Toy giant Lego Group, which operates over 480 stores across more than 120 cities in China, has reaffirmed it will continue to invest in the Chinese market for long-term growth.
Lego announced its decision after posting robust first-half results, marked by 13 percent year-on-year growth in overall revenue to 31 billion Danish krone ($4.62 billion) that outpaced the overall toy industry’s.
Consumer sales surged by 14 percent year-on-year, a contrast to the broader toy industry’s 1 percent decline. First-half operating profit grew by 26 percent year-on-year to a record 8.1 billion Danish krone, while net profit rose 16 percent to 6 billion Danish krone.
During the company’s earnings call on Wednesday, its CEO Niels B. Christiansen highlighted Lego’s rapid growth in China over the past five years.
“Our brand position and market share are much stronger today than they were a few years ago,” Christiansen said. “Although the market is affected by macroeconomic situations, we remain committed to building our brand, optimizing stores and investing in our portfolio in China. The long-term potential in China is fantastic, and we will continue to invest in this market.”
About 40 percent of Lego stores in China are located in third- and fourth-tier cities. In May, the Danish firm launched its fourth beacon store in Fuzhou, Fujian province, following similar launches in Beijing in April and in Changsha, Hunan province, and Xi’an, Shaanxi province, last year.
This strategic expansion aims to bring the brand and play experience closer to Chinese consumers, Christiansen had said earlier this year.
Lego also increased investments in sustainability, retail and digitization to support short and long-term growth.
In the first half, Lego launched around 300 new sets, maintaining a diverse portfolio that caters to fans of all ages. Top-performing themes included both homegrown and licensed lines such as Icons, City and Technic.