Lego is stepping up its investments in digital taking part in experiences, ecommerce and sustainable packaging after outpacing rivals and rising its market share once more final 12 months.
The world’s largest toymaker posted revenues up 17 per cent to DKr65bn ($9.3bn) in 2022, whereas web income rose by 4 per cent to DKr13.8bn ($2bn) regardless of headwinds from rising uncooked materials, vitality and transport prices.
“We’re doing a variety of issues on the digital facet,” chief govt Niels Christiansen advised the Monetary Instances. “That’s the place we’re upping the funding. We all know very effectively methods to immerse customers into the Lego universe in shops. We’re working very arduous to create that feeling of entering into the Lego model universe additionally digitally.”
Lego has loved stellar development all through the Covid-19 pandemic as kids and adults alike turned to its vibrant plastic bricks. Its gross sales and web revenue have each elevated by two-thirds previously three years, leaving rivals corresponding to Mattel and Hasbro of the US behind.
In 2022, Mattel had revenues of $5.4bn and web income of $400mn whereas Hasbro had gross sales of $5.9bn and web earnings of simply $200mn.
The privately owned Danish group is forecasting a “normalisation” of development this 12 months with revenues anticipated to extend by a single-digit proportion, however it nonetheless expects to develop quicker than the toy trade.
“We anticipated that the expansion would normalise into this 12 months, and it has carried out so. We’ll proceed to speculate behind our momentum. Traditionally the toy trade hasn’t been too cyclical,” Christiansen stated.
Lego is benefiting from a collection of investments made by Christiansen after it had a small slowdown in development in 2017. He put cash into its model by increasing its product vary and opening a whole lot of shops in addition to launching units combining its bricks with digital apps. It’s getting ready to announce particulars of a collaboration within the metaverse with Epic Video games, recognized for the Fortnite online game, and is aiming to switch all fossil fuel-based plastic in its units and packaging by 2030.
Lego’s chief govt credited product strains corresponding to Metropolis with its police, fireplace and practice stations, and Icons with its wildflowers and fashions of the Titanic and Eiffel Tower for the toymaker’s robust development final 12 months. Virtually half of the merchandise it bought final 12 months — 48 per cent — had been new in 2022.
Lego is getting ready to open factories in Vietnam and the US in 2024 and 2025 because it capitalises on development outdoors its dwelling area of Europe. It additionally opened 155 Lego shops final 12 months, taking the overall to 904 because it tries to beat the weak spot amongst toy retailers that wrestle to lure kids away from digital units.
