IKEA's Global Success: Mastering the Art of Localization
IKEA, the world’s leading furniture brand, has achieved global dominance, thanks in part to its savvy localization strategies. Founded by Ingvar Kamprad in 1943, IKEA began as a small-scale mail-order business in Sweden and rapidly expanded internationally. The first store opened in 1958 in Sweden, followed by other Scandinavian countries in the 1960s. By the 1970s and 1980s, IKEA embarked on an aggressive international expansion, opening stores in Japan, Australia, Canada, Hong Kong, the U.S., France, Spain, Italy, and the U.K.
IKEA’s success is attributed to a mix of standardization and localization. While maintaining a consistent brand image and store layout globally, IKEA pays close attention to local trends, cultures, and customer preferences. This approach involves extensive research, including home visits and interviews with thousands of people in each new market.
Related Asia business insights and blogs that you may also like:
Uniqlo: The Symphony of Innovation, Quality, and Customer Focus
Conquering the Chinese Market
IKEA entered China in 1998, adapting to local preferences by partnering with Chinese firms for furniture assembly services, changing store locations to be more accessible, and incorporating regional differences in its product range. IKEA China has cut prices to cater to the young middle-class population and changed store policies to allow customers to sleep in showroom beds, turning controversial customer behavior into business opportunities. Today, IKEA is a major anchor point for manufacturing in China, with suppliers manufacturing over 22% of IKEA’s entire product range.
IKEA's Strategy in India
IKEA delayed its entry into India due to regulatory restrictions and market risks. However, in 2018, IKEA invested $150 million in opening its first store in Hyderabad, India, adapting its products and pricing strategy to suit the local market. This included replacing pork meatballs with chicken and vegetarian meals in the cafeteria and offering a range of affordable products. IKEA conducted over a thousand home surveys in India to understand local needs, leading to product adjustments like extendable beds for children.
Japan: Learning from Past Mistakes
IKEA first entered Japan in 1974 but withdrew in 1986 due to cultural misunderstandings and unsuitable product sizes. However, IKEA returned in 2006 with a revised strategy, incorporating market-specific adjustments, enhanced customer experiences, and localized showrooms. IKEA's Tokyo store, for example, features small rooms furnished to resemble typical Japanese homes, displaying local cooking appliances and tatami flooring.
Japan: Embracing Local Cultural in Store Openings
In Japan, IKEA's approach is finely tuned to local culture and consumer behavior. After learning from its initial failure in the 1970s, IKEA returned with a business model that resonates with Japanese preferences. This includes offering services like home delivery and assembly, showcasing products suited to smaller living spaces, and creating showrooms that reflect the typical Japanese home. IKEA also focuses on customer experience and cultural integration, which is evident in their latest store promotions.
For the grand opening of the new store in Maebashi, Gunma Prefecture, IKEA Japan has undertaken a unique promotional campaign. They collaborated with Keiichi Arawi, the creator of the popular manga "Nichijou" and a native of Gunma Prefecture, to design promotional imagery. This campaign is a clever nod to local culture and art, celebrating Arawi's work and its roots in Gunma. The promotional images are featured not only on IKEA's website and in the media but also on billboards outside the physical store. This localized approach is not just a celebration of a new store opening; it's a tribute to the local culture and a nod to the fans of "Nichijou" in Gunma, enhancing the connection between the brand and the local community.
IKEA's strategy in Japan exemplifies the importance of cultural sensitivity and local engagement in international business. By blending its global brand with local preferences and cultural icons, IKEA Japan can create a unique and appealing shopping experience that resonates with its customers.
IKEA's Marketing and Digital Strategy
IKEA’s marketing strategy, particularly in China, emphasizes “glocalisation,” reflecting local cultural, social, economic, and linguistic factors. IKEA’s advertisements in China connect common hobbies and lifestyles to their furniture, illustrating their understanding of the local market. In terms of digital presence, IKEA has effectively utilized online shopping services, social media, and micro-blogging for marketing campaigns, adapting to the fast-paced digital environment.
IKEA’s journey from a small-scale business to a global furniture powerhouse showcases the importance of localization in international business. By adapting to local cultures, consumer preferences, and market conditions, IKEA has successfully established itself in diverse markets across the globe, demonstrating the power of strategic localization in global business expansion.
With over 50 years of experience combined with our team at ToAsia.biz, we are ready to provide business consultation services to lead your business into the Asia Pacific region - profitably. Come talk to us now and see how our playbook is different from other consulting firms out there where our focus is to help you expand at the right pace, staying lean and profitable.
River Chan is the marketing director of ToAsia.biz with over 10 years of experience in marketing from strategic planning, project execution, and data analysis across different industries.