijing and Shenzhen, with new locations soon launching in Dongguan (Shenzhen’s neighbor city) and Beijing’s Tongzhou District.

These stores are situated closer to residential areas and transit hubs, targeting customers in smaller homes who prefer frequent, convenient shopping. Instead of vast on-site inventory, they offer curated selections, design consultations, and digital ordering — reducing operating costs compared to the warehouse model.

To test the waters for this model, IKEA opened its first Chinese mainland Plan and Order Point (PaOP) in Luohu District, Shenzhen on May 26, 2024. Here, specialists help customers design kitchens, bedrooms, and living rooms — maximizing small spaces — with all items delivered to their door. The location also features showrooms for compact living, corporate services, and Swedish food offerings.

Following the closing of the seven, IKEA will maintain 34 physical stores across China, supported by two flagship e-commerce stores and additional digital channels, collectively reaching over a billion consumers. Online sales and fulfillment are now central to its strategy in China. A partnership with JD.com provides instant delivery in seven cities, meeting the local expectation for same-day or rapid shipping.

Although China remains one of IKEA’s top 10 global markets, its contribution to total sales has declined in recent years.