◼ BUSINESS Bloomberg Businessweek December 21, 202011GILLES
SABRIE/BLOOMBERG.
DATA:
LEGO
ofitsbestmarkets,clockingdouble-digit growth as
the company’s global sales last year rose 6%, to a
record$6.3billion.
Storesareneededtoaddresstheparticular
challenges of China, says Cindy Chiu, who oversees
the company’s retail operations in Asia. Lego is a
relative newcomer in the country, so few Chinese
parents played with the bricks as children. Stores
give families a chance to experience Legos directly,
building a connection with the brand. “We need to
getbricksintothehandsofmorekids,”shesaysas
shoppersjostlearoundherintheWangfujingstore.
Atthesametime,Legois aggressivelyexpanding
online to make it easier for parents to buy the prod-
ucts they see in stores. This year the company has
introduced web initiatives such as extra discounts,
a membership program, and special promotions
for holidays. In May the livestreamed launch of
a Lego set based on the classic tale, Journey to
the West, featuring the mythical Monkey King,
drew more than 10 million viewers. And Lego has
3.9millionfollowersonTmall,theshoppingsite
ownedbyAlibabaGroupHoldingLtd.—themost
ofanyforeigntoybrand.Thetwo-prongedstrat-
egyisworking,withLego’sTmallsalestopping
4.6billionyuan($700million)inthe 12 months
endedinNovember—farmorethanMattelInc.
andHasbroInc.,accordingtoresearcherWPIC
Marketing+ Technologies.“Peoplewiththemost
retailstoresdobetteronline,”saysJacobCooke,
WPIC’schiefexecutiveofficer.“Idon’tthinkany-
bodyhasthereachofflinethatLegohas.”
Inthreeyearsthecompanywilladda thirdleg
toitsstrategywhena Legolandthemeparkopens
inSichuanprovinceinsouthwesternChina.Merlin
EntertainmentsPlc,theoperatorofLego’sparks,in
Junestartedconstructionata 24-hectare(59-acre)
site with a local partner. The park, Lego’s first in the
country, will have two rides not available in other
Legolands and a Lego-brick depiction of the Great
Wall of China and other Chinese landmarks along
with global icons like the Eiffel Tower or Statue of
Liberty. The company has an agreement to build a
park near Shanghai and says it’s in talks with other
partners across China. “I think of the Legoland parks
as the clubhouse of the brand, where fans can have
the ultimate Lego experience,” says John Jakobsen,
who oversees the Legoland business for Merlin.
Lego’s biggest hurdle in China is copycats. It’s
easy to find plastic bricks from brands such as Gudi,
Jiego, and Lepin, all of which feature white-on-red
logos with script almost identical to Lego’s. But
Lego is fighting back hard, with aggressive actions
in Chinese intellectual-property courts to win dam-
ages and apologies from imitators. In September a2016 20213002001000▼Legostoresin ChinaPROJECTEDShanghai court sentenced nine people to jail terms
of as long as six years and fines as high as 90 mil-
lion yuan for selling counterfeit Legos. The legal
push has dovetailed with growing concern among
consumers about fakes. Cathy Liu, a 26-year-old
superfan with dozens of Lego sets, says she fears
the plastics used in knockoffs might be toxic. “The
biggest plus of Lego is its quality,” she says, while
waiting in line to purchase a set from the latest col-
lection.“Counterfeitsjustaren’taswell-made.”
Thecompanyissimilarlybenefitingfromthe
concernsoffamiliesworriedaboutChina’scutthroat
educationsystem.Manyparentssayschoolsdolittle
to foster creativity, instead focusing on rote learning
that doesn’t give kids the skills needed to prosper
in the modern economy, says Mark Tanner, man-
aging director of China Skinny, a marketing agency
in Shanghai. “Lego really plays to Chinese parents’
desire to invest in toys and activities to prepare their
children for the competitive world,” he says.
One of those parents is Zoe Li, 35, who spends
9,000 yuan a month on Lego robotics classes for her
daughter, hoping the lessons will help the 7-year-old
excel in robot competitions and increase her odds
of getting into a top school. “She’s learning to think
more logically and improving her motor skills,”
says Li, who says the family has dozens of model
kits. “The classes are so worth the cost.” �Bruce
Einhorn and Claire Che, with Tom Mackenzie, Irene
GarciaPerez,andChristianWienberg● It’sbetting$27billiononanelectricvehicle
push.CanitsHummerEVerasethenerdfactor?HowGMPutthe
MeaninGreen
THE BOTTOM LINE As Lego doubles its retail presence in China
to introduce the brand to parents who never played with the blocks
as children, it’s also cracking down on knockoffs.A battery-powered Hummer pickup truck. Mary
Barra, chief executive officer of General Motors Co.,
loved the idea from the moment she heard it. What
better way to assure skeptical buyers that the com-
pany’s coming raft of electric vehicles won’t be just
geeky science projects, GM President Mark Reuss’s
team had argued, than by rolling out a “green” ver-
sion of one of its most badass nameplates?
At a meeting in March 2019, Barra quickly