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Lego to target Chinese market as it inks partnership deal with internet giant Tencent

Last updated: 07:10 15 Jan 2018 EST, First published: 12:10 15 Jan 2018 EST

kid surrounded by  lego bricks
Tencent is Asia’s most valuable company, worth a whopping £390bn

Toy brick maker LEGO Group is looking to China and the internet to help revive its slowing worldwide sales growth.

The Danish outfit has seen a slowdown in sales growth in recent years as kids move away from traditional toys towards apps and computer games.

Online games and possible social network for Chinese children

A rare bright spot has been China though, where sales grew by more than a quarter in 2016.

To take advantage of both the increased demand from China and 21st century kids’ attraction to the internet, Lego has teamed up with Chinese technology giant Tencent Holdings Ltd.

The two will work together to jointly develop online games and potentially a social network aimed at Chinese children.

It hopes this will help it compete with the likes of Barbie maker Mattel Inc (NASDAQ:MAT) and Hasbro Inc (NASDAQ:HAS) in the US$31bn Chinese toys and games market.

“What we are looking for now with Tencent is just to find more creative ways ... (of) reaching children, and creating bespoke content with Tencent, in this case, video games,” Lego’s China boss Jacob Kragh told Reuters.

Lega video zone for children

The partnership includes developing a Lego video zone for children on the Tencent video platform, as well as developing and operating Lego-branded licensed games.

It will also include Lego Boost – a building and coding set that lets kids turn their brick creations into moving objects – while the idea of a joint social network for children in the country will also be explored.

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