Thursday. 21/3/2019

The Monocle Minute

Opinion / Josh Fehnert

Small shops, big challenge

Ikea successfully exports its ever-so Swedish flat-packed finery around the world but its retail model will need to be flexible to make its latest landgrab a success. The furniture firm already has 427 shops in 52 countries but three new sites slated to open in Mexico present a space-saving challenge (see below). Ikea’s existing model involves lots of walking: customers pass through styled-up salons and pluck products from an adjoining warehouse full to the brim of flat-packed furniture. Therefore its shops are usually found on the outskirts of cities.

To make the most of Mexico City’s metropolitan sprawl, however, Ikea should stay central on a smaller site that’s accessible to more of the 21 million people who live in the city and the surrounding area. Last year’s foray into India shows that the firm can adapt its products, produce and prices to new markets: the Hyderabad outlet does a mean biriyani as well as the mandatory meatballs. But this summer’s Mexican adventure will require a fundamental rethink.

Ikea is also expected to open a city-centre shop in Paris in early May. If the firm cracks urban selling in smaller shops, space-saving might once again be its biggest sell.

Diplomacy / Italy & China

Risky business

Italy’s fractious coalition government will today roll out the red carpet for China’s leader, Xi Jinping. He’s there to discuss the planned expansion of his flagship Belt and Road Initiative, a massive economic project that aims to boost China’s links to the rest of the world. The EU and US are nervous: they fear that a key G7 ally could be falling under the influence of Beijing. But it appears that Italy is not a straightforward investment for President Xi either. Ambassador Chas Freeman, who was Richard Nixon’s interpreter on his landmark visit to China in 1972, told The Monocle Minute, “Italy is a huge financial risk. The last thing that China needs is a problematic borrower and Beijing will be doing due diligence to find out whether it will get its money back.” Perhaps Italy’s desperation – rather than China’s pragmatism – is what’s really driving today’s meeting.

Food / USA

Room for more?

Naysayers have long heralded the death of the mall as shoppers’ preferences have shifted online. Yet there’s one aspect of the mall that does have a future: the food court, in which a glut of restaurant options are all located under one roof. In New York, Chelsea Market and Grand Central’s Great Northern Food Hall revived the trend, which has now come to Hudson Yard and Brooklyn’s Navy Yard and Industry City. Now the suburbs – the place where the food court was first cooked up – want in on the action, with the likes of District Kitchen opening in Jersey City at the start of next week. And there are few signs that customers’ appetites are sated: the number of food courts has tripled in the US in the past four years.

Legal / Japan

Hitting out

Japan’s cabinet this week approved a revision to the child-abuse prevention law banning the physical disciplining of children. Schools are already forbidden from using corporal punishment but the new amendment – which, if passed in this Diet session, would come into force next April – will make it illegal for parents and guardians to strike children. Recent statistics have shown a rise in child abuse in Japan and the ban is one of several legal reforms aimed at safeguarding minors. Although some critics say the changes are toothless without accompanying penalties, others welcome writing into law the principle that it is unacceptable to use violence against children.

Retail / Mexico

Swede spot

Affordable assemble-it-yourself furniture is coming to Mexico, with Ikea announcing that it’s looking at Mexico City, Guadalajara and Monterrey for its first shops in the country. Last year Ikea revealed plans to enter Latin America – beginning with Chile in 2020 – due to an increasingly crowded marketplace in the US and Europe, thanks to the rise of online and direct-to-consumer retailers. Traffic to Ikea’s sprawling suburban stores has stagnated too, prompting the company to look to new destinations and retail models. In October a central London outpost with a more tailored product selection opened, and it’s set to be joined by a Manhattan shop come mid-April. We’ll be curious to see how Ikea navigates the Mexican retail market – especially in Mexico City, where real estate is at a premium.

M24 / The Entrepreneurs

Peanut

Michelle Kennedy is the CEO and founder of Peanut, a rapidly growing app and network for mothers. She was previously deputy CEO of dating platform Badoo and later, along with Tinder co-founder Whitney Wolfe, created dating app Bumble.

Film / Thailand

Wonderfruit: Thailand's blissed-out party

Wonderfruit is a festival like no other; a beacon of peace and calm where hedonism takes a backseat. Time to ditch the city attitude, grab a yoga mat and watch the sun go down in the Thai countryside.

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