Lego Has 'Good Chance' for Growth in China, Will Push Into More Cities, CEO Says
Chen Juan
DATE:  Nov 06 2019
/ SOURCE:  yicai

(Yicai Global) Nov. 5 -- The Lego Group has the opportunity to maintain double-digital growth in China over the next few years, according to the Danish toymaker's chief executive, since the country has committed to continue opening-up and a widening of market access.

China is a strategic growth market for Lego, Niels B. Christiansen said in an exclusive interview with Yicai Global in Shanghai. He believes the Billund-based company "will have a good chance" to keep to the same growth path as in the past few years.

Lego's revenue rose 4 percent globally last year with double-digit growth in China, according to the company. The company said earlier that it plans to bring the total number of its branded retail stores to 140 in the country by the end of this year, covering more than 35 cities. 

"As we speak, we have 120 stores, and we expect to hit the target by the end of this year," Christiansen said. "We set ourselves a new target for 2020 to add another 80 stores. By that time Lego stores will appear in more than 50 Chinese cities."

Lego already has two flagship stores in Shanghai, and in February it opened one in Beijing. The firm has also expanded rapidly in second and third-tier markets. In July, it opened its first certified store in Xi'an, the capital of northwest Shaanxi province.

"We are working digital and offline stores at the same time," Christiansen said when asked why the company decided to open more offline stores rather than rely on e-commerce. "This is a balance."

Loving the Bricks

Children fall in love with Lego when they get the little bricks in their hands and have their own experience of building, he added.

"The physical store is important, that's where kids can get in and get out the play table," Christiansen said. "They can try it out physically and then they can choose. Later some decide to buy in stores and some buy online. We believe the balance of the combination."

Lego already has good cooperation with China's major e-commerce platforms such like JD.Com, and Alibaba Group Holdings. In September, it also partnered with Chinese internet giant Tencent Holdings to soft launch sandbox game Lego Cube for Chinese players, the first mobile game developed between the two sides to provide a creative and safe digital experience.

When talking about Lego's cooperation with Tencent, Christiansen noted that "we are building a safe social digital environment where kids can play and this is also in line with the Lego values. We'll try to guard their safety beyond a digital world in a safe manner. That's something that's very important for us."

China Market Confidence

In his opening speech at the second China International Import Expo today, President Xi Jinping sent a clear message that the country will continue to open up its market, keep expanding market access, continue improving the business environment and strengthen protection of intellectual property rights.

"President Xi's speech further strengthens our confidence in China and the future of our business in the country," Christiansen said. "We will continue to invest in China to bring the creative Lego play and high-quality learning through play experiences to many more Chinese children."

During the first CIIE last year, Lego was one the most appealing exhibitors, and it also built its brand and got into talks with authorities on different topics, he added. The CIIE's slogan of a 'shared future, shared vision' fits very well with the Lego mission, he said.

For the second CIIE, the company will not only exhibit its products but also display its 'learning agenda.' The company has started a three-year partnership with Save the Children to provide access to quality learning through play for children aged 3 to 6 in rural areas of southwest China's Yunnan Province. 

After the successful launch of special China sets at the first CIIE, Lego today unveiled two new sets to celebrate Chinese lunar new year traditions and culture. Lion Dance and Chinese New Year Temple Fair reproduce popular scenes associated with the Spring Festival, which is a special time for Chinese families to reunite and celebrate.

Both sets will be available in China and Asia-Pacific markets from this December, the company said.

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Keywords:   Lego,CIIE