2

Better Every Day LifeIKEA Serving Customers in China for 20 Years

© Inter IK

EA System

s B.V. 2018

Milestone

Preface

IKEA in China

2017 Financial Year Key Indicators

Expert in Life at Home

- Democratic Design- For the Many People- Provide Homes Inspirations, Create a

Better Everyday Life- Our Stories: Laohu and Diaodiao’s story- Comment Sharing

01

Table of Contents Growing Together with

Our Co-workers

15 Growing Together with Our Suppliers

- Strategic Partners- Look towards the Future- Our Stories: Yuyue Home Textile

09

- Culture and Values- Career Development- Workplace and Benefits- Our Stories: IKEA Co-worker

Development Stories- Comment Sharing

Sustainability

35 Transformation and Innovation

- Customer-centric Multichannel Retailing- Creating a Meeting and Experience Center

21

- People & Planet Positive- More Sustainable Life at Home- Energy and Resource Independence- A Better Life for the People and

Communities- Our Stories:

Wise use of wood resources to protect forests One-time investment, permanent benefit A memorable cafe makeover

- Comment Sharing

Over 70 years ago, IKEA was founded in the rugged landscape of Småland in southern Sweden. Life there wasn’t always easy. To make ends meet, people had to be resourceful, work hard together and make a lot out of a little. The spirit of Småland impacts on every aspect of IKEA, encouraging us to continue to improve and go forward. In everything we do, we focus on achieving our vision: to create a better everyday life for the many people.

In 1998, China ceased the housing allocation practice and implemented housing monetization. The people of China began to truly own their real estate. The improvement of housing condition brought about changes in home concepts and demands. People wanted their homes to be more comfortable and beautiful, they wanted to have a better home lifestyle.

It was during this year that IKEA from Sweden opened its first store in Shanghai, which was the first store in mainland China, bringing Chinese consumers a wide range of well-designed, functional home furnishing products at affordable price. A variety of home inspirations and solutions were also provided to create a better everyday life for the public.

Now 20 years later, IKEA is fortunate to witness and participate in the changes in the home lifestyle of the Chinese consumers, while the Chinese consumers have also constantly inspired and influenced IKEA. With the rapid development of China’s economy and support from all sectors, IKEA’s business in China had grown rapidly and achieved fruitful results in terms of corporate employer branding and sustainability.

2018 marks the 20th anniversary for IKEA in China. Through this brochure, we look forward to recapturing our development in China and witnessing our growth together with consumers, employees and partners. We also look forward to IKEA’s exploration and experimentation in the face of changing customer needs and business environment.

We continue to work hard to create a better everyday life for the many people. In these 20 years, we are filled with gratitude, we are grateful to every single person we have met. We are also grateful for a better tomorrow to look forward to! We look forward to an even more exciting coming 20 years for IKEA in China!

Zhu Changlai Country ManagerIKEA Retail China

Preface

5 6 7 8

MilestoneIn the mid-1960s, IKEA began purchasing products from China. And in 1998, the first IKEA store in mainland China was opened in Shanghai. Over the next 20 years, IKEA has grown rapidly in China with IKEA stores and LIVAT centres opening in more cities. More IKEA business units were also established to create a better everyday life for the many people.

Mid-1960sIKEA makes its first purchase from China

2007IKEA (China) Investment Co., Ltd was foundedIKEA Distribution Service Asia Pacific and IT department moved from Singapore to Shanghai

20064.12IKEA Beijing Store moved to its current location at Siyuan Bridge; one of the IKEA stores with the highest volumes globally

20156.25Opening of the IKEA Hangzhou Store, making IKEA accessible to consumer in Hangzhou

200611.29Opening of the IKEA Chengdu Gaoxin StoreIKEA store opened in Sichuan, the first store that offered local spicy snack

1980Establishment of Hong Kong Trading Office

1997IKEA wholesale company Bolso was established in Shanghai

2011Establishment of the IKEA Product Development Centre Asia Pacific

19991.13Opening of the IKEA Beijing Madian Store

1990-1994

Establishment of the Qingdao, Shanghai, and Shenzhen Trading Offices

200812.1Opening of IKEA Distribution Centre FengxianThe only Low Flow Distribution Centre in Asia Pacific

20146.27Opening of the Wuxi LIVAT CentreChina’s first LIVAT center

201412.19Opening of the Beijing LIVAT CentreFirst LIVAT Centre in North China

200510.12Opening of the IKEA Guangzhou Store Known as the “IKEA Furniture” store

20084.16Opening of the IKEA Shenzhen StoreIKEA store located in Nanshan District’s “Europe Town”

20105.20Opening of the IKEA Shenyang StoreThe largest IKEA store in Northeast China

20122.10Opening of the IKEA Tianjin StoreThe 10th store marks our store number reaches double-digit!

20143.27Opening of the IKEA Chongqing StoreIKEA has opened stores in all the municipalities in China

20137.17Opening of the IKEA Ningbo StoreIKEA has opened stores in Jiangsu, Zhejiang and Shanghai!

20163.24Opening of the IKEA Chengdu Chenghua StoreIKEA now has two stores in Chengdu

2002IKEA Components China was established

IKEA founder Ingvar Kamprad visited China for the first time

1981Direct purchasing from China begins

2015.11All of IKEA’s suppliers in China completed Full IWAY (IKEA business code of conduct)

20168.28IKEA start pilot operation of its online sohp in Shanghai market. It’s a new start for us.

20171.14Opening of the Wukesong PUP, the first Pick-up and Order point in China’s first-tier city

20171.18Opening of the IKEA Fengxian Distribution Center phase two, providing even better logistics service to more stores

20175.18Opening of the IKEA Nantong StoreIKEA is entering third tier city

20177.6Opening of the IKEA Harbin Storewho among all IKEA stores in China has the closest distance to Almhult, the origin of IKEA

20178.21Opening of the IKEA Jinan StoreShandong here we come!

