After setting up its Chinese headquarters in 2009 in Shanghai, JYSK opened its first store in the same city. This Danish retail chain, selling mattresses, sheets, furniture, and more, was founded in 1979 and has been operating internationally since 1984. JSYK has more than 1600 stores in 34 countries, and they open 2 to 3 stores every week somewhere in the world. Their ambition is clear- to be the worldwide leader by offering products at a low price.

IKEA is JYSK’s most well-known competitor, but the two brands don’t propose exactly the same offer. Quality and price is likely the main difference, with JYSK positioned in a more economical market segment. Their stores are also much smaller than IKEA’s. But, if we look at the total number of stores, IKEA has only 300 stores all over the world. To compare this two multinationals financially, in 2009, IKEA revenue reached nearly €23 billion, whereas JYSK revenue was just over €2 billion. Nevertheless, IKEA may be threatened by JYSK. If we take into consideration the financial crisis and emerging markets, JYSK might have a suitable positioning for price-sensitive market segments.
We should also note that JYSK and IKEA come from the same background. Jars Larsen, the founder and the owner of JYSK, was, as Ingvar Kamprad of IKEA, a self-made man who created his company with only one small store. This is not the only similarity. As IKEA, JYSK strives to improve their brand image by being, for example, linked to a NGO whose main objective is to stop climate change and preserve forests. They also sponsored official organisations for athletes with disabilities in many countries.
The home furnishings and décor market is highly competitive. The most known company in this sector, IKEA, only owns 5 to 10% of market share in the countries where they operate. With their low price offer, JYSK have clearly positioned their brand for the mass market. Therefore, it’s important for the brand to carefully understand the Chinese market dynamics and its consumers’ behaviour. The same strategies used to enter new markets in Europe, Eastern Europe or even North America will certainly have to be modified for China.
Will Chinese consumers be attracted by the hard discount offer proposed by JYSK? Or will they perceive the products to be of low quality? We’ll soon find out, as JYSK intends to open between 8 to 10 new stores in Shanghai before the end of 2010 and more than 500 stores throughout China over the next few years.