From the launch of building bricks in the late 1790s to today’s digital dependent society, building bricks toys have survived years of evolution and are still popular among children and adults. LEGO (in Chinese乐高), a line of plastic construction toys, was founded in 1949 and has gained popularity ever since. As the leader and founder in plastic interlocking blocks, LEGO has survived various competition and copy-cats in the global market.
LEGO clone is a term that has been used by LEGO fans referring to various brands of construction bricks. Many LEGO competitors have produced building bricks compatible with LEGO building bricks and taking advantage of LEGO’s brand recognition. LEGO’s consumer market in China is subject to heavy competition. Chinese brands such as COGO (in Chinese 积高), Banbao (in Chinese邦宝), Sluban (in Chinese 小鲁班), etc. along with Western brands such as Mega Bloks (in Chinese 美高), Kre-O (in Chinese 酷垒), K’nex (in Chinese 科乐思), etc. form a highly competitive market in the building bricks toys in China’s industry. Here is an insight about the Building Bricks Toys in China’s market.
LEGO’s Chinese Competitors in Building Bricks Toys in China’s Market
COGO (in Chinese 积高) is China’s first domestic building bricks toy company that is on the share market. It is founded in 2004 and started with manufacturing toys. Its COGO building bricks series are the most profiting segment in the company. COGO have a wide range of distribution channels, both online and offline. Online channels include Tmall (in Chinese天猫), Amazon (in Chinese 亚马逊), JD.com (in Chinese 京东), Dangdang (in Chinese 当当), etc. and also in physical stores such as department stores, supermarkets, whole sales, etc.
Banbao (in Chinese邦宝) is first launched in 2003 and focuses on plastic building bricks’ innovation, production, sales and service. The company’s motto is to learn while playing. It is a popular brand in China as Chinese parents favor toys that help their children to learn as well as play. Therefore, Banbao’s motto targets this very well. Building bricks allow children to use their imagination and creativity while playing.
Sluban (in Chinese 小鲁班) is named after the founder of China’s wood craftsman Luban (in Chinese 鲁班). Luban upholds the motto of attention to detail, thinking, innovation, continuous learning, and the spirit of excellence. Thus, the company eagers to develop the best plastic building bricks and help develop mental excellence among children, guiding them to develop interest creative design.
LEGO Bricks are at Least 15 Times more Expensive than Popular Chinese Brands
In comparison to other building bricks, LEGO is highly priced, which puts it at a disadvantage in the highly price sensitive market in China. In JD.com (in Chinese 京东), 80 piece LEGO bricks are priced at ¥299, around ¥3.74 for each piece. Mega Bloks are priced at ¥160 for 80 pieces, around ¥2 for each piece. Chinese brand Banbao are priced at ¥118 for 502 pieces, only at ¥0.24 for each piece. LEGO is over 15 times more expensive than China domestic brands. LEGO’s City Series police station is priced at ¥2998 for 783 pieces (¥3.83 per piece) and Banbao’s police station series is priced at ¥399 for 2488 pieces (¥0.16 per piece). This is just under 24 times less expensive than LEGO’s police station series. Some LEGO theme series can be up to as much as ¥40,000 (http://item.jd.com/1759345844.html). With children’s constant variation of preferences and favoring new items, parents are reluctant to purchase expensive series.
LEGO’s Popularity on the Internet
China, in the eye of many foreign companies, is a growing market and creates a huge opportunity for sale due to its population and continuous increase of standard of living. As LEGO’s CEO said, “Asia is not a supply base, it’s a market and a growing market”. As a standard of living increase in China, the middle-class becomes the major population, will have the ability to purchase. LEGO develops kids’ creativity, this is deemed important for many Chinese parents.
A keyword search for LEGO on Baidu Trend with “Building Bricks” and its competitors Mega Bloks and Banbao indicates an overall advantage of LEGO on the Internet search engine in comparison to the market itself and other competitors. LEGO China’s official Weibo Account have over 383,000 followers and around 2 million search results. Over 670,000 related videos Youku (Chinese Version of Youtube 优酷). In China’s active social networking platforms, LEGO shows an advantage over other brands. Almost all the building bricks brands are not present on social networks in Chinese sites. This gives LEGO a big advantage and gains more exposure on China’s Internet.
From Baidu Trend: Edited by Daxue Consulting
LEGO Super-Fans Worldwide
LEGO only have one product. This seems to be a disadvantage to the company, however, the brand played this out well. The main advantage that LEGO has over other similar brands is it has committed fans. They are adults with purchasing power, collectors of LEGO. In the children’s toy market, some series of LEGO are too expensive for parents to buy for their children. The brand recognition among children is not as concentrated as it is for adults. In the essence, kids just want to play with building bricks, so if their parents offer to buy another set of building bricks that look similar, they will agree. Thus the majority of parents, under the same quality, will choice cheaper brands, as kids playing with building bricks often lost pieces and patience.
However, LEGO’s vast amount of more expensive series is purchased by collectors, LEGO super-fans. A Weibo blogger, LEGO Collector, (in Chinese乐高居士) have nearly 600 posts on Weibo on different models and series. Many collectors have over thousands U.S. dollar worth of bricks, with different themes and bricks. Many collector posts videos online, this is promotion and advertisement for free for companies. Such videos are one of the reasons of sales of building bricks toys in China, customers can mix and match multiple series can show off their creativity and building skills.
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Daxue Consulting, Market Research in China