Retail revival in Japan

The first attempt’s failure rested on everything from a lack of capital to a serious lack of insight into Japanese society. Only later did IKEA realise it was very hard to sell three-seater sofas and tall bookcases to city folk living in small spaces. To then expect them to transport their furniture home and assemble it themselves… Well, to many Japanese people, that was an insult.

The plan was to open the first store in about 2005, but Ingvar Kamprad wrote a letter to head of IKEA at the time, Anders Dahlvig, warning him not to hurry things. Ingvar remembered Japan as “a special market that requires a lot of preparation, especially in terms of quality.” He also recommended, based on his own experience from the 1970s, that they must “get it right from the start, we’ve already had a big failure there.” Ingvar felt that IKEA had a lot to learn from Japan when it came to raising the service level “a fair amount”.

Any place but home

As early as 2002, IKEA veteran Gordon Gustavsson came to Japan to make preparations for the new store. Around the same time IKEA employed Tommy Kullberg, a business advisor who had lived in Japan since 1988. Tommy wanted IKEA to take things slowly, explaining that the Japanese were “the world’s most quality-conscious consumers.” Even so, both Gordon and Tommy felt that the time was right to enter the Japanese market. Tommy often said, regarding the first failed attempt, that Japan wasn’t ready for IKEA back then, and IKEA wasn’t ready for Japan.

Japanese society had changed a lot since 1986, in ways that could benefit IKEA. People’s opinions of low prices had softened slightly, and a low price no longer simply meant low quality. Some younger Japanese people might even consider assembling their own furniture. But the general view was still that the home was only somewhere to sleep and store one’s possessions. According to Tommy Kullberg, in Japan it was not the home that was most important, but the office. ”Home was a kind of parking place for the body where you bathed and slept,” says Tommy. Interest in home furnishing was traditionally low, and many people only bought furniture once in their lives, when they got married.

For many years, long working days and small space living had shaped the Japanese lifestyle. The men made up the majority of the workforce, and they rarely went straight home after work; they went to the bar with colleagues instead. The large proportion of women who stayed at home with the children went to parks, and to the children’s departments in big stores. For IKEA, whose whole business concept was about helping people to create a better everyday life at home, Japan would be a real challenge.

Enlightening visits

IKEA began its Japanese campaign by making more than 100 home visits in Tokyo, to singles and families with children, young urban couples, and suburbanites. Experts crawled across the floors with tape measures, rooted around in wardrobes and kitchen cupboards, and took notes on what, for IKEA, were new kinds of bathroom solutions and built-in wardrobes.

They also studied more than 40,000 photographs from Japanese homes. It was clear that most homes had low ceilings, and the walls were clad in fabric or had rough surfaces that residents did not like drilling holes in. Balconies were used exclusively for washing machines and laundry airers, and to air futon mattresses. There were few plug sockets and little focus lighting, instead the home was often lit with a single strong ceiling lamp.

Early on, IKEA saw great potential for lighting, kitchen furnishings, crockery and the children’s range, among other things. School-age children usually had their own room as they needed to study, as their parents explained. The experts also noted that most homes were quite untidy, with “a lot of stuff.” Huge piles of clothes and other stuff were often hidden behind stylish cabinet and sliding doors.

“We could see a great need for smart organisation and storage,” remembers Christopher Binz, who during his early time with IKEA in Japan made home visits and also studied the competition’s stores. He was one of thousands of Swedes tempted by an advertisement in the early 2000s, with the header “Do you want to live in Japan?”

IKEA was looking for Swedes who spoke Japanese and were familiar with both Swedish and Japanese culture. They could act as ambassadors in the Japanese stores in a new initiative called YPP, the Young Potential Program.

Christopher Binz, who had studied Japanese in Kobe at the age of 20, was selected alongside 30 or so others following a language test and interview. Anna Ohlin, today the head of IKEA in India, was also employed within YPP. At that time, she had been living in Japan since the early 1990s and had married a Japanese man. She was immediately installed in a mini-office in Tokyo and was responsible for everything from recruitment to analyses, competitors, and positioning.

