IKEA to Close Seven Stores in China as It Shifts Retail Strategy Amid Property Market Slump

BEIJING / SHANGHAI — Swedish furniture and home goods retailer IKEA has announced plans to close seven of its large physical stores in mainland China, signalling a major strategic adjustment in one of the world’s most critical retail markets. The closures are scheduled to take effect on February 2, 2026, as IKEA shifts its focus from broad scale expansion to precision-driven market cultivation in response to a challenging retail environment dominated by weak property demand and shifting consumer behavior.

The seven store closures will affect outlets located in major and secondary Chinese cities, including:

• Shanghai — Baoshan district, once one of the network’s largest stores
• Guangzhou — Panyu district
• Tianjin — Zhongbei district
• Nantong
• Xuzhou
• Ningbo
• Harbin

Economic Headwinds and Retail Pressures

IKEA’s decision reflects broader challenges confronting international and domestic retailers in China. Ongoing weakness in the property market — including slow home sales and cautious spending on new housing and furniture — has dampened demand for large furniture purchases, a key driver of in-store traffic. Economists note that a highly developed online retail ecosystem and prolonged economic headwinds have further squeezed the survival space for large-scale physical outlets.

China’s property sector has been under pressure for several years, weighing on consumer confidence and major purchases such as furniture for new homes. In this context, IKEA’s performance in physical store formats has encountered increasing competition from local brands and online platforms, compelling the company to rethink its traditional retail model.

Strategic Pivot to Small-Format Stores and Digital Platforms

In lieu of maintaining its large format footprint, IKEA said it plans to open more than ten small-format stores in major Chinese metropolitan areas over the next two years. These compact outlets are designed to better align with urban shopping habits, offering curated product selections and experiences tailored for city-center customers. Beijing and Shenzhen have been identified as priority markets for this next phase of expansion, with new outlets expected to open in Dongguan in February and Tongzhou (Beijing) in April 2026.

The emphasis on smaller stores also aligns with a broader omnichannel strategy, as IKEA continues expanding its online presence via its own digital platforms and partnerships with local e-commerce players such as JD.com and Tmall. Retailers across sectors in China have accelerated digital investments as consumer preferences pivot toward online and hybrid shopping formats, where quick browsing and convenient fulfillment are increasingly prevalent.

Maintaining a Presence Amid Change

Despite the closures, IKEA will continue operating roughly 34 stores in mainland China, alongside its digital channels and e-commerce flagship stores. China remains a strategically significant market for the Swedish brand, contributing meaningfully to its global revenue and offering long-term growth prospects even amid a retail slowdown.

Industry analysts highlight that the move does not signal a withdrawal from the country but rather retail optimization in response to evolving consumer behaviors and economic conditions. Smaller format stores are expected to drive more frequent visits, foster better customer engagement, and complement online sales growth — part of a hybrid retail model increasingly adopted by global furniture brands in competitive urban markets.