A young boy chooses a boxed Lego A/S toy at an E-Mart Co. shop, a subsidiary of Shinsegae Co., in Incheon, South Korea, on Saturday, Dec. 21, 2013.
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There’s no doubt that the Lego brand name has actually taken advantage of individuals investing more time in your home throughout the pandemic, however the business is winning brand-new organization in China also.
Lego stated Wednesday that its customer sales leapt 21% in 2015, the outcome of a wider item variety, e-commerce financial investments settling and a rise of development 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 required to close making websites in Mexico and China, momentarily shutter some retail areas and saw its circulation expenses increase as shipping ended up being more pricey.
Despite these headwinds, the independently held Danish toymaker reported profits for the year that topped 43.7 billion Danish krone, or about US$6.99 billion, up 13% compared to 2019.
Top-sellers varied from timeless Lego sets to themed item from Nintendo’s Super Mario and Disney’s Star Wars, Christiansen stated.
“Our research does show that more families are building together,” he stated.
While the pandemic might have motivated customers to purchase more Lego sets to kill time in lockdown, Christiansen stated, it’s not the only factor sales were so strong throughout the year. The business is profiting of financial investments in its e-commerce organization and brand-new markets.
The variety of check outs to Lego.com in 2015 doubled from the year prior, as much of Lego’s physical shops were required to momentarily close. Customers had actually currently been gravitating more to online shopping, however the coronavirus break out has actually sped up the patterns and it likely will not be reversed.
“I’m not sure it’s going to go back,” Christiansen stated.
A unique play experience that integrates the open innovative play of LEGO structure toys for kids with an enhanced truth app.
Lego is increase recruitment for its digital and tech groups, Christiansen stated. The business eventually wishes to have the ability to establish items at a much faster speed and produce platforms to home Lego material and for incorporated play.
Still, conventional shops stay a crucial part of the brand name’s technique. In current years, the toymaker has actually made a push into the Chinese market, opening lots of physical areas.
While Lego has actually become part of the culture in other areas like the U.K. and the United States, moms and dads in China did not mature with the renowned colored blocks. And so, having locations where kids can go and get their hands on the bricks and see the sets that can be constructed has actually been an advantage 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 remained in China. The business presently has 678 Lego branded shops internationally and has strategies to include another 120, consisting of 80 in China. The goal is to have around 300 Lego shops in China by the end of 2021.
China is currently among the business’s finest markets, boasting double-digit development in the in 2015.
Christiansen kept in mind that sustaining the strong development of 2020 will not be simple, however that the business is well-positioned to continue being a dominant force in the international toy market.
“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.