20166.30Opening of the IKEA Suzhou StoreWe have more than 20 IKEA stores now

20168.25Opening of the IKEA Foshan StoreKnown for being “trendy, beautiful, smart”

20164.8Opening of IKEA Distribution Centre Tianjin, the first IKEA Distribution Centre in Northern China

20165.25Opening of the IKEA Wenzhou Pick-up and Order Point China’s first Pick-up and Order Point is now accessible to consumers in Wenzhou

20158.27Opening of the IKEA Xi’an StoreA press conference was held on the ancient city wall of Xi’an

20154.30Opening of the Wuhan LIVAT CenterFirst LIVAT Centre in Central China

201311.7Opening of IKEA Beijing Xihongmen Store, becoming a hot spot in Southern Beijing

20138.28Opening of IKEA Industry Nantong Factory, the manufacturer of IKEA BESTÅ frame and KALLAX shelving unit

20138.15Opening of the IKEA Shanghai Baoshan StoreThe store has a beautiful coffee shop at the self-serve area

20126.6Opening of the IKEA Wuxi StoreThe first store to be connected to the LIVAT Centre

20116.23Opening of the IKEA Shanghai Beicai StoreBeginning of multiple stores in one city model

20101.1Opening of the IKEA China Test Lab and Training Center, the second IKEA self-owned test lab and training centre in the world

20092.19Opening of the IKEA Dalian StoreThe first IKEA store in Northeast China

20091.1Opening of the IKEA China Customer Support Centre400-800-2345, please call the IKEA China Contact Center!

20088.28Opening of the IKEA Nanjing StoreThe store once hosted a Swedish-style wedding

200611.16Opening of the IKEA Industry Dalian FactoryThe manufacturer of IKEA POÄNG armchair

20059.1Opening of the first IKEA Distribution Centre in China, IKEA Distribution Centre Songjiang

2004The IWAY team was established in China, responsible for the audit of suppliers

2003.4IKEA Xuhui store moved to its current location

19981.22Opening of the IKEA Shanghai Xuhui StoreThe first IKEA store was established in mainland China

20149.17Opening of the IKEA Wuhan StoreFirst IKEA Store in Central China

9 10 11 12

IKEA in China2017 Financial Year Key Indicators*

Under the IKEA brand, IKEA Group and the Inter IKEA Group operate different business units in China and each perform their respective duties, all for the common vision of creating a better everyday life for the many people.

IKEA China HoldingIKEA Centres ChinaIKEA Retail ChinaIKEA Distribution Service Asia PacificIKEA Indirect Material and Services IKEA Shared Service Center (SSC)IKEA China Business SolutionsIKEA China Customer Support Centre

IKEA Shanghai Xuhui Store, IKEA Guangzhou Store, IKEA Beijing Siyuanqiao Store, IKEA Chengdu Gaoxin Store, IKEA Shenzhen Store, IKEA Nanjing Store, IKEA Dalian Store, IKEA Shenyang Store, IKEA Shanghai Beicai Store, IKEA Tianjin Store, IKEA Wuxi Store, IKEA Ningbo Store, IKEA Shanghai Baoshan Store, IKEA Beijing Xihongmen Store, IKEA Chongqing Store, IKEA Wuhan Store, IKEA Hangzhou Store, IKEA Xi’an Store, IKEA Chengdu Chenghua Store, IKEA Wenzhou Pick-up and Order Point, IKEA Suzhou Store, IKEA Foshan Store, IKEA Wukesong Pick-up and Order Point, IKEA Nantong Store, IKEA Harbin Store, IKEA Jinan Store

IKEA Wuxi LIVAT Centre, IKEA Beijing LIVAT Centre, IKEA Wuhan LIVAT Centre

IKEA Group

IKEA Product Development Centre Asia PacificIKEA Free Range Center East AsiaIKEA Supply ChinaIKEA Purchasing & Logistics East AsiaIKEA Components ChinaIKEA Distribution Network Design

IKEA Regional Supply Team Asia PacificIKEA Transport and Logistics Services Asia PacificIKEA Industry Dalian FactoryIKEA Industry Nantong FactoryIKEA China Test Lab and Training CenterIKEA Shanghai Learning Center

Inter IKEA Group

IKEA Group Inter IKEA Group

StoreNumber

of Product Suppliers

Pick-up and Order

Point

LIVAT Centre

23

24

293

Number of Co-worker

More than 11,000

Number of Co-worker

More than 2,100

Shopping CenterTenant Sales:

8 billion RMB

IKEAFAMILY Members:

19 million

Social Media Platform Follower **:

9.4 million

LIVAT Centre Visitor:

59 million

Global Purchasing Value Share:

27%

Store Sales: Store Visitor:

14.3 billion RMB 97.6

million

* 2017 financial year runs from September 1, 2016 to August 31, 2017

** Social media platforms include IKEA Weibo account, IKEA WeChat Subscription Account, and IKEA FAMILY WeChat Service Account

1 2

In 1943, Ingvar Kamprad from Sweden founded IKEA, with the vision “to create a better everyday life for the many people”. The business idea of IKEA is to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them. IKEA offers unique home products, inspirations, and solutions to meet the home furnishing needs and dreams for the many people.

Expert in Life at Home

Expert in Life at Home

3 4

Democratic Design Philosophy

We feel that good design combines form, function, quality, sustainability at a low price. We call it “Democratic Design” because we believe good home furnishing product is for everyone.

Everything that IKEA does begins with understanding people’s life at home. Every year, we visit homes all around the world to find out people’s needs and dreams for life at home. We then pair their needs with the abilities of our suppliers to create new solutions that will make everyday life a little better for the people.

For example, the development of the IKEA MÅLA felt-tip pen. We have taken into consideration factors such as when using the felt-tip pen, children might place the pen in their mouth, they may strike the pen hard against the board, and they might like to draw anyplace anytime. Therefore we have chosen non-toxic and more durable materials, with easy-to-clean dyes. IKEA held full communication with its suppliers during the design phase and conducted a large amount of customer research, culminating in the revision of several versions before finally achieving this little felt-tip pen.

In 2011, IKEA set up the IKEA Product Development Center Asia Pacific to better understand the home furnishing needs of consumers in China and in other countries of the Asia Pacific region. IKEA Product Development Center works with local suppliers to develop home furnishing products that meet their needs.

For the Many People

IKEA’s business idea can be seen throughout the design, purchasing, packaging, distribution, retail and other links. By improving product design, optimizing production processes and materials, IKEA is committed to creating lower product prices and helping more people to afford our products.

Provide Home Furnishing Inspirations, Create a Better Everyday Life

IKEA shares life at home research findings, knowledge, inspiration and solutions through various channels including the IKEA stores, websites, “IKEA Catalogue”, mobile apps, social media platforms, and offline activities, in order to raise public awareness and interest in life at home and to help the public create a better everyday life.

