Attack of the Lego, Sales Growth Alone Amid Toy Industry Contraction

Global toy company Lego succeeded in growing its sales last year despite a contraction in the toy market, CNBC reported on the 12th (local time).

According to global market research firm NPD Group, worldwide toy industry sales decreased by 7% compared to the previous year, but Lego recorded a 2% growth. Lego's sales last year reached 65.9 billion Danish kroner (approximately 13 trillion KRW). This contrasts with the U.S. leading toy company Hasbro, whose sales dropped by 15% in one year.

[Image source=Reuters Yonhap News]

Niels Christiansen, CEO of Lego, appeared on CNBC and said, "Lego outpaced the market growth rate by nearly 10 percentage points, showing strong performance despite the industry's downturn." Lego also exceeded the industry average growth rate with sales increases of 27% and 17% in 2021 and 2022, respectively.

This sales growth is attributed to aggressive marketing strategies and diversification of business models. Among the 780 types of products sold last year, about 50% were new releases that stimulated consumer demand. Notably, the 'Lego Icons' series, which includes sets like the Titanic and Eiffel Tower that appeal to a wide age range, and the 'Lego Technic' series, which allows assembly of various racing vehicles, received significant attention.

Additionally, Lego opened 147 new stores last year alone, bringing the total number of offline stores worldwide to 1,000. Furthermore, by partnering with Epic Games to release the open-world survival video game 'Lego Fortnite,' Lego is expanding its presence in the online sector. CEO Christiansen stated, "We want to provide any type of experience that children enjoy," signaling plans to further expand various digital partnerships.

However, despite this aggressive expansion strategy, the media assessed that Lego was not immune to macroeconomic pressures. In particular, due to the economic slowdown in China last year and reduced consumption, Lego's net profit decreased by about 5%. CEO Christiansen explained, "There was little change in the absolute sales volume in China, but profits declined as consumers opted for lower-priced products."

Lego plans to continue its aggressive expansion strategy this year as well. CEO Christiansen announced plans to open 40 new stores in China alone this year.