LEGO announced plans to further expand its presence in China following its successful opening in Beijing last week. The company said it was the "most successful opening in Lego store's history."
According to Xinhua, the Danish toy provider sees China as a strategic region that allows for expansion in e-commerce and physical platforms. CEO Niels Christiansen said, "China is a strategic growth market, and we will continue to expand our local presence both online and offline."
While the company suffered losses in 2017, it bounced back in 2018 with a 3 percent growth increase year-on-year. Operating profit and revenue also increased by 4 percent, accounting for a total of 10.8 billion Danish krones and 36.4 billion Danish krones respectively.
As revealed in its Wednesday financial report, China helped improve LEGO's growth in digital and physical platforms, further driving the toy firm's presence in the e-commerce sect.
Last Friday, LEGO opened its first Beijing flagship retail outlet. The Wangfujing store saw customers patiently waiting in line for hours. The global toy giant already has an established store in Shanghai that has been growing steadily since its opening in 2016. Another Shanghai outlet was opened last year.
LEGO Group Senior Vice President, Paul Huang said of the company's success in China, "We are very optimistic about the Chinese market. Local presence still has much room for expansion." He added that the country's growing middle-income community could open more opportunities for expansion.
According to Huang, the toy company has plans to add 80 stores across 18 cities in China this year. If everything goes as planned, the group will have a total of 140 retail stores in 30 cities before 2020.
While the price gap is narrowing as the year's pass, Christiansen stressed that this will not be an issue in sales and expansion since the world has started opening up to a globally-inclined business model.
CGTN News noted that LEGO reported single-digit growth in Western Europe and in the United States but it recorded double-digit figures in the Chinese market. The outlet added that Christiansen believes the company can provide the demands of Chinese consumers.
The popular toy provider is also in a partnership with Chinese tech giant Tencent in a venture that aims to provide Chinese children with safe digital environments that encourage creativity and education.
In the joint venture, LEGO and Tencent will explore potential projects centered on augmented reality as part of the Danish group's efforts in developing into a company that provides safe, digitalized products.
