It was an eventful 2019 for LEGO, the Danish toymaker, in China. After spending much of the year battling and shutting down cheap imitators, it ended 2019 trying to defuse tensions over a struggling education foray, even as it plotted to grow its business—and presence—in a market estimated at $31 billion and growing—and compensate for softening sales in its core markets in North America and Europe.
Despite the stress of dealing with copycats, LEGO ended 2019 with 140 retail stores across 35 cities in China, with plans in the new year to another 80 branded retail stores in 2020, bringing the total store number to 220 by the end of this year. The firm will also open its fourth flagship store in China in Hangzhou in the first half of 2020.
As a brand, LEGO in China has to position itself differently from its traditional focus in developed markets.
Unlike people in developed markets like the United States and Europe, people in China didn’t grow up with Lego bricks, the brand affinity of LEGO is still comparatively low … we need to connect with more children and parents.” Paul Huang, GM of LEGO China
LEGO ended 2019 in the spotlight for all the wrong reasons in China when its branded education centres were shuttered over differences with local partners.
We are extremely concerned about the parents and children who have been sold packages by a sub-licensee of Semia, which was a licensee of LEGO Education… we are continuously working to resolve this situation says Tom Hall, GM of LEGO Education International.
For a brand looking to grow rapidly, this education misadventure is a bruise that refuses to heal quickly. The company’s reps have repeatedly met local authorities and its truant partners and attempted to mediate, to no avail.
We are optimistic that … we will find a solution for those families impacted, we remain deeply committed to providing innovative STEAM education to children in China.” Hall says the company is committed to finding a solution
At the same time, LEGO also tries to persuade academics-obsessed parents to give their children a break from their learning from time to time. The brand launched a campaign themed “the use of play,” or the power of play, around Children’s Day in China last year to call for discussions and actions about the benefits of play. The campaign was activated throughout channels and touchpoints, including traditional media, social media, in-store and outdoor advertising. Discussions asking “What’s the use of play” took place over social media platforms such as Weibo and WeChat.
Globally, LEGO is recasting itself, having launched its first ad campaign in 30 years, as it seeks to sustain its brand relevance in a competitive and changing market. For example, in August last year, it unveiled a campaign to showcase kick-ass girls, as it sought to extend its presence in Asia
The challenge for a global brand like LEGO is to be locally relevant in large and important markets such as China. To do this, the company’s retail stores feature a variety of engaging, hands-on, fluid play experiences for families to have quality time together.
At our LEGO flagship store in Beijing, the design of the store shows strong bonds with local culture and tradition with iconic builds, such as giant eaves inspired by the Forbidden City (made of 2.2 million Lego bricks), scenea of the Great Wall and traditional Chinese-style sedan chairs, as well as models of guardian lions and mosaics of a guardian dragon adds Huang.
LEGO likely needs to try extra hard because of the rise of mobile phone-based distractions for its core audience.
We believe that LEGO play is universally appealing to all children, and the brick is as relevant as ever, It’s the ultimate creative medium, and the LEGO System in Play remains hugely popular with millions of children around the world. Huang contends.
In China, LEGO is working on a play experience that is seamless (physical versus digital).
Digital is an exciting opportunity to supplement and enhance the LEGO play experience … not as a replacement or a competition says Huang
Two years ago, LEGO launched a partnership with Tencent to create a safe digital experience for kids, and this pact has worked well; a LEGO Video Zone video platform has gathered over a billion views already. Another initiative, LEGO Cube, was launched in August 2019 and has received strong positive feedback, according to the company’s representatives.