Gifts / Sports & Toys

Since the official price increase of Lego on August 1, the author visited the Lego Beijing Indigo store offline. The offline staff said that after the price increase in August, the store sales did not decline, and even because of the Qixi Festival, some Product sales are better than in July.

"I won't worry about the future sales (due to the price increase), because the consumers who came to the scene and wanted to buy did not stop buying because of the price increase. In fact, everyone doesn't care much about the price." The above-mentioned staff member said.

It is worth mentioning that while Lego was busy raising prices, some domestic building block toy manufacturers were cutting prices.

After the price increase of Lego, there are more orders?

In July, Lego announced a global price increase, explaining that due to the rising prices of energy, logistics, and raw materials, Lego production costs were rising, and in order to ease the pressure, it decided to raise prices globally. Among them, some package products in China have been raised since August 1, 2022, with an increase of between 5% and 25%, including many popular products such as BMW, Ford, and Porsche.

It is understood that the news of the price increase has caused "anxiety" among some Lego users. In an interview with the media, some Lego sellers said that the accelerated price increase of Lego has stimulated users to place orders, and some trading companies have even exceeded the purchase orders sent overseas.

Why can Lego increase prices without affecting sales, but will further stimulate consumers to buy?

Jiang Han, a senior researcher at Pangu Think Tank, said that Lego has firmly occupied a leading position in the market both in the traditional toy market and in the emerging toy market. Powder".

In the global construction toy market, LEGO is the dominant player, ranking first with absolute market share, and its leading position is stable.

At the same time, the contribution of the Chinese market to Lego cannot be underestimated. In 2021, the LEGO Group will open 165 branded retail stores worldwide, 90 of which are in China. In 2018, there were only about 30 franchised stores authorized by the LEGO Group in China. By the end of 2021, of the 832 LEGO Group stores worldwide, 340 are located in China.

Compared with 2020, the LEGO Group's revenue in 2021 will increase by 27% to 55.3 billion Danish kroner (about 51.48 billion yuan), and retail sales will increase by 22% year-on-year; compared with 9.9 billion Danish kroner (about 9.15 billion yuan in 2020) In 2021, the LEGO Group’s net profit will increase to 13.3 billion Danish kroner (about 12.3 billion yuan).

The price increase did not even affect the LEGO Group's continued progress to China's second- and third-tier cities. On July 31, the day before the price increase of Lego in China, Hainan's first Lego brand retail store opened in Haikou, which is the 100th city in which Lego retail has entered mainland China.

Also on July 31, some domestic toy manufacturers said they would cut prices across the board.

Lego's price increases by 5%-25%, and the domestic toy brand TOPTOY announced on July 31 that it will cut prices by 5%-25% across the board.

It is worth mentioning that in August, the topic of "will you find a replacement for Lego's price increase?" has rushed to the hot search, and many people believe that domestic building block brands have ushered in new opportunities. The head of TOPTOY brand marketing believes that domestic building blocks have undergone earth-shaking changes in terms of innovation and quality. The structural difference between the supply and demand sides of the Chinese building block market is ushering in a turning point.

According to public data, the Lego family has won over 40% of the Chinese market, and the rest of the market share is competed by other overseas brands and Chinese brands. However, the magic mirror market intelligence data shows that most domestic brands have lower prices. The proportion of LEGO products with a price higher than 560 yuan is close to 40%. The highest price of some domestic brands is not more than 200 yuan, and a small number of high-end products priced higher than 560 yuan have been developed, accounting for less than 5%.

The affordable market is still the "comfort zone" for domestic brands, but it is "very unfriendly" to corporate profits.

"Lego's high profits are naturally linked to high prices. Many domestic toy companies in the Chinese market are still in a state of low profits, because our toy companies are still in a market with low-quality competition, resulting in limited development space. High-end The development of the market is very necessary, and only when we really learn to make high-end toys and learn to operate the IP of toys can we bring about the healthy development of the brand." Jiang Han said. "At present, some trendy brands like Bubble Mart are already working in this direction, it just takes time."

Zhang Yi, CEO and chief analyst of iiMedia Research, said that technically speaking, many domestic brands have produced excellent works, but the stereotype of domestic consumers' low-cost domestic brands is difficult to change overnight. Brands also need to think about countermeasures, and cannot always rely on low prices to attract users.

However, the growth rate of domestic brands has begun to surpass Lego. According to the data of Whale Staff, the sales growth of some domestic building blocks in the first half of 2022 has exceeded that of Lego. Among them, the sales of Meng Xiaoying and KeepPley have increased by more than 230% and 150% year-on-year respectively, and Lego is 26%.