Lego and Tencent tighten partnership for momentum

Building a Lego toy and sharing one's creation with other children at a kid-safe online community is what "Lego Life", a social network for children aged under 13, expects to offer by working with Tencent to boost its digital footprint in China where its brick-and-mortar stores are thriving.

Lego Life was first launched by Lego Group in January 2017.

It is part of the announcement made on Jan 15 by toymaker Lego Group and online giant Tencent to renew their agreement to further strengthen and expand their partnership, to offer more creative and safe digital play experiences to children in China, according to Lego China.

In the next two years, the two parties will deepen collaboration in areas including video, games and digital child safety. They will explore opportunities to collaborate in the areas of digital social community, intellectual property and corporate social responsibility.

In addition to projects that have already been launched, the two will collaborate in the area of digital social community, including the development, publication and operation of a Lego digital social networking service and products for children and teenagers in China based on the design philosophy of Lego Life.

Development, publication and operation of software applications that support Lego toy sets are also included in the extended partnership.

"In the past two years, we have worked closely with each other and achieved impressive results in video, game and digital child safety that have been welcomed by Chinese children and families," said Paul Huang, senior vice-president of the Lego Group and general manager of Lego China.

Lego and Tencent first announced their strategic partnership on Jan 15, 2018.

Subsequently, the Lego Video Zone was launched on Tencent Video during the 2018 Children's Day in China, with over 2.1 billion views so far.

In August 2019, Tencent Games started beta-tests of Lego Cube, a sandbox game. To ensure a safe and healthy gaming habit for children, the game is connected with Tencent's parental guidance platform.

About a third of the world's internet users today are people under age 18. In China, the figure is at 20.9 percent.

In the transformative shifts reshaping the global toy industry, the Lego Group is stepping up investments to expand its global physical and digital footprint to reach more children around the world. This includes a focus on fluid play. New research showed that kids see no difference between physical and digital play and could shift effortlessly from one to the other.

Lego CEO Niels Christiansen said in the firm's financial report for the first half of 2019 that China is a strategic growth market for the Lego Group, with the company posting strong double-digit growth in consumer sales in the country. In 2019, the company has more than 140 stores in 35 cities and will continue to invest in China.

By the end of 2020, Lego expects to operate 220 stores in China, with further penetration into the country's second-and third-tier cities to reach more consumers.

Investing heavily in product renewal and innovation is what keeps Lego a leader in the global toy market. To celebrate the New Year of the Rat, Lego revealed new Lunar New Year sets such as the Lion Dance and Chinese New Year Temple Fair.

In another development, Merlin Entertainments, a global leader in location-based family entertainment, announced plans last November to open a Legoland resort in the Jinshan district of Shanghai. It will be the largest Legoland park in the world.

The British theme park operator has reached an agreement with the Jinshan district government, CMC Inc and the investment company behind the Lego empire, Kirkbi Inc, to invest an estimated $500 million in the resort. The project is not expected to open until after 2023.