IKEA sales, which fell 5% in its financial year ended Aug 31, are highly sensitive to property markets and interest rates as people spend more on furniture and homewares when moving house, and downturns tend to dent activity.

“Still we see consumer confidence in China is slightly lower than the global average, (but) we are optimistic that the stimulus package will have a positive impact,” said Jesper Brodin, CEO of Ingka Group, which runs most IKEA stores globally, including in China.

“We would like to encourage even more stimulation to the market because the market needs a little extra boost,” Brodin added.

China accounted for 3.5% of global sales for Ingka Group in its 2023-24 financial year, down from 3.6% in the previous year.

In September, Ingka opened an IKEA store in the Changning District of Shanghai, its fourth in the city.

IKEA now has 39 stores in China, four more than in its 2022-23 financial year, and it said store visits increased by 11% over the year.

Since entering China in 1998, IKEA has expanded aggressively and the country was for several years in its top five markets by revenue, but its relative weight has since fallen.

Price reductions across its range helped boost sales this year, IKEA said.

The number of VALEVAG mattresses sold jumped by 44% after the price was cut to 1,799 yuan from 1,999 yuan.

In an effort to reverse its economic downturn, China unveiled two weeks ago its most aggressive monetary stimulus package since the Covid-19 pandemic, coupled with extensive property market support.

China’s finance ministry is set to hold a press conference on Saturday to provide details of the stimulus plan.

“We are quite excited to see what this (stimulus) would mean for the Chinese economy and in particular for the Chinese home furnishing market,” said Tolga Oncu, Ingka retail manager at Ingka Group.

“We are doing the assessment as we speak.”