A Wedding in Aisle 3? Why Ikea Encourages Chinese to Make Its Stores Their Own
Visit an Ikea in China and you'll see people getting comfortable -- very comfortable. They're dozing on Malm beds and curling up on Karlstad sofas. It's as if they're trying on a new life: one that comes with European-style furniture.
In Western countries, couples in Ikea stores might be spotted bickering over what bookshelf to buy, but in China the cheery, modern showrooms spark dreams of domestic bliss. One Chinese Ikea even hosted a trio of weddings.
The Swedish retailer, in fact, elicits surprising reactions here. Ikea is proof that in China luxury labels aren't the only aspirational brands, said Camilla Hammar, Ikea China's marketing director.
"If you compare [Chinese consumers] with Europeans, people here still believe that tomorrow is going to be better than today," she said. For Ikea, the question then is: "How do you tap into that and make an emotional connection to your brand?"
The company had a slow start at first after entering the market 15 years ago. But it lowered prices by about half since 2000 with more local sourcing. It also learned what didn't work: Chinese-inspired designs, for example. Consumers wanted Ikea's modern European look.
Now Ikea has 14 stores in China and plans to add three a year until 2020.
Ikea China says sales were up 17% year over year to $1 billion in the year ending in August 2013. Meanwhile, competitors have struggled: Home Depot closed all its Chinese big-box stores last year.
Before joining Ikea in 2006, Swedish-born Ms. Hammar was the marketing director at Shanghai Tang in Hong Kong. Ad Age caught up with her in Shanghai to ask about in-store nuptials and customer catnaps. The interview has been lightly edited.
Ad Age: When you walk into an Ikea in China, you see people dozing on the beds. People take their kids there to play with the toys. What do you do about it?
Camilla Hammar: It's one of our strengths -- that people actually come closer to the [product] range and try it. So we actually welcome that.
Ad Age: What's the craziest thing you've heard of?
Ms. Hammar: People literally getting into the beds, taking off their shoes, getting under the covers. Not just one person, but sometimes as a couple or with a child.
Ad Age: Sounds like they get pretty personal with your products. How do you tap into that with your marketing?
Ms. Hammar: We've realized the store experience in China is very different [than in other markets]. It tends to initiate very romantic feelings. The first time some couples start talking about getting married is in our showrooms. So that's something we've tapped into.
We have had weddings in our store in Nanjing. We did that as a PR event. It was a wedding with three couples, and we set it all up in a Swedish style. I was there as one of the witnesses. My daughter, who is blonde with curly hair, was the flower girl. We served Swedish food.
Ad Age: The Chinese are into expressing themselves through fashion and dress, but it seems that self-expression hasn't yet become as important in home design, maybe because people's homes are not a place for entertaining. Is that what you find?
Ms. Hammar: We do see a new behavior among younger consumers -- they are, in fact, very happy to entertain at home.
Ad Age: What is the media's role? For example, is there a strong shelter-magazine category in China?
Ms. Hammar: Those types of magazines … will show apartments from Italy. They will show apartments from New York. There's very little content being developed in China. There hasn't yet been much self-expression in the home. I would say there's very little self-confidence when it comes to decorating your own space.
Ad Age: What are China's advertising challenges?
Ms. Hammar: There are 3,000 TV channels in China, which makes traditional media very, very difficult to work with. It doesn't matter if you're a foreign company or if you're a Chinese brand … there's too much fragmentation in the market and very few partners who can tell you how it works, which makes return-on-investment discussions very difficult. We do a lot of testing and trying.
Ad Age: Do the Chinese like Swedish meatballs?
Ms. Hammar: They love them.