Lego in China

Engineers gather around a table-sized model of the China Art Museum, a landmark of Shanghai, adding airports for helicopters, car parks and other improvements with colorful bricks. 【小题1】Li Yang, visiting for a few days from Shenzhen, has been waiting for her daughter for two hours. Zhu Yunfei, watching his son, marvels at the variety: “Coming here to play with him is making up for my childhood,” he says. They drop by every week.

Lego’s rise in China has been shiningly attractive. In 2017 it overlook Alpha Group, a local giant, to become the country’s leading toy company (not including video games). In the past two years it has opened 89 stores and wants 50 more by December, which will bring it to 30 cities. Its first Chinese factory started making bricks in 2016. The toy industry is growing by 9% annually in the country, but the Danish firm’s Chinese section has won “very strong double digits(两位数)”, says Paul Huang, its boss.

【小题2】 In 2017 Lego cut 1,400 jobs and recorded its first drop in revenues and profits in over a decade. But last year both ticked up again, by 4% each. Lego has thus retained its status as the world’s biggest toy-maker, snatched from Mattel in 2014 - even as its American rival last year earned its highest revenues in five years from its Barbie dolls.

Newly wealthy parents in China have helped Lego recover. “We have not reached the extreme out there, by far,” says Niels Christiansen, whom Lego brought in as chief executive two years ago. 【小题3】 Last year 98% of those surveyed by Lego said that play was essential for their child’s well-being, even more than Americans and Danes.

Lego has also sensibly managed to meet the demands of local tastes. 【小题4】 Fans were delighted at the attention to cultural detail. One was a Chinese New Year’s Eve dinner kit, with tiny red envelopes and chunlian, lucky couplets on banners pasted around doorways. A dragon boat race set included a sticky-rice dumpling, a popular festival snack. The high-quality kits are pricey, costing up to 700 yuan ($100) a piece.