A boy picks a Lego A / S toy in a box at an E-Mart Co. store, a subsidiary of Shinsegae Co., in Incheon, South Korea, on Saturday, December 21, 2013.
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There is no doubt that the Lego brand has benefited from people spending more time at home due to the pandemic, but the company is also gaining new business in China.
Lego said Wednesday that consumer sales jumped 21% last year, yielding a wider product range, paying off e-commerce investments and a growth boom in China.
“It ‘s really the result of a lot of effort by the whole organization, especially with everything we had to deal with throughout the year,” Chief Executive Niels Christiansen told CNBC.
The pandemic forced Lego to close manufacturing sites in Mexico and China, close some outlets for a short time and see its distribution costs rise as shipping became more expensive. .
Despite these headlines, the privately held Danish toymaker reported revenue for the year that exceeded 43.7 billion Danish krone, or about US $ 6.99 billion , up 13% compared to 2019.
Top vendors ranged from classic Lego sets to themed products from Nintendo’s Super Mario and Disney’s Star Wars, Christiansen said.
“Our research shows that more families are building together,” he said.
While the pandemic may have prompted consumers to buy more Lego sets to spend the time in locking, Christiansen said, that’s not the only reason sales were so strong throughout the year . The company is benefiting from investments in the e-commerce industry and emerging markets.
The number of visits to Lego.com doubled last year from the previous year, as many Lego physical stores had to close for a period of time. Buyers had been craving more about buying online, but the coronavirus revolution has accelerated the trends and is unlikely to be reversed.
“I’m not sure if it will go back,” Christiansen said.
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Lego is increasing recruitment for its digital and technology teams, Christiansen said. The company ultimately wants to be able to develop products at a faster pace and create platforms to host Lego content and for unified play.
However, traditional stores are still a key part of the brand’s strategy. In the past few years, the toymaker has pushed into the Chinese market, opening dozens of physical spaces.
While Lego has been part of the culture in other regions such as the UK and the United States, parents in China did not grow up with the iconic colored blocks. So having places where kids can go and get their hands on the bricks and buildable sets has been an incentive for sales.
“Kids see what Lego is and play with it,” Christiansen said. “It’s a brand that was built on the corporate.”
In 2020, Lego opened 134 outlets, 91 of which were in China. The company currently has 678 stores worldwide and plans to add another 120, including 80 in China. The goal is to have around 300 Lego stores in China by the end of 2021.
China is already one of the company’s favorite markets, boasting double-digit growth in the past year.
Christiansen noted that sustaining strong 2020 growth will not be easy, but that the company is well placed to continue to be a major force in the global toy industry.
“I would not bet on 21% again, but I think if we continue with our long-term investments, I then believe we have a chance to outperform the market. and take a ration, “Christiansen said.