Lego's Chinese -style expansion: Sinking price increases on the side

"China Economic Weekly" reporter Shi Qingchuan | Beijing report

On September 3, the LEGO authorized specialty store Changsha Xingsha Vientiane was reinstalled. Prior to this August 6, Shanxi Datong, July 30, Hainan Haikou, and Lhasa, Tibet on July 16, and welcomed the settlement of Lego authorized stores.

Lego Group entered the expansion mode in China. When many entity companies reduce the scale of offline stores, why did the Lego Group expand at this time? How did the Lego Group lay out in China?

Lego Group's "raid" in China's second and third tier cities

At 10 am on the morning of July 30, on the 3rd floor of Haikou Vientiane City, at the entrance of the Lego authorized specialty store that was about to open, the team waiting to be opened has reached the elevator mouth. Huang Guoqiang, senior vice president of Lego Group and general manager of China, rubbed hands The lion dance team unveiled the signboard of the Lego authorized store. This store has special significance to Huang Guoqiang: "Haikou is the 100th city of Ledigan Group settled in mainland China."

Before the opening of Lego authorized stores in Haikou, some Chinese managers in China had just experienced a "plateau reaction". July 16th is the day when Lhasa's first Lego brand retail store was officially opened. These two new cities are not first -tier or quasi -first -tier cities in the traditional sense. Among the cities covered by Lego Group in the past two years, they can also see non -provincial capital cities such as Shanxi University in the central and western regions. Lego Group has obviously stared at China's "sinking market".

In the past two years, Xu Jie, vice president of Lego Group and general manager of retail operations of China, explained to the reporter of "China Economic Weekly" reporter: "We think physical retail is still the same as" China Economic Weekly "reporter. The most important shopping channels and platforms, physical stores can help consumers quickly discover new products and immediately get experience. In the case of permitted permission, consumers have higher enthusiasm for going to the store experience and huge demand. In the process of opening a store, when we found that when Lego Group entered the fourth and fifth -tier cities, the local consumers' understanding of our brand beyond imagination. In this regard Difference."

The Chinese market is also an important part of the global layout of Lego Group. According to the earnings report released by Lego Group earlier this year, in 2021, Lego Group opened 165 brand retail stores worldwide, of which 90 were in the Chinese market.

"Thanks to the production capacity support of the Jiaxing plant, in the past few years, the business of LEGO Group in the Chinese market has achieved strong double -digit growth. We are very optimistic about the development prospects of the Chinese market and will continue to expand the retail business in China." Huang Guoqiang smiled and told reporters.

It is understood that there are currently more than 350 brand retail stores in China in China, and before 2019, this number is less than 70, covering less than 35 cities. Since 2019, LEGO Group's store opening in China has increased day by day. According to data, in 2019, Lego Group established more than 140 brand retail stores in China in 2019. By the end of July 2022, 100 cities reached 100.

Xu Jie also revealed to the reporter of "China Economic Weekly": "According to the original plan, more than 80 new stores will be opened throughout the year this year. Despite the affected by the epidemic in the first half of the year, 50 new stores are still opened, basically consistent with the plan. . By the end of this year, there should be nearly 400 brand flagship store plus brand authorization stores. We have nearly 80 new stores every year in the past three years. In the future, we hope to maintain this speed. "

The relevant person in charge of Lego Group also revealed to the reporter of China Economic Weekly that the factory of LEGO Group in Jiaxing City, Zhejiang Province will usher in expansion. The expansion project will include a new elevated automated three -dimensional warehouse to increase the injection molding facilities and use it for processing Legao. The workshop workshop will increase the area of ​​42,000 square meters on the basis of existing, and will significantly increase the potential production capacity.

The reason for the price increase of Lego products is not just the price of raw materials

In addition to the faster and faster opening of the store, Lego Group has also started another unusual trend -price increase.

On the second day after the Lego Group swept the 100 cities in China, some products of Lego Group officially began to "increase the price" on August 1. It is understood that the "price adjustment" was announced as early as June. The "price increase" list summarized by a Lego player showed that from August 1, 2022 to 2023, a total of 112 domestic products will be adjusted upward. price.其中包括不少热门产品，“树屋”的官方定价将由1699元调整至2099元，上涨400元，约23%；“宝马摩托”的官方定价由1799元调整至2099元，上涨300元，约16%; the official pricing of "Frozen Castle" will be adjusted from 1899 yuan to 1999 yuan, an increase of 100 yuan, about 5%; the previous explosive "Lego bouquet" also increased by 100 yuan. Most of the price adjustment range is between 5%and 25%.

There are also many speculations about the reason for the price adjustment, and rising costs are currently the most mainstream. Ledigan Group also told the reporter of China Economic Weekly that the continuous rise in raw materials and operating costs has brought challenges to the global economy and has affected many industries. "Lego Group has absorbed the cost of rising to maintain the price stable for a considerable period of time. However, due to the continuous and rapid rise in various costs, we decided to increase the price of some products." According to public information The price was high between 2020 and 2021. Taking ABS as an example, from the end of 2020 to the beginning of 2021, its price is nearly 50%higher than the lowest point in 2019. To the normal range.

In other words, the reason for the price increase of Lego products may not just rise in raw material prices. Human costs, channel costs, and many marketing costs including offline stores may also be one of the causes of rising prices.

Some consumers take the opportunity to "play with trafficking"

It seems to be the main direction of the LEGO Group in China in China. But will the price increase will bring some chain reactions to the market?

Some domestic "replacement" products regard it as an opportunity. On July 30, TOP TOY, a subsidiary of Mingchuang Youpin, announced that its "Chinese building blocks" have been reduced by 5%to 25%. The price advantage of domestic building blocks is shown.

The relevant person in charge of Lego told the reporter of "China Economic Weekly" that Lego Group has a wealth of product lines and different price interval, suitable for consumers of different ages. With the development of economic development and the upgrading of consumption concepts, more and more and more and more and more are increasingly more and more. Chinese consumers want to get better products and shopping experiences.

The market's response to the price increase of Lego products is not aggressive. A consumer who lined up at Haikou Store told the reporter of China Economic Weekly that he felt that the price adjustment was within the acceptable range, but he still wanted to take advantage of Haikou Store. Open a few sets before the price increase. Another consumers who have authorized to buy Lego products in Chongqing Baffles Lego also revealed to reporters that price increases did not have much impact on him. Many people in the circle made money to make money. The out -of -print series, wait for the price increase to make the difference. According to him, many people in the circle of player products are "played by trafficking". Some senior players can judge which sets of market demand will be very high, so I buy two sets when I start. Play, turn around for a set of out -of -print and sell it, to buy Lego products when buying Lego products.

A Lego player also told the reporter of "China Economic Weekly" that Ledao's products do have the opportunity to make money: "I bought two sets of 70620 Ninja City, a set of play, and sold out after a set of out -of -print. At the time of the out of print, the price rose to 2773 yuan, and now the price has reached 5464.5 yuan. There is also 70751 Feitian Ninja Temple, which is 1541 yuan when it starts, and finally sold 3,000 yuan. These two are nearly doubled. "

The reporter also found many information about purchasing Lego products on social software and e -commerce platforms, and even the self -media that specifically followed the selling price of Lego products and helping authenticity. It seems that a stable industrial chain has formed a stable industrial chain. This industrial chain may ease the touch of price increases to end consumers to a certain extent.

(This article was published in "China Economic Weekly", No. 17, 2022)

The cover of the 17th issue of 2022 "China Economic Weekly"

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