IBS Individual Assignment

Wisely 许良义

Ikea and Tiktok Internationalization

 Ikea Introduction

IKEA is a Swedish-founded global retailer that designs and sells ready-to-assemble furniture, kitchen

appliances and home accessories, among other useful goods and occasionally home services. It has been
the world's largest furniture retailer since at least 2008. Ikea is known f or its low-priced, elegantly
designed merchandise and displayed in large warehouse stores. In 1973, growth opportunities are limited
in the home market where they had 15% of market share. Therefore, Ikea decide to expand to Western
Europe. It is Ikea global expansion starting point.

 Tiktok Introduction

The app was launched in 2017 by ByteDance, for markets outside of China. ByteDance has previously
launched Douyin for the China market in September 2016. TikTok and Douyin are the same, but run on
different servers. The application allows users to create short music and lip-sync videos of 3 to 15
seconds and short looping videos of 3 to 60 seconds. Bytedance expanded Douyin to international market
by means of opportunity to gain more market share. At first, Douyin only exist in one-fifth of Internet
users globally. Go international by creating global app under the TikTok brand will let Bytedance to
subsist globally.

 Ikea Internationalization Process

Ikea entered Canada and had succeeded by opening seven stores. Ikea then tap into US and decide to
opened store on the coasts after doing survey on US market. Few years later, Ikea found out that what
they offered to the US market does not fit the customer’s preference and mistake in store location-
choice. Ikea learned from the past experienced and redesigned to adapt with US customer’s needs.
To tap into US culture, Ikea also started promoting itself with advertisement to targeting certain types of
customers. Ikea realize that local customization is a must to gain market share of host country. When
Ikea entered China, the store exterior design and other marketing strategies were used to adapt to the
local.

 Tiktok Internationalization Process

Tiktok entered Indonesia 2 years ago by. Initially, TikTok approached different markets by preserving
and introducing its characteristics and features from Douyin. When expanding its app to South East
Asia countries and Japan, they recruited local employees that were familiar with the culture of host
country in order to gain market knowledge. Then they adapted their advertising campaigns to the
different characteristics of each market and focused on local Internet celebrities’ and influencers’
powerful appeal in South East Asia countries and Japan. With this method, TikTok would gain huge
market knowledge to cater to local customers. Also, TikTok operation team promoted related
campaign based on different characteristics of each market.
Since entering Indonesia, this short music video application has become a forum for Indonesian to
express their imagination and creativity. Report said that, users in Indonesia spend an average of 29
minutes to not only watch but also create, discover, share videos on the platform.

 Summary

Ikea and Tiktok shared some similarities in their internationalization process. First, these two firms
learned from experiences and localized based on host country cultural background and habitual
preferences. Then initially these two firms choose to expand to countries that are geography near to their
home country. The proximity on psychological distance of these countries has greatly reduced the cost
of external expansion of firm. On the other hand, countries with similar culture and environment will be
easier to provide good conditions for promotion.