"The Lord of LEGO": Competitive Market of Building Bricks

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“The Lord of LEGO“:COMPETITIVE MARKET OF BUILDING BRICKS”

MARCH, 2016



TABLE OF CONTENTS

1.0 BUILDING BRICKS HISTORY & EVOLUTION

• BUILDING BRICKS TIMELINE

• LEGO HISTORY

2.0 EXISTENCE OF MARKET COMPETITORS

WITHIN THE CHINESE MARKET

• CHINESE COMPETITORS

• WESTERN COMPETITORS

3.0 PRICING DIFFERENCES IN CHINA

• PRICE COMPARISON WITH CHINESE BRANDS

4.0 INTERNET INFLUENCE ON BUILDING BRICKS

TOYS MARKET IN CHINA

• SOCIAL MEDIA PLATFORM INSIGHTS

• SEARCH ENGINE TREND

5.0 LEGO SUPER-FANS POSITIONING AND

BEHAVIORS

• TARGETING SUPER-FANS

• SUPER-FANS BUYING BEHAVIOR



“Asia is not a supply base, it’s a market and a growing market”

LEGO CEO: Joergen Vig Knudstorp



THE TIMELINE OFBUILDING BRICKS TOYS

1990 ~ Today

LEGO Founded

LEGO StartedInterlocking Bricks

LEGO: Leg GodtDanish forPlay Well

Mega BloksLaunched

Banbao,COGO, Sluban

Kre-O Launched

1960 ~ 1989

1930 ~ 1959

First Lego SetLaunched



LEGO HISTORY

From the launch of building bricks in the late 1790s

to today’s digital dependent society, building bricks

toys have survived years of evolution and are still

popular among children and adults. LEGO (乐高),

a line of plastic construction toys, was founded in

1949 and has gained popularity ever since. As the

leader and founder in plastic interlocking blocks,

LEGO has survived various competition and

copy-cats in the global market.

LEGO clone is a term that has been used by LEGO

fans referring to various brands of construction

bricks. Many LEGO competitors have produced

building bricks compatible with LEGO building

bricks and taking advantage of LEGO’s brand

recognition. LEGO’s consumer market in China

is subject to heavy competition. Chinese brands

such as COGO (积高), Banbao (邦宝), Sluban (小鲁班), etc. along with numerous Western brands

such as Mega Bloks (美高), Kre-O (酷垒), K’nex (科乐思), etc. form a highly competitive market in the

building bricks toys industry in China.



MARKET COMPETITORS

COGO (积高) Banbao (邦宝)

• China’s first domestic building bricks toy company

that is on the share market

• Founded in 2004, manufacturing toys

• COGO building bricks series: the most profiting

segment in the company

• A wide range of distribution channels

• Online channels: Tmall (天猫), Amazon (亚马逊),

JD.com (京东), Dangdang (当当), etc.

• Physical stores such as department stores,

supermarkets, wholesalers, etc.

• Launched in 2003

• Focuses on plastic building bricks’ innovation,

production, sales and service

• The company focuses and position itself on the

educational gain segment

• This positioning is strategic as it is highly valued

by Chinese parents

• Building bricks allow children to use their

imagination and creativity while playing



MARKET COMPETITORS

Sluban (小鲁班) Mega Bloks (美高)

• Sluban (小鲁班) is named after the founder of

China’s wood craftsman Luban (鲁班)

• Luban upholds the motto of attention to detail,

thinking, innovation, continuous learning, and

the spirit of excellence

• Sluban’s ambition is in positioning its products

among the high-end - high-quality segment

• Help develop mental excellence among children,

guiding them to develop interest in creative

design

• Mega Bloks (美高) is a Canadian children’s toy

company

• Construction set toys are the most popular line

of products in the company

• In 2014, Mega Bloks was ranked second place

in building bricks category

• Popular collection set include Halo (光晕),

Star Trek (星际迷航), etc.

