Shopping area to take up less than half the space; zoos and a small racetrack for horses included
Ikea, the Scandinavian-based furniture retailer, announced on Dec 6, its biggest investment yet: an 8 billion yuan ($1.2 billion; 1.05 billion euros; ￡940 milion) shopping mall to be built in Shanghai.
The new project will be located adjacent to Hongqiao International Airport in the western part of the city. It will operate under the brand Livat and is expected to open at the end of 2022.
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Pedestrians walk past an Ikea center in Shanghai. Provided to China Daily |
When built, the complex will cover a total area of 430,000 square meters, of which 120,000 will be devoted to over 300 retailers for clothing, catering, entertainment, education and sports.
The Swedish company’s furniture store will naturally be included in the new project; however it will aim to take the company in a new direction, featuring less warehousing and instead relying more on digital tools.
According to Ding Hui, president of Ikea Centers China, one rule for the Shanghai project is that the shopping area should take up less than 50 percent of the total space. The rest will be devoted to other types of business, such as zoos and a small-sized racetrack for horses.
The project will also feature Ikea’s first Grade A office, featuring 60,000 square meters of modern office space, styled with Ikea furniture.
They will be designed with office-sharing in mind, in light of that sector’s growth in recent years. Ikea is still deciding whether to operate the offices on its own or cooperate with qualified third-party property management companies, Ding said, adding that the enterprise hoped the space will attract more companies from Northern Europe.
Upon completion, the complex will support about 3,000 jobs, making it Ikea’s biggest location, excluding its headquarters in Sweden.
Beyond Shanghai, Ikea plans to build another two new Livat projects in Changsha, Hunan province, and Xi’an, Shaanxi province, which are scheduled to open in 2020 and 2022.
The new megaproject, the largest in Ikea’s 75-year history, comes as the brand is undergoing a strategic transformation. According to its CEO Jesper Brodin, the company will integrate full digital solutions in all countries, and move away from the out-of-town stores to more centers within cities.
Ding, who oversees Ikea’s Chinese shopping centers, said the company is looking to bring smaller-sized centers to the country. For the Livat brand, Ikea will also introduce some smaller complexes to test the waters in China.
Ikea first introduced retail brand Livat to China in 2009. So far three Livat projects have been built – in Beijing; Wuxi, Jiangsu province; and Wuhan, Hubei province. The three have a combined lease area of 530,000 square meters and had a total investment of more than 10 billion yuan.
(China Daily European Weekly 12/14/2018 page27)