BEIJING/COPENHAGEN (Reuters) – Danish toymaker Lego is teaming up with Chinese internet giant Tencent Holdings Ltd (0700.HK) 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 25-30 percent in 2016.
It is competing with Barbie maker Mattel Inc (MAT.O) and Hasbro (HAS.O), the firm behind My Little Pony, for a slice of the $31 billion toys and games market in China.
Tencent is Asia’s most valuable company with a market capitalization of $537 billion.
Last year, Mattel struck deals with Chinese e-commerce giant Alibaba Group Holding Ltd (BABA.N) and online content developer BabyTree to sell interactive learning products based on its Fisher-Price toys.
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.
In November 2016, Lego opened a factory in Jiaxing, China, which it expects to produce 70-80 percent of all Lego products sold in Asia.
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