(Yicai Global) Aug. 25 -- The parent firm of Inter Ikea Systems will inject CNY5.3 billion (USD773.7 million) into the Chinese market in the next fiscal year starting September, as the Swedish home furnishings giant remains upbeat about the prospects of the China market despite the toll taken on retailers by the ongoing Covid-19 pandemic.

The funds injected by Ingka Holding will be used for a digitization push, the construction of new outlets and enhancing operational ability, The Paper reported yesterday, citing Ikea China President Anna Pawlak-Kuliga. 

China is one of Ikea’s crucial strategic markets, and the company has full confidence in it, Lydia Song, vice president of Ikea China, said at the China arm's fiscal year 2023 kick-off meeting.

Ikea has been making great efforts to shift its retail model online amid an accelerating transition to e-shopping during the pandemic. Low footfall meant that the firm shut two brick-and-mortar outlets last year, one in Guiyang and one in Shanghai. They are the first store closures since Ikea entered the China market 24 years ago.

Ikea China’s online business grew by over 70 percent in each of the fiscal years 2020 and 2021, and strong growth is expected for this fiscal year as many events are being held, Pawlak-Kuliga said.

The firm has started to branch into livestreamed e-commerce. Last year it hosted over 200 live sales events, and this year it is likely to hold five times as many, according to Francois Brenti, another VP at Ikea China.

Taking into consideration the impact of the pandemic and macroeconomic factors, Ikea China will make adjustments to the layout of some customer touchpoints and its online retail channels, Song said. Ikea want to stay flexible based on changes in the market environment and consumers' spending habits, she added.

China is the only overseas market which operates a complete Ikea value chain. The Netherlands-based Ingka Holding runs 33 malls, one urban shop, two experience stores and seven Livat centers on the mainland.

Editor: Kim Taylor