IKEA's quick payment plan a boost to suppliers' resumption

Ikea, the Swedish furniture and home furnishing retailer, recently offered a financial plan to greatly shorten payment time for its suppliers and service providers in China in a bid to support local manufacturing capability and supply chains.

In a letter to Chinese suppliers, Henrik Elm, Ikea supply manager, wrote: "China is a strategic sourcing market for Ikea and we strongly believe it will continue to be. In the spirit of true partnership, Ikea wants to support you to secure a smooth production restart, guaranteeing a safe environment for all workers."

"To that end, we will offer payment within 13 calendar days, with no interest deduction, for a period of three months," he said.

Elm said he hopes this action will support affected businesses to come through this situation in the best possible financial health.

Ikea's supply chain in China represents 38 percent of its global productivity in volume. It is critical for Ikea to ensure smooth production in China. From its entry into China 30 years ago, Ikea has grown into a company with product development, production and retail, owning 30 retail outlets, and more than 400 furniture and home furnishing suppliers and service providers on the Chinese mainland, creating nearly 1 million jobs.