IKEA product price comparison 20 years ago vs. today

Product Prices from 20 Years Ago

Current Product Retail Price

KLIPPAN sofa

ANEBODA wardrobe

BILLY bookcase

HELMER chest of drawers

LACK side table

HATTEN side table

FROSTA chair

KLIPPAN sofa

ANEBODA wardrobe

BILLY bookshelves

HELMER chest of drawers

LACK side table

HATTEN side table

FROSTA chair

￥2,999

￥1,495

￥898

￥898

￥299

￥295

￥125

￥999

￥549

￥399

￥199

￥39

￥99

￥49

Expert in Life at Home Expert in Life at Home

5 6

Diaodiao and Laohu’s Home

Laohu and Diaodiao is a young couple born in the 1980s, they come from Shijiazhuang and Dalian respectively. Due to their fondness of IKEA, the two of them joined IKEA as designers four years ago. They rented an 80 m2 apartment in Shanghai and through creativity and ingenuity, they have transformed the nondescript apartment into an art and culture inspired “secondhand treasure shop”.

Their home is filled with secondhand items they have found in local and overseas secondhand shops, as well as gifts from friends. Each object has its own story and they bear the marks of time and emotions. The couple has carefully created a unique storage and display space for these objects. “If we buy an item, we will find a place for it as we see fit,” said them.

When the couple has free time, they also enjoy doing handcrafts, so their home space layout has also been planned according to their hobbies, each has their own space to do their own things and fully enjoy the pleasures of handcraft.

In addition to looking for secondhand goods and doing handcraft, they also look after 2 cats, 1 dog, and 2 tortoises. They have a very fulfilling life at home. “The best thing after work is to go home, after all, home is so wonderful so we never really want to go out,” said Diaodiao.

The couple enjoys doing continuous improvement for their home. They have painted one wall of the living room a new color and changed the original sofa to a two-person love seat with cushions. They have also placed various ornaments and hanging decorations to serve as room decor. These small changes have filled their home with personality and distinct atmosphere.

“We don’t have a reason for liking IKEA, we just do, but there is no doubt that IKEA has made us love our home even more. It has given us endless inspiration for our passion for life, our perfectionist nature, and our energy to mix and match. If there were no IKEA, our home will probably not be like this now,” said Laohu and Diaodiao.

* This article is adapted from the WeChat article “Two People, Two Cats, One Dog | 80m2 Rental Apartment ’Secondhand Treasure Shop’” on IKEA FAMILY WeChat Service Account.

Expert in Life at Home Expert in Life at Home

7 8

“In these twenty years, from being inexperienced to becoming mature, from being carefree and worry-free to learning how to bury pain deep within my heart. At the celebration banquet, you kept me company quietly, reminding me not to forget to spend time with my family and care for myself while I strive for accomplishments. On a sorrowful rainy night, you kept me company quietly and comforted me, the warm candle light understood the pain in my heart. Perhaps it was only a cup, a lamp, a pillow, or a blanket, but they used their own particular warmth to tell me: ‘Don’t be afraid, I am still here, keeping you company...’ Thank you IKEA! In the past twenty years, you have brought warmth to the countless hearts in this city.”

“Twenty years ago, I wrote down some words: ‘Plan the travel itinerary, get a new cushion, get a new painting, do some baking, make a cup of hot tea on rainy nights. Happiness is based on your own perception, there are actually many sources to happiness.’ Today, I have accomplished everything on the list, in each, the shadow of IKEA can be seen. From buying home furnishing products to spending time at the IKEA restaurant when I have some free time, with the passage of time, it has become a habit. Now if there are no plans for the weekend, I will ask my son: ‘Where should we go?’ My son always replies: ‘Let’s go to IKEA Store!’ The change has happened a long time ago and it will continue to move forward.”

“Twenty years ago, you came to China to serve consumers here. Sixteen years ago on a bright day after the rain, you and I met. The natural, warm, elegant, and passionate you made me see a hundred different types of the perfect life, my life became more beautiful because of you. I want to smile with you, I want to play with you, I want to hold you tight in my arms, I want to grow old with you peacefully as time passes, having met you, I met a better me. ‘Daddy, Daddy, I want to go to IKEA!’”

“The day I met you, it was drizzling in Beijing, I was waiting at Madian for the bus to go home. I passed by you and discovered you, this was the first time that you gave a junior high school student a shopping environment that was as warm as home. I fell in love with you when I became a wife, I filled an IKEA’s glass bottle with multicolored sand, where you served as a witness to my love. I followed you when I was lucky enough to go on a trip to explore Sweden, I learned about the origin, history and culture of IKEA. Once again, I saw with my own eyes your unwavering dedication and caring designs. From a shy student to an experienced mother, the price of the 1 RMB IKEA ice cream has remained unchanged, what has changed is that I’ve learned to use home products to make my lifestyle even more exciting. I will follow you all the way, just like this... forever and ever!”

“IKEA, the first time I met you, I was 18 years old. Throughout the years, I have been influenced by you imperceptibly. Home life did not simply mean the wallpaper on the wall and the sofa in the living room, you provided us with so many impressions of a comfortable home. It could be that lamp on the desk, or the delicate fruit platter on the coffee table, you gave even more meaning to warmth for home. With you accompanying me these past ten years or so, my home has been filled with more and more small items both exquisite and functional. There is no more need for me to visit furniture markets, my wallet also no longer needs to starve to make ends meet. With all the different storage solutions, I have become an expert in life at home! It’s wonderful to have you in my life, thank you IKEA!”

“The first IKEA product I bought was the RÅSKOG utility cart. Back then I was pregnant and had just moved to a new city, this was the first piece of furniture I bought for my rental apartment. My husband was in another city, so I slowly assembled the cart on my own. Piece by piece I assembled our future life, I was full of anticipation for our little nest. This utility cart was placed in the kitchen, at first, it held the grains and fruits I ate during my pregnancy, now it is full of the food material for my baby. When she is older, we will move into our own home. I will use the utility cart as a movable rack for stationery. I like the IKEA philosophy. Thank you IKEA for bringing more possibilities for my home!”

Qin Zhi

“The BILLY bookcase was the first piece of IKEA furniture we bought when we bought our first house - oh, I should say it was actually the first to fourth piece of furniture, because I bought an entire wall of bookcases in one go. Before our bed was even properly set up, our collection of more than 600 beloved books already had a home. Imperceptibly, the BILLY bookcases has accompanied us for 5 years. Now I visit IKEA at least once a month, in less than three years, my small home has been filled with traces of IKEA, from the bathroom, kitchen, bedroom, study, to the living room. Small items include ornaments, light bulbs, power adapters, flower pots, plants, hooks, and table napkin; large items include racks, shoe cabinet, and chest of drawers, IKEA has integrated itself in our life.”

