IKEA in Japan: from a disastrous debut to a triumphal return
Be inspired by the success story of IKEA in Japan
Have you ever been to the roller coaster? Here, the entrance of IKEA in the Japanese market was a bit like one of those crazy and exciting races on the flying table.
The Swedish furniture giant is known worldwide for its furniture products, but when it was to conquer the heart of Japan, things have not immediately gone in the best way.
We discover how IKEA has overcome obstacles and initial failures to become a family name in the homes and hearts of the Japanese.
SUMMARY:
1. The failure of the localization strategy of IKEA in Japan
- Too large furniture for Japanese homes
- The DIY method: a business model that doesn't like Japanese
- The importance of balancing price and quality
2. IKEA in Japan tries again
- The customer in the center
- Adaptation strategy to the local market
- Offer quality products at affordable prices
3. IKEA experience in Japan: a teaching for SMEs
What did IKEA wrong in its launch in Japan in 1974?
The reasons for failure of the localization strategy
IKEA, made its debut in Japan in 1974. But, as it turns out, it didn't go exactly as planned: it stayed behind compared to competitors in terms of compatibility with local taste, customer experience and price quality ratio. This led to a retirement from the scene in 1986.
So, what went wrong?
Too large furniture and complicated transport
Ikea entered Japan with an idea “Let’s make smaller shops, so that it seems more welcoming to the Japanese public”... sin than being small in Japan are the houses.
The first and, probably larger, IKEA problem in Japan was just the size of its furniture: standard worldwide.
Those furniture that were perfect for Northern Europe houses apparently did not fit well in Japanese apartments.
And there was another problem: they didn’t count on the fact that the Japanese move to the major by public transport. Now, think about it: if you bought a sofa and came to the store by public transport, how do you transport the huge box at home? Calling a taxi or a carrier increases the total cost of the purchase and the number of actions you have to do before you can use your sofa.
The method you do: why didn't it work in Japan?
We all know that IKEA is the realm of “do it yourself.” Go there, choose the furniture you want, take them home, and then start the fun. But the beauty of cultural differences is that what is normal in one place might be strange in another.
In Japan customers prefer a “factor-per-me” approach, we say. They don’t like to spend hours trying to figure out how to mount a mobile by themselves, prefer the convenience of having the furniture delivered already ready to use.
So, the “do it yourself” at ikea was not exactly a winning ticket in Japan. That’s why they had to review their plan and learn how to serve Japanese customers in the right way.
Quality is more important than price
Quality is a crucial point when it comes to choosing furniture and household items. IKEA offers affordable options that can last longer than you expect, despite not making use of the most expensive materials.
However, in Japan, the quality is often more important than the price. IKEA products are easily replaceable and interchangeable, but the general trend in Japan is to invest in a more expensive product that lasts long rather than to continue to replace items of the lowest price ranges.
In addition, buying a more expensive furniture from another dealer, you avoided the problems related to the size and you also got the delivery and assembly included in the price.
IKEA returns to Japan with a new strategy
After the failure of his first attempt, IKEA took 20 years to redefine his approach and returned to Japan in 2006. JETRO (Japan External Trade Organization), which has laid the foundations for its success.
When IKEA returned it was already conducting consumer research in Japan for 5 years: it visited more than one hundred homes, conducted surveys and analyzed deep the Japanese market and competition
He learned from his mistakes and adapted his strategy to the Japanese market.
A flexible customer experience for everyone: how IKEA has met the needs of Japanese customers
IKEA returns to Japan with a new strategy, finding solutions that fit Japanese traditions in terms of customer experience:
Tebura De Box
Although he did not surrender to his approach of containment of costs, leaving transport and assembly to the customer, he had to find a solution.
Customers could make a list of the desired items and IKEA would send them home for an additional cost. This service then was “exported” in all the chain stores worldwide. Eh yes, if you are young maybe you do not remember that once from IKEA delivery services were not at all available.
If the Assembly is not your Fort...
Just as for transport, the case of the Japan has made available worldwide the possibility to book the furniture assembly service at a surcharge.
The flat-pack system
The key principle of flat-packs, as you can guess, is to pack the item in rectangular boxes and relatively thin to facilitate transport and stacking. On the one hand, flat-packs occupy less space, on the other protect items from damage during transport.
Specific product adaptations
IKEA has selected 7,500 items from its global range that match the standards of Japanese families.
The marketing strategy that focuses on small spaces
Ikea in Japan realized that you can't just sell furniture, you have to solve a problem, and what's the problem?
The Japanese Ikea has become a master in art to make the most of every square centimeter.
So what did they do? They created furniture solutions that make every corner of the house look like a hidden treasure. Folding tables that hide under the sofa, beds with secret drawers, stools that become tables...
Everything is designed to make you feel like you have more space than you actually have.
The success of IKEA in Japan: an example to follow
IKEA’s experience in Japan is an important teaching for SMEs that want to expand into new markets. The company has made some mistakes in its first attempt to enter the Japanese market, but has then learned from its mistakes and developed a new strategy that has been successful.
Here are some lessons that SMEs can learn from the experience of IKEA:
- Doing your own research: It is important to understand the cultural differences and consumer preferences of the target market.
- Adapt your product or service: it is important to adapt your product or service to the needs of the target market.
- Offer a high quality customer experience: It is important to offer a high quality customer experience that meets the expectations of consumers in the target market.
IKEA has shown that it is possible to succeed in an international market, although it is different from its source market.
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