Lego is a prestigious toy company that likely needs no introduction, as most of us have probably encountered this Danish brands’ products before. Because Lego’s target audience is children, it is only natural the brand is investing more and more into the Chinese market. There are about 200 million kids in China, and after withdrawing from the one-child policy, the number of consumers should only go up. The middle class is continually growing and tends to purchase foreign products, which results in plenty of parents gifting their kids Lego toys. Lego in China is growing.
History of Lego in China
Lego’s history (乐高 in Chinese) in China goes back to 1993 when the brands’ first store was opened in Beijing. One of Lego’s biggest problems in the 90s was keeping a stable price, as China imposed large taxes on imported toys. As a result, the brand’s products’ cost rose together with the market’s inequalities and often outgrew the suggested retail price. Due to this reason, Lego toys were considered luxury items in the 90s.
Because of the high prices, many companies started creating similar toys and selling them for lower prices. It was possible because at that time, intellectual property laws were not and, at times, still are not respected in China. One of such companies was 启蒙积木 (Enlighten). A lawsuit was started in 1999 by Lego, and the trial ended in their favor.
In the early 2000s, Lego’s main tactic was to increase sales and its popularity by widening the range of products. The company not only began coming up with new concepts for toys but also started to create products such as watches, umbrellas, and posters. They also started including Lego adverts in the 米老鼠 (Milaoshu) magazine.
The growth of Lego in China
Lego continually develops and expands in China. Together with the new decade, the management decided to implement something brand new, even considered revolutionary. The new projects’ main idea was “Play first and see how good our products really are.” A new store was opened in 2012 in Beijing, 2/3 of which was an interactive space. A year later, a similar shop was opened in Shanghai. Between 2010 and 2012, Lego’s sales rose about 50%.
2018 was meant to bring another change. After a decline in sales, the company decided to reorganize, bringing plenty of changes to their Chinese branch. At the beginning of the year, there were only 10 Lego stores in China. By the end of 2018, there were already 60 in 18 different cities. The brand also has ambitious plans for 2021, the focus being recovery after the COVID-19 pandemic. One of the planned novelties for the year is new Chinese culture inspired toy sets, which will be sold not only in China but also in the rest of the world. The company also plans to have 300 Lego stores in mainland China by the end of the year.
Another intellectual property lawsuit was conducted in 2018, this time with Lepin. Once again, the trial ended in Lego’s favor. It is likely why the company trusts the Chinese market, as they know that there is no place there for unfair competition.
It should also be noted that Lego continually develops online. Thirty stationary stores are not many for the Chinese market, which is why the company works with JD, Tmall, Tencent, as well as other companies to place ads online.
How does Lego adjust to Chinese consumers?
Firstly, the very well-chosen Chinese name should be mentioned – 乐高 (Legao). One of the name’s characters, “乐,” means happiness in Chinese and brings positive connotations to customers’ minds.
Furthermore, a couple of years ago, Lego started to sell special editions of their products on Chinese holidays. Examples of such items are sets of blocks portraying Chinese New Years’, traditional dragon dances, or the Dragon Boat Festival. The company also added constructions such as the Great Wall of China and the Shanghai city skyline to their choice of products.
It is worth observing Lego’s actions in China, as the company is a good example of selling typically western products in this country. Lego’s solutions can be an inspiration to all those interested in exporting their local products to China.