Sesame Apple

“It has already been 13 years since I joined IKEA Retail. My little home is just over 100 square meters, from the couple’s love nest in the beginning, now three generations share the same roof, it has continued to change along with the changes in my life. The greatest need at my home is storage space, the large amount of items owned by our current family of six need to be stored according to their categories. Storage is actually an art, apart from independent storage room, I have also spent quite a bit of time working out the spaces according to functions based on the different activities and needs of the elderly and the children. I have removed the originally less utilized space and turned it into a multipurpose space which the family can enjoy together. There isn’t a ‘best’ home, only the more suitable one! Throughout these years, I understand the IKEA vision of ‘to create a better everyday life for the many people’ more and more and how it is intimately tied to the people’s lifestyle, it truly touches our hearts and make dreams come true. The people includes me and you, a better everyday life starts from you.”

Anita HuangCommunication and Interior Design ManagerIKEA Beicai Store

“From 2007 to now, IKEA has undergone changes, when I flip through the ‘IKEA Catalogue’ from the last decade, I really felt a sense of pride as if my child has finally grown up. I don’t know if IKEA has followed the aesthetics of the era, or if it had instead created the sense of home aesthetics for the eras. Or perhaps we ourselves and IKEA have created each other together. What I saw in the IKEA Catalogues was not only IKEA’s history of evolution, it was probably also an evolution of our understanding of home life.”

Song BingFounder of Pineapple Zebra Home Living Guide

Yu QingIKEA FAMILY 10-Year FAMILY Member

Sun YanIKEA FAMILY 10-Year FAMILY Member

Hu YangIKEA FAMILY 10-Year FAMILY Member

Han YingIKEA FAMILY 10-Year FAMILY Member

Cui YueqiangIKEA FAMILY 10-Year FAMILY Member

Expert in Life at Home

9 10

At IKEA, we believe in every single co-worker. Everyday, each of our co-workers brings their unique ideas and talent to work – they are what makes IKEA great. We advocate a diverse and inclusive work environment. Everyone’s voice and ideas deserve to be heard, and their potential can be explored at work. We believe that as our co-workers grow, IKEA grows too.

Growing Together with Our Co-workers

Growing Together with Our Co-workers

11 12

Culture and Values

IKEA co-workers are a diverse group of down-to-earth, straightforward people with a passion for life at home. Everyone comes from different places and has different backgrounds, but all share the common vision of creating a better everyday life for the many people.

The culture and values of IKEA is found in every aspect of our business, it also forms a part of IKEA’s foundation of inclusive, open and honest culture. It’s all based on a spirit of togetherness and enthusiasm. We work hard and enjoy doing it.

Career Development

At IKEA, we provide our co-workers with the space to fully develop their talents. In this diverse atmosphere, we are happy to discover and embrace the strengths of every single person. We have a distinctive perspective on talent and a unique career plan. We believe that the co-workers take lead in their own development, they can design their own career paths according to their own development planning and future goals. In this environment, employees can grow to be the best version of themselves. We believe that as our co-workers grow, IKEA grows too. Workplace & Benefits

At IKEA, we together aim to create a diverse and inclusive work environment, we respect each other and our differences. Here, co-workers can always be themselves. At the same time, IKEA also provides co-workers with performance-related bonuses, pension benefits, and learning and development opportunities.

Over the years, IKEA has been awarded the titles of Best Employer and Model Business by external agencies.

Growing Together with Our Co-workersGrowing Together with Our Co-workers

13 14

Sweden - China - Sweden- Singapore - Italy, A Smooth and Inspiring Journey

Thirteen years ago, I moved from Sweden to China and joined IKEA Purchasing. After that, I followed the development of the supply chain and joined the IKEA Distribution Service Asia Pacific. Five years ago, I was transferred to IKEA of Sweden, getting to know the whole process of product design and development, manufacturing and distribution in Småland. After that, I embarked on new adventure with IKEA stores in Singapore and Italy to experience the passion of IKEA Retail. New roles always bring about new experiences. In retrospect, it has always been an inspiring journey.

Li Jing Store Manager,IKEA Italy Catania Store

The Lucky Du Lala Exempt from Office Politics

From an intern to the HR manager, I’m the living proof of Du Lala. Yet in my story, all I have are support after I’ve made mistakes, and sharing from co-workers at times of bewilderment. Such growth is both pleasant and motivating, which I will definitely pass forward.

Huo JingHR ManagerIKEA Baoshan Store

A Fast Track for Leadership

I’ve learned to know and embrace myself through my training and practice in IKEA. Introspection and self-knowledge make me a better leader. At 30, I became the first female store manager in China. Now I am the Country Manager of IKEA Retail China. I’m facing new challenges and opportunities every day. Every improvement of leadership gives me a great sense of achievement.

Zhu Changlai Country Manager, IKEA Retail China

Passion Follows me in every Position for 35 Years

Over the past 35 years in IKEA, I’ve been a designer, a sales person and a manager. Everyday, I’m learning, growing, being challenged and practicing. Now sitting on the cusp of middle age, I’m still passionate about what I do.

Hu Yucai Store Manager, IKEA Xuhui Store

Climbing Upwards in Pursuit of Dreams

I began to work in IKEA right after graduating from high school. From the forklift driver to warehouse manager, then to overseas purchasing, I’ve come a long way. BESTÅ cabinet is my favorite IKEA product and only it can store all of my good memories here.

Ma Fengqiang Process Development, IKEA Components

I Want to be a Store Manager in the Future

As someone born in the 1990s, when I joined IKEA three years ago, I had no background in home furnishing retail industry. Now three years later, I have become a professional kitchen and dining room furniture shopkeeper who leads a team to help clients meet their home furnishing needs and dreams. IKEA has helped me to feel more passionate about life and believe even more that in the future I will have unlimited possibilities. It not only gives me an income, but also has created better future opportunities for me, for others, and for the world. My goal is to join the store management group within a year and become a store manager within five years. I will work hard to achieve this goal!

Tan Xiaofei Shopkeeper, IKEA Baoshan Store

A Walking Catalogue in 7 Years

I’m the walking and talking IKEA catalogue. After 7 years in the organic chemical testing department, I’ve learned everything from structure to performance of every product. I’ve never felt bored after 7 years in the same position. There is always something interesting waiting to be explored.

