Lego partners with Tencent which is Chinese internet giant to form a partnership to develop licensed games, videos, and other content for Chinese children and create potentially a new social network aimed at them.Later this year, one of those initiatives will likely be an online game.
Lego and Chinese internet giant Tencent which is one of Asia’s most valuable companies will collaborate across two fields which are a broad range of digital content and digital platforms, said LEGO’s spokesperson in a statement. On the Tencent video platform, LEGO video zone for children need develop the publication and operation of LEGO-branded licensed games, and all these are included in the scope of the partnership.
This online operation system also includes the publication and operation for LEGO BOOST which is a building and coding set that helps children bring their LEGO creations to life, and also can co-develop LEGO Life, a safe social network for children in China.
The partnership will create a dedicated area for kids so that they can watch Lego videos on Tencent’s platform, and the development of Lego-branded games as well. In June last year, the Danish toy-maker will also publish and operate Lego Boost which is a kind of robotics kit released that is simple, programmable and connected. The two companies will explore together the social networking platform Lego Life which is a Chinese version, and this kind of system is already available in other countries.
A step further that Lego partners with Tencent is significant for LEGO in tapping the Chinese market. LEGO’s group chairman Jørgen Vig Knudstorp said in September last year that strong growth opportunities in growing markets such as China, besides, chairman also announced its disappointing results for the first half of 2017. This is the first time that sales drop in more than a decade, which is revenue falling 5% to DKK$14.9 billion as US $2.38 billion year-on-year.
LEGO pointed out earlier that in the US and parts of Europe, the revenue in its established markets decline, but in the developing countries like China, its growing markets have grown by double digits.
As a matter of fact, the Danish toy-maker will still face competition which is from the maker of the famous Barbie dolls, Mattel, it is one of the biggest rivals in China. One of the biggest competitors of Tencent is the Alibaba which partnered with Mattel so that it can sell its products through its marketplace website Tmall.com in China.
A safe online eco-system which will be created by this partnership covers platforms, contents and experiences tailored for Chinese children. The LEGO Group Digital Child Safety Policy is what it will be designed to comply with which is developed with input from UNICEF, among others.
Lego has struggled in recent times and in a decade posted its first revenue drop, in September it was forced to cut about 1,400 jobs as sales dipped in the US and Europe. A bright spot for Lego is the market of China, it has eyed the Chinese market for years and a “unique opportunity for growth”is what the country offers. In May 2016, Lego opened the world’s largest store in Shanghai and has seen strong growth in the country. In the US and parts of Europe, the revenues growing double-digit versus declines in the first half of 2017, the last time it released financial figures. When it taps into the digital space, Lego will continue growing with the help of this partnership. As part of its global restructuring movement, two of its senior marketers exiting the APAC office in Singapore, which is one step of reshuffling senior executives around the region in this company. Rafael Scislowski who has now joined Uber resigned from LEGO Group’s senior director of Asia Pacific (APAC) regional marketing, and he plays the role of Uber’s marketing director of Southeast Asia. At the same time, Vera Ivanova has also left the company from the role of LEGO Group’s marketing director of SEA.
The general manager of Lego in China, Jacob Kragh said in a statement that more and more Chinese children know the world digitally, so a safe and imaginative digital Lego content is what they need and this partnership will bring them. In order to help stoke growth, it has been pushing further into China. Not only on Lego-branded games, but also on Tencent’s video streaming platform, Lego makes sure that there will be a “video zone” for children.
Lego Boost which is another partnership of Lego is a building and coding set that brings movement to its brick creations. A “safe social network for children” is what the two companies develop in China and they will explore co-developing Lego Life.
China is going to be the leader of the region’s toy growth. Western Europe has already been overtook by Asia Pacific which is the second largest region for traditional toys and games sales globally in 2014.
It is not like the industrial products like steel pipe which can only be used in the industrial field, even in our daily life, it will be placed in the basement, and what’s more, they are cool, they can not let people be crazy for it, it just a tool to help people live better. But toy is not, though they do not have blood and flesh, they can take part in our life, especially the children’s life. These toys will make children happy and that is what parents want to see. When their children are happy and smiling, parents will be happier than them as thousands times. So that’s what we say, it is the children bring the spring to China, only this kind of based consumers can bring the economy of China back to life, because they are not the steel pipe which is cool and can not see the sunshine from the sky.