Lego CEO Expands Investment in China Despite COVID-19... "Growth in Chinese Market Will Continue"

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Global toy company LEGO announced that it will expand its investment in China this year despite the impact of the novel coronavirus disease (COVID-19). The COVID-19 impact is considered short-term, and the growth trend of the Chinese toy market is expected to continue.

According to Bloomberg on the 5th (local time), Niels Christiansen, CEO of LEGO, stated at an investment briefing that growth will continue this year centered on China, and that the company will continue to increase its investment in China this year, increasing the number of LEGO stores in China by 60% from last year to 220 stores. CEO Christiansen emphasized, "The economic shock to China caused by COVID-19 is short-term," and "We will achieve our store number target regardless of any challenges ahead."

He explained that it is too early to assess the sales disruption caused by COVID-19 this year and that they will attract customers in new cities while maintaining the strategy of flagship stores. He also suggested that "sales are not stopped" just because customers are not visiting stores due to COVID-19, indicating that sales through online channels are continuing. CEO Christiansen said, "There may be changes in the market in the short term," adding, "Such things usually happen, and we handle them well each time. We always try to shift sales channels to where customer demand exists."

CEO Christiansen said, "We have a more flexible supply chain compared to competitors," and "Since the products are the same, factories around the world can support product supply if needed." LEGO produces products targeting U.S. customers at its factory in Mexico, and makes products for the European market in the Czech Republic, Hungary, and Denmark. The Jiaxing factory in China, which supplies goods to the entire Asian market, was temporarily closed this year but has recently resumed operations.