Wu Bing Test Leader of Organic Chemical Lab, IKEA China Test Lab and Training Centre

10 Years, from IKEA Fan to IKEA co-worker, from the Back to the Frontline

In 2008, as a fan of IKEA, I joined the IKEA Fengxian distribution center as a planner. In 2012, due to my personal interest and business needs, I joined the operations department and became a team leader of front line operation function. In these 6 years, my team and I have grown together, there were conflicts, challenges, and tears, but there was more joy, touching memoments and sense of accomplishment. During these 10 years, I witnessed the development of IKEA retail and logistics, IKEA also witnessed my development and improvement at work and in life. I am proud of IKEA, I am even more proud that I am a part of IKEA.

Liu Di Team Leader, Operation IKEA Fengxian Distribution Center

From a Rookie to Master of Space Transformation in 20 Years

Innovation is deeply ingrained in IKEA’s DNA. I’ve never enjoyed “changing” so much even after 20 years in IKEA. It gives me a great sense of satisfaction to be able to accurately perceive the size, the space and organize the working area. I will spare no effort to transform the space with IKEA solutions whenever there is a need.

Hu Huijing IKEA Business Manager,IKEA Beicai Store

“In 2007, I participated my first Store Front Week at IKEA Siyuanqiao Store in Beijing, working together with store co-workers. Working in the field of Purchasing in IKEA, I felt deeply the enthusiasm of customers and their love of IKEA products. This experience has made a deep impression on me. It has enabled me to dedicate myself to the improvement and upgrade of IKEA products for the next ten years, in order to create a better everyday life for the many people!”

Sandra XiuIKEA Purchasing & Logistics East Asia

“In October 2013, I joined the IKEA Customer Support Center, from then on I have viewed this business that focuses on home as my own ‘home’. In this ‘family’, we see each other as ‘family members’, we help and support each other.”

Xining ZhaoIKEA Customer Support Center

“In 2012, I participated in the IKEA Backpack Training Program. It was the first time in my life that I had left Shanghai and lived abroad, over the next 2 years I experienced working in various IKEA business units around the world. I never felt lonely overseas because all the IKEA co-workers around the globe offer the same kind of warmth and care.”

Yang FanIKEA Retail China Service Office

“In December 2016, I supported the first recruitment fair after joining IKEA. I worked hard with my co-workers in the Communication and Interior Design function to set up the venue, assemble our own furniture in person, and adjust the seat position. It was because we cherish every future partner, we cherish our first appearance in front of them! Welcome to IKEA! We are always on the way!”

Mika WangIKEA Nantong Store

Growing Together with Our Co-workers Growing Together with Our Co-workers

15 16

Suppliers are IKEA’s important strategic partners. IKEA would like to share its values and business models with its suppliers and grow together with its suppliers. Through the cooperation, IKEA will acquire more optimized solutions and inspiration, to save customers time and money. And suppliers will also be better informed about life at home and customer needs, access new technologies, and develop their own business.

Growing Together with Our Suppliers

Growing Together with Our Suppliers

17 18

Strategic Partners

Since entering China in 1990 to today, over 28 years have passed for IKEA Purchasing and Logistics and it has achieved impressive results. IKEA is currently a strategic partner with more than 290 suppliers in China and its entire industry chain provides nearly one million jobs in China, with an average of 11 years of cooperation between each supplier

and IKEA. For the 2017 financial year, China accounts for 27% of total IKEA global purchasing share.

In the process of cooperation with suppliers, IKEA helps suppliers to learn about life at home and customer needs, engage them in the reference of new technologies and industries, and help to provide suppliers with innovative solutions for

the products or production. Furthermore, IKEA has established a communication and exchange platform for suppliers to promote communication between suppliers, as well as between suppliers and universities, colleges, research institutes and trade associations.

Look towards the Future

Since entering China, IKEA has always cooperated with the Chinese government and actively supported the national development strategies, contributing to China’s economic and social development.

In 2015, the Chinese government announced the “Made in China 2025” plan. IKEA has responded positively and formulated a series of action plans according to its own circumstances for green manufacturing, renewable resources, and technology and industrial upgrading. IKEA will encourage its suppliers to move from traditional manufacturing to high-quality manufacturing, and ultimately to smart manufacturing, for the implementation of innovation and transformation. Through its own capabilities and planning, IKEA will make its own contribution to the transformation of “Made in China - Quality in China - Intelligent Manufacturing in China”.

Growing Together with Our SuppliersGrowing Together with Our Suppliers

19 20

Yuyue Home Textile: from a Common Manufacturerto IKEA Global Supplier

Yuyue Home Textile Co., Ltd. (hereafter referred to as “Yuyue”) located in Binzhou, Shandong Province, is a classical example of suppliers that has thrived through cooperation with IKEA. This is only a business with a dozen of years of history, but it has grown from an ordinary production-oriented company and developed into a modernized textile enterprise that owns the complete industry chain including the R&D and design of popular textiles, the purchase and processing of cotton, spinning, weaving, dyeing and finishing, sewing of products, brand sales, as well as self-operated import and export trade. Every year, it provides green home textile products to billions of consumers in Europe, the Americas, Africa and Asia.

At the beginning of the partnership between the two parties, in light of Yuyue’s weakness in business operation and development, IKEA utilized its own resources to organize leadership workshops and conducted various projects to enhance the capabilities of Yuyue’s corporate personnel. In the early years, IKEA has engaged itself with full

communication with Yuyue’s management level, confirmed projects and topics, shared relevant case studies and tools to middle and senior management level, including IKEA’s sophisticated internal management model, as well as the introduction and use of new tools. Through the training and cooperation between the two parties, it took only about a year or so for the standard of Yuyue to be greatly enhanced. Yuyue has now become a model of IKEA global suppliers, IKEA also organizes for similar suppliers around the world to visit and learn from Yuyue, and participate in exchange with regards to each other’s development direction. Quite a number of suppliers have commented jokingly: “The relationship between them is no longer ’rival’, but actually ’teammate’.”

Growing Together with Our SuppliersGrowing Together with Our Suppliers

21 22

At IKEA, we hope to have a positive impact on mankind and the planet. Sustainability means starting out with long-term interests, protecting the environment, cherishing resources, and ensuring positive development. With IKEA’s sustainability strategy “People & Planet Positive”, we have integrated sustainability into all aspects of our business and strive to work with all parties to create a more sustainable future.

Sustainability

Sustainability

23 24

People & Planet Positive IKEA Sustainability Strategy “People & Planet Positive” Change Drivers:

1. Inspire and enable customers to live a more sustainable life.2. Strive for resource and energy independence.3. Take a lead in creating a better life for the people and communities impacted by our business.

Sustainable Development Goals

The UN Sustainable Development Goals (SDG) released in December 2015 has laid out the business strategic direction for IKEA, to help us build a sustainable future.

