Cultural norm changes helping Lego succeed in China

A successful product line and changing parenting ideas in China helped propel Lego profits by 35 percent during the first half of 2013

admin

Sep 9, 2013

While Vestas and Bang & Olufsen have been amongst the Danish companies that have struggled to break through on the lucrative Chinese market, Lego looks to have had more luck.

Last week, Lego revealed figures that showed that sales in China had shot up by 35 percent during the first half of 2013.

“We are very pleased with our growth in Asia because it supports our long-term ambitions about making the region a larger contributor to our collective sales,” John Goodwin, a Lego CFO, said in a press release.

Legends of Chima a big success
Lego’s success in China is due in large part to the Legends of Chima product line, but the toy manufacturer has targeted China as a prime market for quite some time now and will build a factory in the country next year in order to further its gains in the region.

“Lego Legends of Chima has performed well in early phases and is one of the largest Lego themes,” Mads Nipper, the chief marketing officer for Lego, said in the press release. “We expect that the theme will continue to grow throughout its first year on the market. The product line has performed well and contributed to high growth, particularly in Asia.”

But it’s not just a global brand and solid marketing strategies that are behind Lego’s success in China.

Children encouraged to play
Yin Jianli, an author and expert in child rearing, said that one reason for Lego’s success is that young Chinese parents, particularly from the country's growing middle class, are beginning to turn away from traditional ideas that children should focus on education and learning, and not playing.

“Parents’ ideas about what constitutes upbringing and education is changing and that’s one of the reasons that Lego and similar toys are becoming more popular in China,” Yin told Politiken newspaper. “Many from the younger generation, especially the highly-educated who perhaps have also studied abroad, want children to use toys in order to develop their creativity and intelligence.”

Aside from the positive figures generated in Asia, Lego also enjoyed growth in other regions during the first half of 2013. Consumer sales rose by eight percent in the European market and by four percent in the North and Latin American markets.

Its success means that Lego overtook Hasbro to become the world’s second-largest toy manufacturer behind US company Mattel, which makes the Barbie doll.