IKEA Shuts 7 Stores in China Amid Housing Slump

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Feb 4, 2026 - 10:49 Updated: Feb 4, 2026 - 00:29
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IKEA Shuts 7 Stores in China Amid Housing Slump

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IKEA shut seven large stores in mainland China on Feb. 2, scaling back some of its best-known big-box locations as weak housing demand and changing shopping habits reshape the market.

The closures, spanning major and mid-sized cities, come as China’s prolonged property downturn continues to dampen demand for new-home furnishings, while more consumers browse online and expect faster delivery.

IKEA first announced the closures in a January statement, saying it was closing stores this month in Shanghai’s Baoshan district, Guangzhou’s Panyu district, Tianjin’s Zhongbei area, and in the cities of Nantong, Xuzhou, Ningbo, and Harbin.

The move reflects broader pressures across China’s housing-linked economy. Official data show the property sector remained under strain in 2025, with real estate development investment down 17.2 percent from a year earlier and new home construction starts falling 20.4 percent. Online retail sales of physical goods rose 5.7 percent to nearly 11.82 trillion yuan (about $1.7 trillion) from January to November 2025, accounting for more than a quarter of all retail sales.

Together, these trends have undercut the traditional big-store model that once helped fuel IKEA’s expansion in China.

Rather than pulling back entirely, IKEA is adjusting how it operates in the Chinese market.

The company said in its statements last month that it plans to open more than 10 smaller, more targeted outlets in city centers over the next two years, with a focus on major markets such as Beijing and Shenzhen. IKEA said it’s also investing heavily in pricing and online reach.

Deepening Real Estate Slump

Research by Harvard economist Kenneth Rogoff and International Monetary Fund economist Yang Yuanchen estimates that real estate and its supply chain—such as construction materials, home furnishings, and property-related services—together account for roughly a quarter to a third of China’s gross domestic product (GDP).
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As Chinese households hold a large share of their wealth in property, falling home values also make consumers more cautious about spending, U.S.-based economist Davy J. Wong said. When home prices fall and construction slows, the impact spreads beyond developers to industries such as steel, cement, appliances, and real estate services.
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“Imagine your property value suddenly fell by 50 percent—would you still feel confident spending?” he previously told The Epoch Times, describing what he sees as the psychological hit many households have felt since China’s housing downturn began in mid-2021.

With weak domestic confidence, Wong said China faces a tighter squeeze than economies driven more by consumer spending.

The current downturn traces back to a major policy shift in 2020, when regulators introduced the “three red lines” to limit how much debt property developers could take on. The rules helped trigger the collapse of Evergrande, once China’s largest developer, and set off a wave of financial stress across the sector.
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That stress has yet to fully ease. Data from China Index Academy, a Beijing-based Chinese real estate research institute, show that 77 developers defaulted on their debts between 2020 and August 2025. While around 60 troubled firms have made some progress on restructuring, only about 20 have had formal restructuring plans approved.

IKEA has been part of China’s consumer landscape for decades. The company began sourcing from China in the 1960s and opened its first mainland store in Shanghai in 1998. Over time, many of its large stores became weekend destinations—part showroom, part café, part social space.

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