• Popular children set such as Thomas & Friends

(托马斯和他的朋友), SpongeBob SquarePants

(穿方形裤子的海绵宝宝), etc.



MARKET COMPETITORS

Kre-O (酷垒) K’Nex (科乐思)

• Kre-O (酷垒) is a line of building bricks toys first

released in 2011

• Kre-O is from the Latin word “creo“, meaning

“I Create“

• Popular toy line includes Transformers (变形金

刚), Battleship (超级战舰), G.I.Joe (特种部队), etc.

• Launched in 1992 in the United States

• Forms models, machines and architectural

designs

• K’Nex originated in manufacturing building toy

components such as interlocking plastic rods

• The brand recently launched building bricks toys

to attract more consumers and further expand

itself within the construction toy industry

• Distributed through a variety of online channels

and offline channels worldwide



PRICE COMPARISONS:Price Comparsions Between the largest Police Set Construction Toys Offered By Each Brand

LEGO (乐高)

Sluban (小鲁班)

Banbao (邦宝)

COGO (积高)

¥3.38/

Piece

¥0.17/Piece

¥0.16 /Piece ¥0.16 /Piece

¥2998 for 783 Pieces ¥149 for 862 Pieces ¥399 for 2488 Pieces ¥69 for 403 Pieces



SOCIAL MEDIA

10,600 Posts // 345,000 Followers

23 Million Related Videos

667 Posts // 1 Million Followers


646,023 Related Videos


http://daxueconsulting.com.cn/?page_id=3327


http://www.twitter.com/daxueconsulting

http://www.instagram.com/daxueconsulting





SOCIAL MEDIA

• Generally, Western Social Media Platforms have

more subscribers/followers

• LEGO China’s official Social Media Platforms

generally have more posts than western Social

Media Platforms

• Youku (优酷) does not have as many related videos

as Youtube, one of the reason may be that there

are numerous popular, everyday videos sites other

than Youku in China, such as Tudou (土豆), Aiqiyi

(爱奇艺), etc., thus, users are more spread out

and are not as concentrated as Youtube.



SEARCH ENGINEER TREND

Google (谷歌):

• Keyword search on Google Trend with keywords

Lego, Building Bricks, Mega Bloks and Banbao

• LEGO have clear advantage over other search

keywords

• Lego experienced a steady increase since 2013

• Geographical illustration shows keyword

popularity among three large cities in China such

as Shanghai, Beijing and Guangzhou

Baidu (百度):

• Keyword search on Baidu Trend with the keywords

Lego, Building Bricks, Mega Bloks and Banbao

• Lego outperforms all other searches

• Similar to Google’s results, Lego experienced a

steady increase since 2013



LEGO SUPER-FANS

Collectors

Purchasing Power

Free Promotion

Through Fan Videos

Show Off Creativity

Online Video Posts

Show Off Building

Skills

Chinese Fans’ Patterns



LEGO SUPER-FANS

• LEGO only have one product: Building Bricks

• Advantage over other brands: Committed Fans

• They are adults with purchasing power

• In the children’s toy market, some series of LEGO

are too expensive for parents

• Brand recognition among children is not as

concentrated as it is for adults

• Majority of parents, under the same quality, will

choose cheaper brands, as kids playing with

building bricks often lost pieces and patience



LEGO SUPER-FANS

• LEGO’s vast amount of more expensive series is

purchased by LEGO super-fans

• A Weibo blogger, LEGO Collector (乐高居士),

have nearly 600 posts on Weibo on different

models and series

• Many collectors have over thousands U.S.

dollars worth of bricks, with different themes

and bricks. Many collectors post videos online,

this is promotion and advertisement for free for

companies

• Such videos are one of the reasons for the

sales of construction toys, customers can mix

and match multiple sets and can show off their

creativity and building skills



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"The Lord of LEGO": Competitive Market of Building Bricks

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