Swedish home furnishings maker IKEA will invest heavily to build 10 new stores over the next six years in China, its fastest-growing market around the world.

Each of the planned stores will cost US$40-80 million, said Ian Duffy, head of IKEA's China operation.

They will be located in Beijing, Shanghai, Guangzhou and Shenzhen in Guangdong Province, Chengdu in Sichuan Province, Nanjing in Jiangsu Province and Qingdao in Shandong Province, Duffy said.

IKEA, which started operation in China in 1998, now has two stores in Beijing and Shanghai.

A new store, to be IKEA's second biggest worldwide, will be opened in Beijing in the second half of next year, he said.

"Although China now accounts for less than 1 percent of IKEA's world business, its growth possibilities are much greater than other markets and it is expected to become our No 1 market within 10 to 15 years," he said.

The company's turnover in China in the 2004 fiscal year ending on August 24 surged by 50 percent to 1 billion yuan (US$120.7 million), the best growth result in IKEA worldwide.

Its global turnover reached 13.2 billion euros (US$16 billion) in the fiscal year, up 15 percent.

Analysts predict the home furnishings market in China has huge growth potential as a result of the nation's booming real estate sector.

Fixed asset investment in the real estate sector rose by 28.7 percent year-on-year to 669.1 billion yuan (US$80.8 billion) in the first seven months of this year.

"Our products will be more and more competitive and affordable for our customers in China," Duffy said.

IKEA will cut the prices of its products by 6 percent on average in China in the fiscal year of 2005 following the 5 percent cut in the previous year, he said.

(China Daily August 30, 2004)