IKEA, A.O. Smith and Moen have successively adjusted their operations in China.

Since 2026, IKEA China, A.O. Smith and Fortune Brands, the parent company of Moen, have successively disclosed adjustments to their businesses in China: IKEA announced in January that it would close 7 shopping malls and shift to small-format stores; A.O. Smith transferred 81% controlling stake of its China business at the end of October; Moen confirmed in early November that it would withdraw from local commercial operations in Asia.

The three moves differ in timing, pace and specific sectors they belong to, but all point to the same direction — dismantling the retail "front desk" that directly faces consumers. So why did they make such adjustments? What dismantling methods have they adopted? After the restructuring is completed, what is the new positioning of each enterprise for the Chinese market?

IKEA: Build a multi-touch near-field network to restructure the spatial form of the retail "front desk"

IKEA has embarked on a path of independent adjustment.

The enterprise has successively closed 7 large shopping malls including those in Baoshan (Shanghai) and Panyu (Guangzhou), and simultaneously accelerated the layout of small urban stores covering 1,500 to 4,000 square meters. In the 2026 fiscal year, 4 small stores in Dongguan, Tongzhou (Beijing), Changying and Changping have been opened; in the next two years, more than 10 additional small stores will be opened in Beijing and Shenzhen. The annual passenger flow of small stores is about 7 million person-times, and the proportion of online sales in fiscal year 2026 has risen to 29.7%.

In addition, IKEA has built an omni-channel matrix on the online side, including official flagship stores on Tmall (launched in 2020) and JD.com (launched in August 2025), JD.com instant retail delivery service (pilot in 9 cities in January 2026), official flagship store on Douyin (launched in October 2026), pilot of Taobao flash shopping (launched in July 2026), with its official website and WeChat mini-program providing supporting services at the same time.

IKEA's traditional large-store model, which covers tens of thousands of square meters, is located in the suburbs and provides one-stop shopping, is a typical retail form of "furnishing a home" in the era of new housing. As the renovation of existing housing becomes the mainstream, consumer demand has shifted from full-set procurement to partial renovation and single-product replenishment. The logic of attracting customers through large stores continues to weaken, and the sales per unit area is under pressure.

It can be seen that IKEA's choice is not to withdraw, but to dismantle the single large suburban destination into a multi-touch near-field network. What the enterprise adjusts is the density and form of the "front desk", rather than abandoning the market itself. The Chinese market has been redefined as a "community-based retail test field".

Moen: Retain the function of the supply chain "back office"

The internal letter issued by Moen's parent company Fortune Brands clearly states that it will stop the local commercial operation of the Moen brand in Asia, most of the sales and marketing positions will be eliminated by the end of the second quarter of 2027, and the adjustment of the remaining positions will be basically completed by the end of 2027.

The same internal letter clarifies that a number of businesses will be retained, including the Changshu production and distribution base, the Guangzhou R&D center, and the Asian procurement team, all of which will be retained and transformed to serve the North American market.

As "Home New Paradigm" noticed, Fortune Brands' total revenue in the third quarter of 2026 was 1.1137 billion US dollars, down 3.1% year-on-year, and the decline was 2.4% excluding the Chinese market. This set of data shows that its business is facing growth challenges on a global scale.

In this context, the local retail "front desk" of Moen Asia is judged to no longer have the value of continuous investment, but the "back office" functions such as manufacturing, R&D and procurement still play an important role in the global supply chain. The logic is very clear: factories and supply chains in Asia can serve North America, but local retail business in Asia is difficult to continue to support.

For Moen, the Chinese market has changed from a sales market to a "production back office" of the North American supply chain.

A.O. Smith: Transfer controlling stake and transform the retail "front desk" into an authorized operation model

On October 27, A.O. Smith announced that it would sell 81% of the equity of its China business to CPE Yuanfeng, with a transaction valuation of 400 million US dollars. The overall value including the net present value of brand authorization exceeds 500 million US dollars, and the transaction is expected to be completed in the first half of 2027. After the transaction is completed, the US side will retain 19% of the equity and long-term brand authorization, and the proceeds from the transaction will be prioritized for stock repurchase.

The public financial statement data explains the background of this decision: A.O. Smith's revenue in China in 2025 was about 690 million US dollars, down 12.9% year-on-year, and its proportion in the group's total revenue dropped to 18%; in the third quarter of 2026, local currency sales in the Chinese market continued to decline by 17%.

Under the environment where the direct sales model continues to face pressure, the headquarters has not chosen to continue to increase investment, but transferred the operating rights to a local PE institution, and retreated itself as a brand licensor. The revenue structure has shifted from earning retail profits to collecting licensing fees and dividends. The brand has not been sold, and the market has not been abandoned, but the operating burden brought by direct sales has been lifted.

For A.O. Smith, the Chinese market has thus been reclassified from the "full authority center" of specific categories to a "licensing rent-collecting market".

Foreign-funded enterprises are reclassifying the role positioning of the Chinese market

Combining the three cases for observation, a clear map emerges.

IKEA has built the Chinese market into a "community-based retail test field", Moen has turned the Chinese market into the "production back office" of the North American supply chain, and A.O. Smith has turned the Chinese market into a "licensing rent-collecting market".

The essence of this round of foreign-funded business adjustment in 2026 is not "withdrawal", but dismantling before reconstruction — dismantling the retail "front desk" with heavy assets, unified management and one-time transactions in the old cycle, and then according to their respective global divisions of labor, reconstruct the Chinese market into three roles: brand licensing rent-collecting market, global supply chain production back office, and community-based retail test field.

This round of adjustment sends a signal worthy of the industry's attention: around 2027, the space vacated by foreign-funded large home furnishing enterprises is not just shelves, but all kinds of "certainty" supply positions.

IKEA is shrinking its large stores, and community small stores undertake fragmented and partial renovation consumer demand; Moen will stop local sales at the end of 2027, and there will be a supply gap for maintenance and spare parts in the post-installation market of faucets, angle valves, hoses and other products; after A.O. Smith completes the equity delivery, its original dealer system will face new choices. These vacancies share a common feature: what the market needs is no longer just products with lower prices, but operators that can undertake after-sales services, provide scenario solutions, and fulfill risk underwriting responsibilities.

In 2027, what the market is more likely to lack will not be replica alternative products for foreign brands, but local operators that can undertake after-sales, scenario and underwriting services. The old cycle has come to an end. Enterprises that still follow the idea of "expanding large stores, betting on engineering channels, and waiting for new housing increments" to lay out their business will later have to bear most of the investment that belongs to the continuation cost of the commercial logic of the old era.