Lego rides on its success

The world’s number one toy manufacturer is doing well, very well in fact: the group achieved a 16% jump in its net profit in the first half of the year. How can such success be explained?

Lego is the world number one toy with its small bricks. Why? Firstly because it is timeless, a bit like Playmobil. The brand was launched in 1949 in Denmark and since then, parents, who loved playing with it, have been buying it for their children from generation to generation.

What explains its success is above all the richness of its toy portfolio. The combinations are constantly renewed: in this first half of the year alone, Lego launched nearly 300 new products while continuing to sell well its flagship products, Lego City, Lego Technic and the Lego Icons range, which includes construction models of the Eiffel Tower and the Titanic.

In the 2000s, Lego experienced a major downturn. But the group remained in the hands of the founder’s family. And then, Lego experienced a boost in 2020. The lockdown boosted its sales like never before. Since then, the group has been gaining market share in a games sector that is growing slowly. Despite inflation, Lego’s sales have practically doubled in four years.

Another essential element of its success: its Star Wars and Harry Potter franchises keep it alive. It was by betting on franchises and films that Lego recovered in the 2000s. Since then, the group has also made efforts in digital with, for example, Lego Fortnite, the game that uses many of Fortnite’s visual codes.

A few days ago, Lego announced a partnership with Nike to develop products and content together, on the world of sport, starting next year. Finally, in recent years, Lego has sought to conquer new markets by opening new stores in Europe, the United States (where the group sells the most), but also in China, although in this country, the manufacturer has a little more difficulty.

With its plastic bricks, Lego is not very ecological and it is a real problem for the brand. It also promises to replace within ten years (2032) all petroleum-derived plastic with recycled plastic in its bricks. We will have to see if it will succeed because Lego has already made promises of this type and tested more than 600 different materials to replace petroleum-derived plastic, but without much success. And knowing that changing materials will cost it dearly, prices are likely to increase.