LEGO set for China expansion over solid growth outlook

Source: Xinhua| 2019-02-27 16:23:04|Editor: ZX
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BEIJING, Feb. 27 (Xinhua) -- Danish toy giant LEGO is looking for a bigger presence in China to reach out to and educate more kids by building on the robust growth of the emerging market.

"China is a strategic growth market, and we will continue to expand our local presence both online and offline," said LEGO Group CEO Niels Christiansen.

The Chinese market registered strong double-digit revenue growth in 2018 as the firm expanded business in more cities and on e-commerce, digital and physical platforms, according to the group's financial performance report released Wednesday.

After a difficult year in 2017, the group saw its 2018 growth back on track. Global consumer sales grew three percent year on year, while revenue and operating profit both expanded four percent to reach 36.4 billion Danish Krones (about 550 billion U.S. dollars) and 10.8 billion Danish Krones respectively.

The Denmark-headquartered family business opened its first Beijing flagship retail outlet last Friday in downtown Wangfujing with customers queuing up for hours, marking "the most successful opening in Lego store's history," according to Christiansen.

LEGO has seen steady growth in the Chinese market since it entered the country over two decades ago. It opened its first retail flagship outlet in Asia in Shanghai in 2016 and another in 2018.

Paul Huang, senior vice president of LEGO Group and general manager of LEGO China, is upbeat on local growth prospects over a growing middle-income community, faster consumption upgrading and more children fans due to second-child policies.

"We are very optimistic about the Chinese market. Local presence still has much room for expansion," Huang said, adding that a total of 80 stores will be opened in 18 cities this year, adding up to about 140 retail stores in 30 cities in China by the end of 2019.

LEGO has seen encouraging developments in China's intellectual property rights protection, according to Christiansen, as the company has won several cases against copycat firms in recent years.

Christiansen also treats the rapid digitization wave over different sectors more of an opportunity than a challenge, and the company has been investing in the digital front.

"We'll continue to invest in our product line so that we can also continue to come out with innovative products that really embrace digital aspects and promote what we call 'fluid play' where kids can jump between physical and digital," Christiansen said.

LEGO teamed up with Chinese Internet giant Tencent last year to develop a safe Internet eco-system covering games, short videos, smart toys and social networking to empower Chinese children online.