A boy selects a boxed Lego A/S toy at an E-Mart Co. retailer, a subsidiary of Shinsegae Co., in Incheon, South Korea, on Saturday, Dec. 21, 2013.
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There’s little doubt that the Lego model has benefited from folks spending extra time at dwelling through the pandemic, but the corporate is successful new enterprise in China as properly.
Lego stated Wednesday that its shopper sales jumped 21% final yr, the results of a broader product vary, e-commerce investments paying off and a surge of progress in China.
“It is really a result of a tremendous effort by the entire organization, especially with all the things we’ve had to cope with throughout the year,” CEO Niels Christiansen informed CNBC.
Due to the pandemic, Lego was pressured to shut manufacturing websites in Mexico and China, briefly shutter some retail areas and noticed its distribution prices rise as delivery grew to become dearer.
Despite these headwinds, the privately held Danish toymaker reported income for the yr that topped 43.7 billion Danish krone, or about US$6.99 billion, up 13% in contrast with 2019.
“Our research does show that more families are building together,” he stated.
While the pandemic could have inspired shoppers to purchase extra Lego units to cross the time in lockdown, Christiansen stated, it’s not the one motive sales had been so robust through the yr. The firm is reaping the advantages of investments in its e-commerce enterprise and new markets.
The variety of visits to Lego.com final yr doubled from the yr prior, as a lot of Lego’s bodily shops had been pressured to briefly shut. Customers had already been gravitating extra to on-line purchasing, but the coronavirus outbreak has accelerated the tendencies and it probably will not be reversed.
“I’m not sure it’s going to go back,” Christiansen stated.
A novel play expertise that mixes the open artistic play of LEGO constructing toys for youths with an augmented actuality app.
Lego is ramping up recruitment for its digital and tech groups, Christiansen stated. The firm finally desires to have the ability to develop merchandise at a quicker tempo and create platforms to accommodate Lego content material and for built-in play.
Still, conventional shops stay a key a part of the model’s technique. In latest years, the toymaker has made a push into the Chinese market, opening dozens of bodily areas.
While Lego has been a part of the tradition in different areas just like the U.Okay. and the United States, dad and mom in China didn’t develop up with the long-lasting coloured blocks. And so, having locations the place youngsters can go and get their arms on the bricks and see the units that may be constructed has been a boon to sales.
“Kids get to see what Lego is and play with it,” Christiansen stated. “It’s a brand built on the physical.”
In 2020, Lego opened 134 retail areas, 91 of which had been in China. The firm at present has 678 Lego branded shops globally and has plans so as to add one other 120, together with 80 in China. The intention is to have round 300 Lego shops in China by the tip of 2021.
China is already one of many firm’s finest markets, boasting double-digit progress in the final yr.
Christiansen famous that sustaining the robust progress of 2020 will not be straightforward, but that the corporate is well-positioned to proceed being a dominant power in the worldwide toy trade.
“I wouldn’t bet on 21% again, but what I do think is if we continue our long-term investments, then I believe we have the chance to outperform the market and take share,” Christiansen stated.