The 9.9 yuan "Nordic Poor Ghost Meal" went viral, and the "middle-class idol" IKEA also lowered its prices.

Even the "big-eyed and bushy-browed" IKEA can't hold on anymore.

Starting May 1st, the Swedish home furnishing retail giant IKEA launched a new round of price cuts, marking its third round of reductions within a year.

The price-cutting trend has also reached IKEA China: a 9.99 yuan meatball + mashed potato combo, 13.49 yuan spaghetti with meat sauce... IKEA China's discounted Friday meals have been humorously dubbed the "Nordic broke meal" by netizens, following "Crazy Thursday," now playing the "broke meal Friday" meme.

In fact, as early as August last year, IKEA China announced it would invest in price reductions for over 300 products. The so-called "price investment," as IKEA China explained, is aimed at promoting consumption by recognizing the public's increasing emphasis on rational spending and more diversified consumer demands.

In other words, from the consumer's perspective, price investment is pretty much the same as price cuts.

Earlier this year, IKEA China announced it would invest over 100 million yuan to expand the scope of price reductions, rolling out more lower-priced products throughout the 2024 fiscal year, with an expected total of over 550 items, including some IKEA food products.

Representative price-cut items include the FÖSSTA work lamp dropping from 149 yuan to 99 yuan and the BILLY three-drawer cabinet falling from 999 yuan to 799 yuan.

After IKEA China announced its price investment strategy, several home furnishing brands followed suit with their own price reductions.

Looking back at IKEA China's growth history, the brand entered the Chinese market in 1998, gradually climbing into IKEA's global TOP10 markets with its "middle-class lifestyle" branding. In the 2015 fiscal year, IKEA China's sales hit a record 10.5 billion yuan, a year-on-year increase of over 18%.

According to IKEA's official data, China is the only market outside Sweden where IKEA has a complete value chain.

In April, François Brent, Senior Vice President of IKEA China, stated that the company plans to invest 6.3 billion yuan over the next three years to drive sustained price reduction strategies and focus on omnichannel integration and optimization. He revealed that after implementing the price-cut strategy, IKEA China's consumer awareness increased by 6 percentage points.

This also means that IKEA China, once an "idol of the middle class," is now fully lowering its stance to capture more down-market segments.

Globally, IKEA's price reduction strategy has shown some initial success in improving financial performance. In the last four months of the 2023 fiscal year, IKEA launched promotional price cuts, leading to a rapid rise in retail sales during the discount period, boosting the fiscal year's retail sales by 6.6% to 47.6 billion euros.

However, whether the price-cut strategy will be effective for IKEA China remains to be seen. The strategy also carries risks, as excessive price competition could damage the brand's image—after all, IKEA's "middle-class lifestyle" with its Nordic laid-back vibe is deeply ingrained in consumers' minds.

More importantly, unlike IKEA's "home base" in the Nordic market, China's e-commerce sector is highly developed, and the online home furnishing market cannot be underestimated. However, IKEA China missed the optimal investment period for e-commerce, which remains a significant weakness.

As a global home furnishing brand, IKEA has been seeking ways to adapt to the Chinese market, with price cuts being one strategy that aligns with both its global approach and Chinese consumer preferences. After all, low prices are often a real "game-changer."

Author | Jiang Chuan

Layout | Cathy

Supervisor | Yoda

Producer | No.2 Research