Swedish home furnishing producer IKEA already has over 250 stores in 24 countries. It is still aiming to expand its global market especially in China. You may want to ask: what makes IKEA so popular in China? In addition to the standardized products and good service, the price it offered is also a significant attractiveness to customers.

IKEA aims its target group on young low to middle income family. So it always try to keep cost between manufacturers and customers down, which is the basis IKEA used to be successful in its target market. According to what the IKEA China manager Ian Duffy said, IKEA will still remain the low price strategy to make the products more affordable for more customers.

The IKEA’s product price did decreased by about 12 percent in 2002 in China, which attracted more customers to choose it. In present days, IKEA launches a new strategy called “The Lowest Price in Beijing”. According to the new strategy, the price is going to be 20% cheaper than other home furnishings stores. The Chinese are famous for their reluctance to spend their money. Due to this reason, IKEA launches the low price strategy when entering the Chinese market while other western retailers always set 20% to 30% higher price than local markets in China.

The IKEA’s low pricing strategy in China’s market does make a great effect on attracting customers and helps it expands market share successfully. It also helps the brand be differential from its competitors.

As Wenyu Liu mentioned in her blog ”

How does a brand atrracts customers and gains loyalty

” :”

Differentiating from other brands is what every brand wants to achieve ultimately. Setting your product apart from its competitors is an essential first step toward creating preference and loyalty.” Ikea makes it throuth the low price strategy to attract customers and keep their loyalty.