These local factories resolved the problem of high import taxes in China.
Local suppliers were banned from providing raw material and furniture to IKEA, and the company was not allowed to showcase its furniture in industry exhibitions. Today, IKEA is the world's largest furniture retail chain and has more than 300 stores globally.
In 1998, IKEA started its retail operations in China. The venture served as a good platform to test the market, understand local needs, and adapt its strategies accordingly.
Indeed, local competitors copied IKEA's designs and then offered similar products at lower prices.
IKEA decided not to react, as it realised Chinese laws were not strong enough to deter such activities.