Lego is a prestigious toy company that likely needs no introduction, as most of us have probably encountered this Danish brand’s products before. Because Lego’s target audience is children, it is only natural the brand is investing more and more in the Chinese market. There are about 200 million kids in China, and after the one-child policy was abolished, the number of consumers can only go up. The Chinese 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 rapidly growing every year, being present in many children’s childhood.
History of Lego in China
Lego’s history (乐高 in Chinese) in China goes back to 1993 when the brand’s 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. Due to this reason, the company struggled with establishing the retail price, which ranged from tens to thousands of yuan. Therefore, Lego toys were a luxury item throughout 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 filed in 1999 by Lego, and the trial ended in its favor.
In the early 2000s, Lego’s main tactic was to increase sales and 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 project’s 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 experience space. A year later, a similar shop was opened in Shanghai. Between 2010 and 2012, Lego’s sales shot up by about 50%.
2018 was meant to bring another change. After a decline in sales, the company decided to reorganize, bringing plenty of changes to its 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 company planned to open 165 new Lego-branded brick-and-mortar stores in 2022, with more than 90 in China. China is undoubtedly gradually becoming the world’s biggest toy market.
Another intellectual property lawsuit was filed in 2018, this time against Lepin. Once again, the case was closed in Lego’s favor. It can be presumed that the Danish company trusts the regulations on the Chinese market, as there is no place for unfair competition.
Lego is also expanding its brand online, most notably through its partnerships with Chinese tech giants like JD, Tmall or Tencent, as well as other companies.
How does Lego adjust to Chinese consumers?
Firstly, a very well-chosen Chinese name should be mentioned – 乐高 (Legao). One of the name’s characters, “乐,” means joy and happiness in Chinese and brings positive connotations to customers’ minds.
Furthermore, a couple of years ago, Lego started to sell special editions of its 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 Lego parts that can form the Great Wall of China and the Shanghai city skyline.
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.