The Lego Group is accelerating its expansion in China, with plans to open more than 80 new branded stores this year and penetrate lower-tier cities to reach more consumers after posting double-digit growth in revenue for 2022.
The company has opened more than 90 new stores in China, part of its 155 new stores launched globally of a worldwide total of 904 stores.
"We will keep expanding our footprint in China in 2023," said Paul Huang, senior vice president of the LEGO Group and general manager of LEGO China. "We expect to open another 80 new retail stores in China this year. Currently, more than 40 percent of our stores are located in third-tier and-below cities, which have huge potential for further development."
The company is confident about the Chinese market, in this year and beyond.
"I've been positively encouraged by even just in January and February, we have seen traffic and consumers come back into stores," said Niels B. Christiansen, CEO of the LEGO Group. "I'm confident and positive about the development in China in 2023 and the future in 2024."
Rising sales in China are driven by the more than 200 million people in the country aged between 0-14, by economic growth and by the rising purchasing power from growing middle-class populations, Huang said.
Staying culturally relevant with local innovations is key to the company's strategies in reaching more kids and their families. During the 2023 Chinese New Year, the LEGO Money Tree set saw strong sales volume from local consumers.
The group is also investing in their production and supply chain capacity in China. They have built a large factory in Jiaxing, Zhejiang province, serving consumers in China and the Asia-Pacific. The factory will be expanded to make sure capacity is in the right place, the CEO said.
Globally, the toymaker has seen revenue for the year of 2022 grow 17 percent to DKK 64.6 billion ($9.25 billion) compared with the same period last year, driven by strong demand for the company's portfolio, online and instore retail partnerships, a robust e-commerce platform and a resilient global supply chain network.
The group's operating profit increased 5 percent to DKK 17.9 billion, up from DKK 17 billion in 2021. Net profit was DKK 13.8 billion, a 4 percent rise from DKK 13.3 billion last year.
The company expects single-digit revenue growth in 2023, outpacing the global toy market and will continue to accelerate investments in strategic initiatives.
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