The Lego company managed to grow its sales by 2% last year, standing out in a global toy industry that saw a significant decline of 7%. Despite the challenges posed by rising inflation and increased credit card debt, Lego posted resilient sales with revenue reaching 65.9 billion Danish krone, equivalent to around $9.65 billion. CEO Niels Christiansen highlighted the company’s ability to outperform the market by almost 10 percentage points, even in tough economic times.
Lego’s success can be attributed to its consistent growth over the years. The company experienced massive gains during the Covid-19 pandemic, with sales jumping by 27% in 2021 and 17% in 2022. Some of Lego’s top-performing brands in 2023 included Lego Icons, Lego Technic, Lego City, Lego Harry Potter, and Lego Star Wars. These brands offer a range of kits that cater to different age groups and skill levels, making it enjoyable for both children and adults to engage in building activities.
While Lego has been able to maintain its sales volume, the company did notice a shift in consumer behavior in 2023. Customers opted for lower-priced sets, indicating a trend of tightening purse strings among shoppers. This shift was reflected in the company’s net profit, which decreased by almost 5% from the previous year. Additionally, the key Chinese market saw revenue declines, with Chinese consumers holding back on spending.
Despite facing challenges in the Chinese market, Lego has been focused on expanding its footprint in the region. The company has opened hundreds of retail locations in China over the past few years, with a particular emphasis on smaller cities. In 2023, Lego opened 147 new stores, with 81 of them located in China. While the number of new openings is expected to decrease in 2024, brick-and-mortar stores remain a crucial part of Lego’s strategy in China.
In addition to expanding its physical presence, Lego has been investing in digital innovation to stay relevant to consumers. The company partnered with Epic Games to launch Lego Fortnite, an open-world survival video game aimed at capturing children’s attention. Lego has also been focusing on enhancing its online shopping experience and digital content, with a 27% growth in its team of digital experts in 2023. The goal is to integrate digital touchpoints seamlessly with physical play experiences, ensuring that Lego remains a top choice for consumers.
Lego’s success in a challenging toy industry can be attributed to its resilience, consistent growth, and strategic expansion efforts. By adapting to changing consumer preferences and investing in digital innovation, Lego has positioned itself as a market leader and continued to outperform its competitors. As the company navigates the uncertainties of the global economy, its focus on innovation and customer engagement will be crucial in sustaining its growth in the future.
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