IKEA supports these goals, at the same time, through our own efforts, we promote the realization of these goals which will have a positive impact on mankind and the earth.

United Nations Sustainable Development Goals

More Sustainable Life at Home IKEA provides affordable, well-designed and functional sustainable products and solutions to inspire Chinese consumers to save energy and water, reduce waste and adopt healthy lifestyles, enabling them to live a more sustainable life at home and reduce their impact on the environment.

More Sustainable Life at Home Products

IKEA offers over 400 sustainable products and solutions in China that cover every aspect of the consumer’s lifestyle, to help them to live a more sustainable life at home. For example, hanging flower potsand flower stands for the balcony, textiles for the bedroom, height-adjustable desks for the office, faucets for the kitchen, lighting, waste sorting bins, containers for food storage, bicycles and recycled shopping bags for travel. RYET LED bulb consumes 85% less energy than incandescent bulbs and has a life span of up to 20 years.

Compared with glass or ceramic stove tops, TILLREDA portable induction hob has a 60% faster heating speed, saving up to 40% energy.

IKEA kitchen and bathroom faucets save more than 30% of water compared with normal faucets.

Inspiring a More Sustainable Life at Home

Starting from 2014, IKEA has been involved in the Sustainable Consumption Week co-organized by several environmental organizations for three consecutive years, inspiring and guiding consumers to enjoy a more sustainable and healthier life. In addition, IKEA has also set up sustainable living show rooms at stores to inspire consumers to live more sustainably. IKEA also actively cooperates with external agencies to promote and popularize the concept of sustainability to more people.

Sustainability

No poverty

Economically viable clean energy

Climate initiatives

Underwater animals

Terrestrial animals

Peace, justice and strong institutions

Partnerships that promote the achievement of goals

Good quality work and economic growth

Industry, innovation and infrastructure

Reduce inequality

Sustainable cities and communities

Responsible consumption and production

Zero hunger Outstanding health and welfare

High quality education

Gender equality Clean water and sanitation facilities

Sustainability

25 26

IKEA always strives to make more from less. We’re also busy turning waste into resources, sourcing food and materials in a responsible way and protecting natural resources. And because we want to become energy independent, we’re making the switch to renewable energy.

Circular IKEA

IKEA wants to have a positive impact on people and the planet. Therefore, we have introduced the concept of “Circular IKEA”, where resources can be used more efficiently through recycling. We intend to implement Circular IKEA in areas including product design, production and transport, and customer support.

Product design The TOMAT spray bottle contains 10% raw materials made from packaging waste gathered from IKEA stores.

The ODGER chair is made of wood plastic composite, and contains 30% renewable wood and at least 55% recycled plastic.

The KUNGSBACKA kitchen door is the first kitchen door in the IKEA range made from both recycled wood and recycled plastic. The front is made of recycled wood and covered with plastic foil derived from recycled PET bottles. As a result, we can produce more sustainably and be better at using the earth’s resources wisely.

Being made from sugarcanes, the bioplastic in ISTAD plastic bag is both renewable and recyclable.

Customer support Recycling and reuse are both the end of a cycle and the beginning of a new cycle. IKEA offers a mattress take-back service in China, and has introduced a sofa take-back service in FY18. We will continue to explore take-back services for other products.

Responsible sourcing

Wood We are against illegal logging and promote responsible timber trade. In 2002, IKEA started working with World Wildlife Fund (WWF) to support sustainable forest management to ensure the wood and paper we source came from more sustainable sources.

Cotton Starting on September 1, 2015, all of the cotton used in IKEA products comes from more sustainable sources. This means that the cotton is either recycled, or grown with less water, chemical fertilizer and pesticide, while increasing profit margins for farmers. Along with WWF and others, we helped set up the Better Cotton Initiative (BCI), which aims to make global cotton production better for the people who produce it, better for the environment it grows in and better for the sector’s future by developing Better Cotton as a sustainable mainstream commodity.

Other raw materialsRaw materials, such as leather, down and feathers and palm oil used in IKEA products come from more sustainable sources. Foods on sale at IKEA, such as coffee and seafood products, are also certified.

More sustainable operations

IKEA is always looking for ways to reduce energy consumption in its own business activities in order to ensure a more sustainable operation.

Renewable energyUrgent action is needed to tackle climate change. This is why the IKEA Group is committed to producing as much renewable energy as it consumes in its operations by 2020. In FY16, IKEA Industry Nantong Factory generated 3.5 million kWh of electricity on photovoltaic solar panels, thereby reducing carbon emission by 3,600 tons. 11 IKEA stores generate a total of 3 million kWh a year on photovoltaic solar panels, thereby reducing carbon emission by 3,000 tons.

Green buildingsIKEA wishes to operate the IKEA buildings as efficiently as possible in order to reduce carbon emission. At present, IKEA Jinan Store is the first store to be rated Excellent by BREEAM*. In the future, all new IKEA stores and LIVAT Centres to be opened in China will be certified green buildings.

Product transportIKEA tries to make product transport more efficient in order to reduce costs, travel time and the impact on the environment as much as possible. In 2016, IKEA Transport China was named a “China Green Shipper” by China Road Transportation Association in recognition of its contribution to and progress in green transportation.

* BREEAM is short for Building Research Establishment Environmental Assessment Method. It is the most widely used green building assessment method in the world.

Energy and Resource Independence

Sustainability Sustainability

27 28

Supporting IKEA Foundation

Children should have the right to grow up in secure households with stable income and enjoy health and quality education. IKEA Foundation creates substantial and lasting change by funding holistic, long-term programmes in some of the world’s poorest communities that address children’s fundamental needs.

As part of the IKEA Good Cause campaign, IKEA Foundation through its partners supports children’s educational projects in some of the world’s poorest communities and refugee support projects. For years, IKEA stores in China have been playing an active role in supporting the IKEA Good Cause campaign.

2003-2015 “Soft Toys for Education”IKEA Foundation donated €88 million to Save the Children and UNICEF during the Soft Toys for Education campaign. The donations were used to support education for children projects. In particular, €7.7 million were spent on supporting education for children projects in China.

2014-2015 “Brighter Lives For Refugees”The Brighter Lives for Refugees campaign generated €30.8 million in donations from IKEA Foundation to UNHCR, the UN refugee agency, to provide light, renewable energy and education for refugee families living in camps in Asia, Africa and the Middle East.

2016-2017 “Let’s play for change”IKEA Foundation has committed to donate €45 million to its partners to support children’s play and development projects.

