Swedish furniture chain IKEA plans to add 10 stores to its existing sales network on China's mainland in the next six years, according to IKEA sources.

The new stores will be located in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, Nanjing and Wuhan, announced Ian Duffy, general manager of IKEA China. 

The Beijing-based store will start operation by the end of 2005. It will cover an area of 43,000 sq. meters and will be the second largest IKEA store in the world. The cost of each new store will be between 40 to 80 million US dollars.

IKEA statistics show the company's current turnover in China accounts for less than 1 percent of its global total. However, growth of the profit margin and market potential in China are greater than anywhere else, said Ian Duffy.

In IKEA's 2004 fiscal year dating from September 2003 to August 2004, the Swedish firm's global income increased by 15 percent while turnover in China grew by 40 percent. It is estimated China will become IKEA's largest market in 10 to 15 years.

At present, IKEA purchases 23 percent of its products in China, the largest worldwide. The price competitiveness of Chinese products helped reduce the average IKEA price by 6 percent on a year-on-year basis in 2004.

IKEA entered China in 1998 and now operates stores in Beijing and Shanghai. Its turnover in China totals 1 billion yuan (121 million US dollars) in the 2004 fiscal year.

The Swedish firm was established in 1943 and now has 200 chain stores in 32 countries and regions. Its global turnover totals 13.2 billion euros (15.79 billion US dollars) in its 2004 fiscal year.

Editor: Olivia