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Last Updated: Friday, 2 December 2005, 08:31 GMT
Ikea to double presence in China
Ikea's existing Beijing store
Ikea has its eye on more Chinese stores
Swedish retailer Ikea is to expand in China, building a regional distribution centre and doubling its outlets over the next 18 months.

The home furnishing firm is to spend $82m (47m) on a distribution centre in Shanghai as well as opening new stores in Chengdu, Shenzhen and Beijing.

Ikea is also planning to replace its existing Beijing store, first opened in 1998, with a much larger outlet.

The retailer is also due to open its first Japanese store in April.

Key markets

The outlet will be in Tokyo.

"China and Japan are the two most important markets in Asia for us," Ikea's chief executive Anders Dahlvig told Dow Jones Newswires.

We have really invested everything into reducing our sales prices
Anders Dahlvig, Ikea chief executive

The construction of a new distribution centre in Shanghai marks a significant expansion for the company in China.

Its Chinese stores are currently supplied from Malaysia.

Ikea has set itself a medium-range target of having ten stores in China as well as making a profit on its business there in the next few years.

The company has acknowledged that its prices were too high when it first entered the Chinese market seven years ago.

It has since cut its prices and modified its range.

"We have really invested everything into reducing our sales prices," Mr Dahlvig said. "Everything we gain is pushed back into lower prices."

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