Mar. 9, 2009 (China Knowledge) - Ikea China, a subsidiary of Sweden-based Ikea Group Co Ltd, plans to lower prices as much as 27% in China in a bid to boost its sales.

The Sweden-based home furniture retailer it can afford the price adjustment because increasing procurement in China has lowered its transportation costs.

Ikea was able to increase annual sales revenue 25% in 2008 by slashing prices.

The company said 30% of its products are now manufactured in China and that a large proportion of its raw materials also come from China. The company plans to lower its prices to undercut its competitors in China.

China is Ikea's largest procurement market, accounting for 22% of Ikea's total global procurement. Ikea has over 300 suppliers and over 200 factories in China.