Everyone who was chosen had lived in Japan due to a wide variety of interests, from language and tea ceremonies to martial arts, video games, manga and fashion. Some had also grown up in Japan but had strong ties to Sweden for various reasons. They would work with local employees to ensure that IKEA was a success.

In 2004 Mai Tanigawa, now home furnishing and retail design manager, came to IKEA at the age of 20. It was her first ever job. Mai will never forget her job interview with an elderly Swedish man, her soon-to-be boss. “I was nervous as I had no work experience at all. But he mainly asked me about my values, about what kind of person I was and what I wanted to do in the future. He finished off by saying that he trusted me and would support me, and that made me fall in love with IKEA from day one!”

New employees in both Japan and Sweden were first sent abroad to learn about IKEA in stores in China, Australia, the US and elsewhere. Only Christopher and a few others stayed in Sweden as they had young children. “But nothing could beat learning about IKEA at Kungens Kurva in Stockholm, Sweden,” he says. Once his work experience was completed in 2005, he travelled to Japan with his partner Camilla, who was pregnant at the time.

From ski slope to store

The first store was to be built in Funabashi, Tokyo, on the site of the world’s biggest artificial ski slope, which had closed in 2002. To deal with construction dust in the densely populated city, in Japan they prepare the ground by wetting the dry soil for several months in advance. IKEA wanted to save time, and sowed grass instead. This turned out to be a mistake. The lawn attracted a large flock of rare migratory birds, which settled and built nests. This meant that construction had to wait until the birds moved on. The upside was that IKEA had a few extra months to make preparations.

On 24 April 2006, IKEA opened its 40,000 square metre store in Tokyo – the second largest one in the world after Kungens Kurva in Stockholm. There was an advertising campaign before the launch, with billboards across Tokyo promoting the idea of home and children being the most important things of all. Headlines like “Home is the most important place”, “Have you seen your children today?”, “Stay at home” and “Do you play with your children?” were provocative to a lot of people. Some felt that the campaign was encouraging people not to go to work! In fact, several metro companies refused to put up the billboards at their stations. Even so, IKEA was glad of the publicity.

Inside the store, Swedish and Japanese interior decorators had built around 70 room settings customised to Japanese conditions. IKEA showrooms were normally about 4 square metres, but Japanese measurements were based on tatami mats. So the rooms were 4.5 tatami mats, or 3 square metres, and they displayed everything from compact home libraries to imaginative furnishing for gaming enthusiasts.

Four apartments of about 30 square metres exemplified furnishing and organisation for families, with smart shelving systems, and storage in stools and beds. Customer service manager Aya Kosai remembers that the rooms were adapted to Japanese styles, but the walls had been painted in bright colours. “After a while we repainted them white and beige. Then later on we repainted them again, once consumers had got used to the bright colours.”

Huge crowds and long queues

On the first day, 35,000 curious visitors turned up. Christopher Binz, who later was involved in the opening of another department store, in Kohoku in Yokohama, was fascinated by the difference between Japanese and Swedish consumers. “Despite the huge crowds, it all felt calm and well organised. After a similar rush in Sweden, there was chaos at the store in Kungens Kurva. Products were in the wrong place, and in the self serve area we would always find open boxes and a whole lot of mess. In Japan, people took their shoes off before going into the showrooms, even the young children.”

To adapt to the high level of service required in Japan, the new IKEA store had more employees than in other countries, although some aspects of the standard strategy remained the same. For example, waiting for people to ask for help rather than approaching them and asking if they needed it. That was confusing for visitors, and a huge change for the Japanese co-workers. And the fact that they had to welcome visitors with Konnichiwa minnasan (Hello friend) rather than Irasshaimase konnichiwa (Welcome, hello) felt almost rude. But the visitors were pleasantly surprised by the low prices.

Yuki Murata, one of the many fresh university graduates who were hired in 2004 to learn everything about IKEA ahead of the store opening, remembers how strange it felt. ”I had interned at IKEA in other countries, but it felt very uncomfortable to address Japanese customers in that manner. And at the same time, it was somehow liberating!”