A Better Life for the People and Communities

We want to create a better life for the people and communities impacted by our business, which include our co-workers, suppliers, and children and families living in some of the world’s most vulnerable communities.

Better lives for workers in our supply chain

In 2000, the IKEA business code of conduct, IWAY was launched. IWAY is a pre-condition for suppliers who wish to do business with IKEA. It sets the minimum requirements for suppliers while working with IKEA, and covers environment and social and working conditions. IWAY ensures that suppliers comply with laws and regulations in working conditions, social responsibilities, environmental conservation and employee benefits. A complete social responsibility management system and a corresponding set of guidelines will contribute to business stability and growth for suppliers.

In 2004, IKEA created a full-time IWAY team to handle supplier assessments.

Every year, the IWAY team performs a full assessment of every supplier. Meanwhile, we work with our suppliers in developing projects to keep improving the quality and capability of IWAY management. IKEA also supports suppliers who conduct training and assessments of their main downstream suppliers in order to ensure the sub-suppliers comply with IWAY MUST. Furthermore, in addition to home furnishing supplier assessments, we perform assessments on components suppliers, transport suppliers and other IKEA suppliers in order to ensure that all suppliers provide working conditions in compliance with the environmental and social requirements.

In 2016, IKEA launched the I Care project, where we worked with IKEA suppliers to provide family dormitories for migrant workers and help their children enter local schools. An after school activity center was created under the project. The project makes it easier for migrant workers to bring their children to live with them, thereby keeping families together. The IKEA project so far has helped more than a hundred migrant families come together. IKEA will

support more suppliers to join the project each year so as to bring more children together with their parents.

A positive impact on the community

IKEA stores and business units work hard to provide support for the community. We work with organizations, customers and co-workers in creating a positive impact on the community.

In 2016, IKEA launched the I Care project, where we worked with different parties to open I Centers at community in places with a large number of migrant children. These centers provides a safe place for children to learn and play after school and help them grow up happily and integrated into the society. IKEA so far has opened I Centers in local communities in Shanghai, Tianjin and Chengdu. We will continue to build more I Centers in communities across more cities in the future so more children can benefit from the project.

Sustainability Sustainability

29

Wise use of wood resources to protect forests

China plays a key role in the global forest products market not only as a major manufacturer, but also as a large consumer. The World Wildlife Fund (WWF) and IKEA share the same goal in China, which is to promote responsible forest management and create a healthy ecosystem.

IKEA and WWF have formed a partnership in China to combat illegal logging and support sustainable forest management certification in order to facilitate responsible wood trade, identify and protect forests that are particularly important, and promote responsible forest management. In 2002, IKEA and WWF started identifying high conservation value forests in the Northeast China and Inner Mongolia. The partnership also supports development of sustainable forest management certification in the region.

Illegal logging and wood trade represent an important global issue. It is one of the key

missions of the IKEA and WWF partnership to support sustainable wood production and trade. In 2008, WWF and IKEA teamed up and released the handbook, Keep It Legal, to provide an important guide to preventing products of illegal logging from entering the supply chain of forest products. The partners also supported and hosted a number of successful seminars and other events, contributing to responsible wood trade among Chinese business including IKEA suppliers.

The project supported and initiated a series of campaigns and promotional activities aimed to raise awareness of forest management and illegal logging. In 2015, as part of the Sustainable Consumption Week, WWF teamed up with 17 IKEA stores to raise awareness of sustainable forests and encourage consumers to buy certified sustainable wood products. The campaign reached hundreds of thousands of households.

In 2013, more than 3 million hectares of forests had sustainable forest management

certification in the country, 85% of which had benefited from the partnership between IKEA and WWF. At present, projects supported by the partnership are going strong in northern and southern China. In 2016 and 2017, the partnership has supported 9 companies in 8 provinces. Such collaboration helped IKEA achieve the goal of having its wood products in China use materials 100% from sustainable sources.

In December 2017, IKEA was given a WWF Forest Partner Award at the WWF Annual Conference, Green Dialogue, where WWF offered recognition and appreciation to IKEA for being a long term strategic partner and actively contributing to WWF sustainable forest management as a long term strategic partner.

IKEA and WWF will continue to promote responsible forest management and protect precious forest resources and what they stand for.

Together we can create a better tomorrow.

One-time investment, permanent benefit

There are many migrant workers in the factories run by IKEA suppliers. To find work, they had to leave their children to the care of other family members and endure extended separation from their loved ones. IKEA takes the view that working with suppliers to bring families together will, from a business point of view, lead to lower employee turnover and better performance for the suppliers. Meanwhile, from a social point of view, it gives children a better

chance at receiving a good education and is the most effective way of eliminating the safety issue involved in leaving children unsupervised by parents. The practice is essentially an extension of IWAY.

With IKEA’s strong support, MYS, an IKEA supplier in Dongguan, Guangdong, started providing family dormitories with independent units for migrant workers working in its factory and after-school center where the workers’ children could learn and play. With this, workers no longer need to worry about their children’s whereabouts after school.

IKEA provided renovation and other technical support as well as home furnishing for the dormitories and the child center. “This is a one time investment with lasting benefits,” said an MYS representative.

At present, IKEA tries to have more suppliers participate in the I Care project so as to bring more families together.

30

Sustainability

31 32

A memorable cafe makeover

Yanglingzi School is the largest special education school in Zhejiang Province. The Wisdom Tree Cafe is a offline coffee and cake shop sponsored by the local education department, the Civil Affair Bureau, and associations of people with disabilities. The cafe recruits Yanglingzi alumni as staff to encourage them to be self sufficient by working in the shop and find happiness. The shop is like a home and safe haven for them. The special little shop is often visited by big-hearted Hangzhou residents.

Following the idea of creating a better life for the people and communities, the IKEA Hangzhou Store sustainability team conducted a comprehensive inspection and chose Yanglingzi School to be the first local school partner for IKEA Hangzhou Store. A memorable cafe makeover was born.

In January 2016, IKEA learned from the school and the students about the challenges in space design, storage, lighting, and color coordination at the Wisdom Tree Cafe.

It then decided to offer free help to the school in redesigning the cafe. In early March, co-workers from the IKEA store were recruited to join the working team, and the design was decided in mid-April. Soon after that, 48 volunteers from different functions at IKEA Hangzhou store completed the physical makeover in just 2 days.

The cafe got a more friendly atmosphere after the makeover. The colors were brighter, and the place on the whole looked more like a cafe. Having tables and chairs that could be paired freely increased the seating capacity to 20 and provided a place for customers to put their bags. There was also an additional shelf where students’ work and products could be displayed. Meanwhile, the message wall in the shop was replaced by an easel to make it easier for customers to leave a comment or wish.

