Despite an inflation-fueled sales slump that hit the toy industry in the first half of 2024, Lego managed to outperform its competitors, with revenue jumping 13% in the first six months of the year. Niels Christiansen, CEO of the Danish toymaker, attributed this success to the strength of Lego Icons, Lego Creator, and the partnership with Epic Games’ Fortnite. While other companies like Mattel and Hasbro reported declining sales, Lego saw an increase in volume, indicating that consumers are gravitating towards their products.
Lego’s ability to cater to a wide range of consumers, from children to adults, has been a key factor in their sustained growth. In addition to sets based on popular franchises like Harry Potter and Star Wars, Lego offers innovative design options for building flowers, succulents, famous works of art, and animals. This diverse product portfolio has resonated with consumers in the U.S. and Europe, where sales remain strong.
Expansion Plans in China
While sales in China have remained flat due to consumers spending less on bigger-ticket items, Lego is not giving up on the region. Christiansen emphasized the long-term potential of the Chinese market, with plans to open more stores in the country. Despite facing challenges in China, Lego remains committed to expanding its presence and capturing a larger share of the market.
Apart from its impressive sales growth, Lego has also focused on sustainability efforts, nearly doubling the amount of renewable and recyclable materials used in its bricks compared to the previous year. Christiansen highlighted the company’s investment in sustainable materials, emphasizing the importance of paying a premium to incentivize suppliers to develop more environmentally friendly products. Looking ahead, Lego aims to source half of its raw materials from sustainable sources over the next few years.
Lego’s success in the toy industry amidst challenging market conditions is a testament to its strategic product offerings, commitment to sustainability, and dedication to expanding into new markets. By continuing to innovate and adapt to consumer preferences, Lego has solidified its position as a leader in the industry and is well-positioned for future growth.