Danish Toy LEGO Continues On Building A Strong Chinese Market Presence

Danish Toy LEGO Continues On Building A Strong Chinese Market Presence
Lego logo is seen at a toy store in Bonn, Germany, September 5, 2017. (Photo: REUTERS/Wolfgang Rattay)

Enjoying a continuous double-digit growth for the first half of 2019 in sales of its construction toy of interlocking plastic building blocks, China remains a strategic market for Denmark-brand LEGO.

The privately-held company is on its way of hitting their target of having more than 140 stores in 35 cities by the end of 2019 and is confident in keeping the good momentum because of the mainland's increasing demand for learning through play.

The company not only attained a strong Chinese presence but its revenue rose 4% year on year.

Though this revenue rise comes with a 12-percent drop to $396 trillion in net profit, LEGO explained this was the result of its major investment strategy in China: to develop new products, expand and open new markets.

Paul Huang, senior vice president of LEGO Group and general manager of LEGO China is aware of "the number of cities and population" giving the company a vast potential market and inspiring confidence to continuously grow in the country.

LEGO Group CEO Niels B. Christiansen is "very pleased" with the growth of the brand in the mainland.

In addressing LEGO's focus on brand presence online and offline, Chiristiansen stressed that no one can say that "physical presence is not necessary" because kids try out products in stores.

He added that the store presence of toys is "really important" especially in China where the company has to build its brand.

Not to downplay digitalization, LEGO is also starting to create toys that include technology.

It launched in February building sets that turn into haunted versions when used with an augmented reality smartphone app.

This April, the company also hired a chief digital officer to focus on LEGO incorporating more technology in playing with its bricks.

LEGO has strong partnerships with Chinese e-commerce and collaborated with Tencent for the soft-launch of the mobile game LEGO Cube as a nod to China's advanced digitalization.

With its 100th retail store in Xi'an City that opened in July, it's also the first store of LEGO in northwest China to expand its foothold in the country's inland and lower-tier cities.

LEGO isn't new to copycats and after winning over a number of cases, the company is appreciative of China's protection of intellectual property that gives a fair chance to all market players.

LEGO was one of the first companies to sign up for the second China International Import Expo (CIIE) happening this November having been impressed with the first.

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