Many products sold out, and the rush continued when another three stores opened in 2008. “There were so many people at the weekends that they had to queue outside for up to two hours. There were traffic jams on the roads, and a special phone line was opened to tell people about extremely busy periods and queuing times,” says Aya Kosai, head of customer and consumer measurements in Japan.

Founder Ingvar Kamprad came to the grand opening in 2006 and surprised the Japanese co-workers with hugs and handshakes. Aya, who worked on the shop floor at the time, shook hands with Ingvar. “I mainly remember how big his hands were, and that he was also hugging people. That was nice!” Aya’s colleague Tamae Asayama will never forget when Ingvar Kamprad, at the grand opening, noticed that the soil in the plant pots was dry and had to be watered immediately.

Home delivery and many returns

IKEA did not want to completely abandon its global strategy of having customers do some of the work themselves, by transporting and assembling the products. But in Japan, alternatives were needed. From the beginning, customers could list the smaller products they wanted delivered home in a so-called tebura de box. Home delivery was also available for larger products, like furniture. At the time, this was rarely used in other countries, but in Japan things were very different. Most customers requested home delivery and also help with assembly.

“People simply couldn’t comprehend the concept as they had never seen anything like it before,” says home furnishing and retail design manager Mai Tanigawa. IKEA tried to promote self-assembly as a “warm family activity.” Assembling a chair at home would strengthen the sense of family as people made a home together. But the do-it-yourself concept, one of the foundations of IKEA, never did catch on in Japan, even though there was less resistance in 2006 than back in 1974.

Lessons learnt

Despite meticulous planning and preparation, IKEA got to learn a lot in the first few years. Home delivery was one thing, but getting the furniture through narrow door openings and into small lifts was quite another. Christopher Binz explains that there were a lot of returns in the early days. “We had to produce exact instructions for customers to measure the size of their lifts and the height of their ceilings, to make sure the furniture would actually fit. We also had to adapt some of the assembly instructions. For example, wardrobes sometimes had to be assembled standing rather than lying on the floor, as people couldn’t always stand them up afterwards.”

The Japanese co-workers also came up with a lot of their own initiatives. One day, Christopher saw that all the yellow shopping bags at the entrance, that were usually all screwed up, had been carefully folded and presented in neat piles. And in the washing-up room in the restaurant, one young man realised that almost all the plates were coming back with a single uneaten potato. “He suggested we give the guests one potato less,” says Christopher. “That way, we reduced waste and also saved money – a typical IKEA solution!”

A customised range

Even in 2006 the range in Japan had been adjusted slightly, with fewer three-seater sofas and huge wardrobes that were so popular in other countries. The first store had filtered the range down from the usual 10,000 products, and a few years later IKEA in Japan had trimmed it down to 7,500 products that suited Japanese homes. The height of some of the bookcases, wardrobes and other products had also been reduced – adaptations that IKEA had not made anywhere else in the world.

Since 2006, IKEA Japan has worked diligently to show how Democratic Design can make life at home a little better, also in Japan. “Flexible functions and smart solutions for small space living are an important priority,” says home furnishing manager Mai Tanigawa. Some products have even been developed especially for Japan, including a smaller version of the popular RÅSKOG trolley, called RÅDHULT, and the neat modular sofa HALVDAN.

“Most sofas at IKEA are too big for Japanese homes, but people still want a sofa as it creates a homely feel,” Mai Tanigawa explains. Interest in focus lighting has also increased over the years. “People want it in their homes, but don’t quite know how to make it happen. That’s something we can help with.”

After a long journey involving two attempts, IKEA now seems to have found its place in Japan, especially since online shopping was rolled out in 2017. In 2024 there were ten full-size stores, three city stores and 20 pop-up stores. Japan’s first city store opened in 2020 in the trendy neighbourhood of Harajuku, and two were added soon after in Shibuya and Shinjuku.

The city stores bring in the younger generation who prefer to pay at self-service checkouts, and taste Japanese-Swedish fusions like matcha-flavour buns at the cafés and restaurants. This time round, IKEA is in Japan to stay.