The re-opening was attended by IKEA volunteers and the students. Everyone had cake and a great time at the celebration. This was a makeover full of love and positive energy. It added more fun and

playfulness to the shop, and brought more goodwill and ease into the children’s lives. The experience gave the volunteers from the IKEA Hangzhou Store a strong sense of fulfillment.

One of the colleagues from IKEA Hangzhou Store who participated in the makeover was Yvonne Lou said, “We usually focus on playing our own roles when we work in the store. This makeover, however, brought us all together to contribute our ideas and skills and help turn the cafe into a home for the children. We were very much moved by the smiles on their faces. This makeover meant a lot to the users and to the builders.”

The partnership between IKEA Hangzhou Store and Yanglingzi School continued after this makeover. We organized IKEA Day for IKEA co-workers and Yanglingzi students to enjoy a day of handmade crafts. We tried to sow the seeds of love and goodwill and create a better life for the children and their community.

Sustainability Sustainability

33 34

“For 15 years, we have been working as a team in making China greener. Together we can make things happen!”

Huang Wenbin Director of Forests, WWF-China

“As an IKEA forest expert, I have visited many places where IKEA wood products were sourced in the last decade. I have been to forests in China and in Siberia. I have seen the sun rise over the Greater Khingan Mountains, and I have experienced the beauty of walking through a bamboo forest in the rain. The one thing I am very proud of is working with our co-workers, suppliers, forests/forest farmers and other partners in ensuring our wood come from more sustainable sources. I feel my job is very meaningful.”

Tai Wen IKEA Forestry ManagerIKEA Purchasing & Logistics East Asia

“IWAY allows me to give 100% at work and be free to spend time with my family after work. This is how IWAY has improved my family life.”

Employee of an IKEA supplier in Yantai “During my 20 years with IKEA, I have had the honor of witnessing the development of IWAY in China and see firsthand the progress that we have made and its positive impact. I feel very lucky to be working for a responsible company that pays attention to people and the environment. Meanwhile, I am very proud of the efforts and contributions made by myself and my colleagues to IWAY! The IWAY journey has been full of frustration and emotional moments, but it is very much worth it! Let’s keep up the work!”

Mandy FanSustainability Compliance Manager, Asia Pacific IKEA Group

“As a member of the IKEA I Care project team, I was motivated and worked hard to promote the project. We tried to have more factories and more colleagues join the effort to help bring more migrant families together. I am very proud to have participated in a project like this one!”

Li Yin Sustainability Project LeaderIKEA Purchasing & Logistics East Asia

“I brought IKEA volunteers to visit Puer, Yunan in the autumn of 2013. We went to find out for ourselves how the IKEA Soft Toys for Education campaign was supporting Save the Children’s inclusive education project and helping children with special needs to have a happy childhood and grow up to a productive member of society. With the inclusive project, local children with special needs were able to enjoy school as normal children would. We had lessons together and played together during recess. We gradually learned to accept our differences and enjoy them. What I took away from the field trip was the smiles on

the children’s faces. They were beautiful and full of life. We were different, and yet we were the same. I always get a strong, positive feeling whenever I remember their smiles.”

Shen Yan, Strategic Communication Manager IKEA Retail China

“Hubei was struck by severe floods in the summer of 2016. Many houses were seriously damaged, and a lot of people had to stay at temporary disaster relief points. IKEA Wuhan Store immediately donated

disaster relief supplies worth RMB570,000 on behalf of IKEA China. To ensure the supplies would be delivered promptly to the disaster area, many of our co-workers worked overtime, but we all felt it was something we had to do and a responsibility that we shared. Home is the most important place in the world. We could not join the front line relief efforts, but we were able to unite and send our support to those in need.”

Huang Jinjin, Store Manager IKEA Wuhan store

Sustainability Sustainability

35 36

Progress at IKEA is always accompanied by change. The journey from a grocery store at the beginning to the world’s largest home furnishing retailer has been driven by innovation and change.

The world is constantly changing. The needs of the public that we serve and the business environment are both undergoing dramatic changes. To survive and grow from change and to achieve the vision of creating a better everyday life for the many people, change and innovation will be essential.

Transformation and Innovation

Transformation and Innovation

37 38

Customer-centric Multichannel Retailing

Urbanization and the digital revolution have given birth to a brand new way of shopping. People now wish to have the choice between a real store and online shopping and expect a better shopping experience.

No matter which way customers choose to shop IKEA, IKEA is devoted to offering a accessible, convenient and friendly for our customers. The multichannel retailing model is one of the important strategies IKEA is deploying in China. In addition to opening more stores and exploring different store formats, IKEA is taking an active approach to developing e-commerce, and tries to provide a more accessible way of shopping for consumers across a larger geographic area. Meanwhile, IKEA is investing in building an efficient multichannel distribution network that tries to take products in warehouses closer to

customers so to reduce shipping costs and delivery lead time.

Another key to success is an ongoing effort to provide endless home furnishing ideas that bring a better everyday life within reach.

Creating meeting and experience centers

Meeting places provide a venue for people to communicate, socialize, be inspired, experience new things, shop, and enjoy a meal together. IKEA, by creating great meeting place and experience center, hopes to provide more space where members of the public and their families and friends can exchange ideas and create opportunities that will ultimately lead to an excellent experience and better life for the many customers!

IKEA Centres entered China in 2009 when it started working with IKEA Retail and building meeting and experience centers for the public. IKEA Centres operates under the brand, LIVAT in China. IKEA Centres devotes itself to establishing LIVAT Centres as the leader in meeting and experience centers in China.

At present, IKEA Centres operates three LIVAT Centres in China, which are located in Wuxi, Beijing and Wuhan. There are three confirmed new projects to take place in Changsha, Shanghai and Xi’an. IKEA Centres will open more LIVAT Centres in China in the future so it can provide a better meeting experience for more customers.

Transformation and Innovation Transformation and Innovation

2018 marks the 20th anniversary for IKEA serving consumers in China.

These 20 years belong to IKEA and to every person who has shared the journey.

We are grateful to each and every person we meet!

We are also grateful for a better tomorrow to look forward to!

Most things remain to be done. A glorious future!

Notes:

IKEA fiscal year is defined as the period starting on September 1 and ending on August 31 in the following year.Data sources: IKEA website, publicly disclosed reports, internal interviews, and letters and messages from customers. The complete report is available at www.ikea.cn.

A Better TomorrowWe are Always On the Way