Ikea pledged to keep prices lower at its China stores, as the world’s largest furniture retailer courts thriftier buyers and seeks to fend off competition from local rivals, reports Bloomberg. The Swedish company will commit €20 million ($23.4 million) in the fiscal year starting Sept. 1 to efforts to slash prices further in the market, according to Tolga Oncu, chief operations officer of Ingka Group, Ikea’s largest franchisee.
“We are continuing to invest in lowering the prices in China compared with other countries,” Oncu said in an interview with Bloomberg News in Shanghai on Tuesday. “It’s too early to say if we are lowering prices more in China or less, but I know that China is one of those countries we are investing the most.”
Ikea faces challenges in China as weak consumer spending, a cooling property market, and slowing economic growth sap demand for big-ticket home goods. Consumers are also spoilt for choice, with e-commerce sites flooded by low-cost sofas, cabinets, and storage units that mimic Ikea’s designs but sell for less—undercutting its edge in affordable furniture.