Toy Maker Lego Teams Up With Tencent

Danish toymaker Lego is teaming up with Chinese internet giant Tencent Holdings Ltd to jointly develop online games and potentially a social network aimed at Chinese children.

Privately-owned Lego has seen a slowdown in sales growth in recent years, but the Chinese market has been a bright spot with sales growing up to  25-30 percent in 2016.

It is competing with Barbie maker Mattel Inc and Hasbro, the firm behind My Little Pony, for a slice of the $31 billion toys and games market in China.

Lego said “Partnership with Tencent, China's biggest social network and gaming company, aimed to create a safe online environment covering content, platforms, and experiences tailored for Chinese children”.

Jacob Kragh, head of LEGO in China, said in a statement “We've seen more and more Chinese children engage with the world digitally, and the partnership will bring them safe and imaginative digital LEGO content that also supports their needs of learning, development and entertainment.”

Lego has about a 3 percent market share in China, followed by Mattel and Hasbro with around 2 percent and 1 percent, respectively, according to Euromonitor International.