China Consumer

Midnight madness

IKEA shoppers get more than they bargained for

Ikea w

Last Friday it opened a lot later

A shopping trip to IKEA, and the subsequent process of assembling its furniture, could be lethal for a couple’s relationship. That’s allegedly thanks to the high levels of stress caused by both activities.

“The store literally becomes a map of a relationship nightmare,” Ramani Durvasula, a clinical psychologist in the US, told The Wall Street Journal. “Walking through the kitchens brings up touchy subjects, like who does most of the cooking. Then you get to the children’s section, which opens up another set of issues. And that’s before you’ve even tried assembling anything.”

In spite of such risks thousands of shoppers in Hong Kong were willing to jeopardise their relationship last weekend at IKEA. That’s because the Swedish furniture giant hosted a “Midnight Madness Sale” at its Kowloon Bay store, featuring more than 1,000 products that were discounted heavily.

The event, which started at 11pm on Friday local time and ran until 2am on Saturday, offered discounts – some of up to 90% – on home and garden products, including seating, storage furniture and lighting products. Food products from Sweden also carried 15% discounts.

According to the Apple Daily, lamps that normally cost HK$799 ($100) got discounted to only HK$79.9. Similarly, a sofa that retailed for HK$13,990 was available for just HK$1,399. Small wonder then that the floor that featured the most heavily discounted items was cleaned out of stock only 20 minutes into the event.

Even though Hongkongers have long prided themselves for being more civilised and better mannered than their mainland Chinese brethren, the IKEA sale looks to have dented that image. Apple Daily says the IKEA outlet was so crowded that many local shoppers couldn’t move and amidst the chaos some customers got into violent fights to snatch the best bargains.

Around 7,000 turned up (the last customer left at 6am), but whether IKEA achieved high levels of client satisfaction is less clear.

While a minority got incredible bargains, most others left empty-handed and exasperated by the crowded experience. “I’ll never shop at IKEA again,” one disgruntled shopper told Apple Daily. “This marketing stunt has turned into a PR disaster,” another complained.

Meanwhile, IKEA is already looking beyond midnight hours in its upcoming promotions. Starting this week, the Hong Kong Standard says the furniture giant is expected to launch a further summer sale that will carry discounts of up to 90% at three stores in the territory.

In another sign that times have become increasingly tough for home furnishing outlets, Home Square, another retailer, is launching what it calls “Smart Buy Weeks” from July 19 to August 16, with some 58,000 limited-edition items offered at what is claimed to be bargain prices.

But it is not just furniture shops: the overall retail industry in Hong Kong is facing headwinds. The total value of the territory’s retail sales last month, provisionally estimated at $5 billion, was down 0.1% compared with the same month last year. It was the third monthly decline in a row. Industry observers reckon that many Hong Kong retailers will soon have to cut prices dramatically to drive consumption and lower inventory.

One of the problems is the drop in mainland shoppers. Put off by cross-border political tensions that erupted last year (and which led to protests against mainland shoppers), Chinese tourist are now taking advantage of weaker currencies and spending their tourist money in countries like South Korea and Japan instead (see WiC272).

Meanwhile, the number of mainland visitors to Hong Kong rose just 1% in April, against a 14.7% increase a year earlier, figures from the Hong Kong Tourism Board shows.

Many retailers are now negotiating rents reductions or putting expansion plans on hold, says the South China Morning Post. For example, the newspaper noted last month that shop rents were being cut by 20% in Russell Street in Causeway Bay – till recently the most expensive street in the world. The street’s high-end tenants say mainlanders are spending much less these days.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.