Warc Blog

Lego plans growth in Asia

17 October 2013
SINGAPORE: Danish toymaker Lego is developing plans to expand throughout the Asia-Pacific region, using China as a new manufacturing and distribution centre.

Speaking to Campaign Asia, a company official said the world's second largest toy company needed "to reach out to even more consumers in the entire region", and expressed confidence that its products would appeal because "intensive" tests showed they appealed to all children from America to China.

Even though the overall toy market is slowing down in Asia – Euromonitor forecasts slower growth of 7.2% between 2011 and 2016 – Lego's sales in the region grew 35% in its most recent quarter, accounting for 10% of its global revenue.

Plans for growth include a new manufacturing and distribution hub in China, expected to be completed in 2017, which will have the capacity to meet 80% of demand for the entire region.

Lego CEO Jørgen Vig Knudstorp told Bloomberg TV earlier this month that he didn't regard Asia as a supply base, but instead as a growing market.

He said the region was witnessing "urbanisation where 500m people are going to become members of a middle class that will look to great schools, great infrastructure, but also play as an important part of childhood".

The company may find its initiative boosted by a trend identified in the Wall Street Journal whereby Asian parents, particularly in China, are beginning to relax their focus on academic study and are allowing more time for toys and play.

Data sourced from Campaign Asia, Bloomberg, Wall Street Journal; additional content by Warc staff

 
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