Swedish furniture giant IKEA is accelerating its China expansion with a decisive shift toward compact, urban store formats, as it adapts to changing consumer behaviour and a more challenging retail environment in the country.
The company, through its largest franchisee Ingka Group, has opened a new small-format store in eastern Beijing, marking a clear move away from its traditional large, out-of-town “big box” outlets. The 1,500 sq m store, located in the Wangfujing WellTown shopping centre in Tongzhou District, offers more than 3,000 products and tailored home solutions designed for urban living.
The Beijing opening is the retailer’s fifth store in the capital and follows a similar small-store launch in Shenzhen, underscoring a growing preference for neighbourhood-focused formats that bring IKEA closer to customers.
“Beijing has always been one of our key markets in China,” said Pontus Erntell, President-IKEA, China. “We are now bringing IKEA closer to a new community in the capital and, with further expansion both physically and digitally, to many more people across China.”
The strategy reflects a broader global push by Ingka Group, which has already opened 21 new IKEA locations across Europe, North America and Asia this year, spanning a mix of compact urban stores and larger formats.
According to Javier Quiñones, the retailer is embracing a more flexible approach to expansion. “One solution doesn’t fit all. We are getting closer to more people than ever, whilst continuously learning how to optimise our offer and presence.”
The pivot comes as IKEA reshapes its China footprint amid shifting market dynamics. Earlier this year, the company announced the closure of seven large-format stores across mainland China as part of a “store network optimisation” strategy, moving away from scale-led growth toward more targeted market penetration.
Smaller stores, often just a fraction of the size of traditional outlets, are designed to improve accessibility, cater to urban lifestyles, and complement digital channels. They also allow IKEA to create more localised touchpoints and respond to evolving demand patterns, particularly as China’s property slowdown impacts furniture sales.
Looking ahead, IKEA plans to continue rolling out small-format stores in key cities such as Beijing and Shenzhen, with more than ten such locations expected over the next two years, reinforcing China’s position as a strategic growth market despite near-term headwinds.
