Domestic Building Blocks Set Off A Wave Of Flat Replacement

The trend is for tide brands to enter the block market, because blocks are the most promising category to break through the ceiling of the tide industry. As of 2021, the overall market size of building blocks in China is just over 13 billion RMB, compared to the global market size of 13.8 billion USD, the development potential is significant.

At the same time, compared with other tide play categories, blocks have the function of all-age happy stress relief, blocks + STEAM educational play is to make it jump out of the definition of toys, has a broader market prospects. For example, in the Chinese block classroom launched by TOP TOY, consumers can exercise hands-on skills by putting together blocks with parents and children.

However, in the Chinese block market, 48.6% of the market share is in the foreign brand Lego master. Founded in 1932, LEGO has built up a strong patent barrier with its first-mover advantage, which has rooted the brand in consumers' minds.

In addition, the promotion of plug-in blocks in China is still less than 20 years, Chinese blocks have just gone through the development process from imitation to originality, the domestic block market is relatively fragmented, the lack of market competitiveness of domestic brands relative to LEGO.

For one thing, due to the large number of brands, the level of quality of domestic blocks varies, and the blocks that used to be put together with a poor feel pulled down the impression of consumers on domestic blocks. According to Magic Mirror market intelligence statistics, from October 2021 to September 2022, the total percentage of poor reviews of building blocks in Tmall reached 8.4%, with comments on dimensions including poor quality, missing pieces, and building blocks too tight.

Secondly, LEGO covers a wide range of scenarios with its product line of 11 major categories and 87 subcategories, and strengthens consumer stickiness through the licensing of animation and film IP, car brand IP. The domestic brand IP reserve is relatively scarce, as a cultural and creative industry, the original IP incubation and more difficult.

Finally, domestic brands are also at a disadvantage in the channel, especially in the offline store channel. Although the retail industry has been emphasizing online transformation in recent years, but offline stores for tide play, block industry has an irreplaceable role.

Stores are a good medium for brands to get closer to consumers. Block lovers touch the product through the store, directly feel the quality of the blocks, more likely to generate consumer willingness and confidence in the brand.

LEGO's extensive fan base is inseparable from the construction of its offline channels, especially the expansion of second and third-tier cities and below. 2018 to 2022, LEGO's brand retail stores in China grew from 60 to 390, the strength of rapid store expansion is not available to most domestic brands.

Of course, a well-known feature of LEGO is that the product pricing is high. Lego thousand dollars or more products accounted for nearly 50%, while the domestic brand at this stage is mostly within 200 yuan of the low and medium price range products. For example, the little red book on the hot eternal flower blocks assembled toys, LEGO Tmall official guide price of 599 yuan, TOP TOY Tmall flagship store pricing but only 99 yuan.

Under the influence of the epidemic, the consumption structure changes, as non-essential consumer goods in the building block industry, the trend of localization of flat replacement.

At the same time, through TOP TOY's Chinese building block theme store experience, found that domestic building block brands have drawn closer to the distance of foreign leaders