Founded in 1932, Danish toymaker Lego has managed to expand its business to more than 130 countries worldwide. Among those, China seems to be a particularly fertile ground for the company. Although China only represented 1% of global sales until recently, Lego is penetrating the market rapidly, believing that the future there will be bright. Over the past several years, Lego has opened more than 380 retail stores in 105 cities throughout China. In 2022 alone, it opened a total of 90 new stores, and for 2023 it has plans to open another 80.
Its success is rooted in a number of factors. As a recent survey has shown, 93% of parents in China consider Lego’s building bricks to be educational as they help children to learn – a high priority in Chinese culture and values. But even more important were some recent adaptations to the local environment. Lego has created specific sets for China such as a display for the Lunar Year Festival and another one based on one of the most important Chinese novels, the 16th century “Journey to the West”. With purchasing power rising in more distant parts of China, Lego has also shifted its focus to the country’s 2nd and 3rd tier cities. To support Lego’s development in the market, the company has also increased investment in its production facilities and expanded its production capacity. A Legoland theme park that had been put on hold for several years, finally seems to be breaking ground in 2023.
Despite its current success, China certainly doesn’t come without challenges. Despite recent successes in Chinese courts, there are still several copycat products that eat into Lego’s sales. And then there’s the cultural-political environment. Not wanting to draw the government’s attention, Lego refused to sell bricks in bulk to Chinese artist Ai Weiwei who is often critical of the People’s Republic’s government, and it also had to take sets in rainbow colors that celebrate diversity and inclusion off the market. It remains to be seen if everything will be awesome for Lego in China.