LEGO steps up branding, innovation to tap China's long-term market potential

Global toy giant the LEGO Group said it would continue to invest in branding and innovation in the Chinese market to meet the diversified consumer demands amid an evolving retail landscape.

"The LEGO Group is committed to long-term development in China, as the market potential here is rather huge," Paul Huang, senior vice president of the LEGO Group and general manager of LEGO China, told Xinhua in a recent interview.

China is an important strategic growth market for the LEGO Group. Since its entry into the Chinese market in 1983, the group has opened over 400 stores in over 120 cities across the country to date.

While noting certain challenges facing the overall macroeconomy in recent years, Huang said the group is more focused on the future, and has been ratcheting up investment in various field to bring more joyful experiences to children in China.

The LEGO Group is expanding production capacity at its factory in Jiaxing City, east China, and is building a LEGOLAND in Shanghai, which is slated to open next year. It has also established a dedicated local digital technology team, which serves as one of the LEGO Group's four digital centers.

"With the development of the economy, the trend of pursuing high-quality products and a better life remains unchanged," Huang said. "Chinese consumers are increasingly inclined toward experiential and personalized retail services, such as scenario-based shopping, indicating a clear shift in consumer behavior."

By the end of this year, over 70 LEGO stores are expected to have finished their upgrade to ensure flexibility to meet the specific demands of different regional markets.

To better cater to such changes, the LEGO Group has opened beacon stores, which are a high-end form of the group's retail outlet, to offer more individualized and immersive LEGO play experiences via localized design and unique attractions.

A major innovative feature of beacon stores is the Minifigure Factory, which offers personalized toy figure services by allowing consumers to choose the minifigure's outfit and decorations, and to leave their own writings or paintings via digital printing.

The group opened its first beacon store in China in central Chinese city Changsha in August 2023, and its fifth such store opened on December 7 this year in Kunming, capital city of the ethnically diverse province of Yunnan.

The Kunming beacon store, also the first of its kind in southwest China, features a distinctive design that utilizes LEGO bricks to portray characteristic Yunnan elements such as rice noodles, mushrooms, the Water-Splashing Festival and wild animals.

"By integrating local cultural and natural elements, beacon stores can create an immersive shopping experience, fostering an emotional connection between consumers and the local culture," said Jenny Xu, vice president of LEGO China, who oversees offline retail business.

The design of the Kunming store is a joint achievement by the design team in the headquarters in Denmark and their Chinese counterpart, and it took about one year from the design to the completion of the store, Xu said.

"We are confident in the rich retail landscape in China, and will explore new opportunities to bring our beacon stores to children in different regions to enhance LEGO play experience," Huang said.