Lego sees a building block in Asia

Its new S'pore hub is a step towards being physically present or close to core markets


WHEN Marko Ilincic gets his suits dry-cleaned, a Lego brick or two invariably falls out of his pocket.

"I always carry a couple of bricks with me," says the Lego Group senior vice-president and head of Asia-Pacific. "It's kind of a very peaceful thing . . . It keeps your hands busy, your eyes busy, and it kind of relaxes me."

As he snaps together and clicks apart two pieces - one blue, one white - he dishes an impressive fact: There are 915 million ways to combine six two-by-four Lego bricks.

It is exactly that sense of vast possibility that is spurring the family-owned Danish company to heighten its global footprint - especially in Asia.

On Friday, Lego launched its new facility for its Singapore office at South Beach Tower. At 56,481 square feet, it is close to three times the size of its former office, which opened in 2013.

The group has five main offices around the world, including its Singapore arm. In addition to its headquarters in Billund, Denmark, Lego also has hubs in Connecticut, London and Shanghai.

That Lego decided to base two of its five main offices in Asia reflects its ambitious plans for the region. In the first half of this year, the group's revenue increased 23 per cent to 14.14 billion Danish krone (S$2.89 billion) - with Asia posting the highest growth rates.

"Our ambition as a company is to reach as many children in the world as possible . . . And when you look at the Apac region, over 50 per cent of the world's child population is actually throughout this region," says Mr Ilincic.

But while Lego may be a household name in the West, it hasn't yet gained the same sort of traction in Asia.

"In terms of future growth and growth potential, we're actually reaching relatively few (children in those markets) right now," concedes Mr Ilincic.

In Japan, for instance - home to Bandai Co, the world's third-largest producer of toys after Mattel and Hasbro - Lego traditionally captures only a "very very low single-digit" market share.

Explaining why the group has gained less traction there than one would expect, Mr Ilincic says: "The reality is that Asia, up until more recently, has not had the amount of focus and investment that is needed to really penetrate and be successful in this market."

Indeed, Friday's launch of Lego's new Singapore hub is one block of the grand global plan. The Singapore office has 220 employees at present, although headcount is expected to double in the next two years.

A mix of global, regional and local roles are housed here, with employees spanning functions such as procurement, finance, consumer service and legal affairs. Mr Ilincic, as well as Loren Shuster, Lego's executive vice-president and chief commercial officer, are based in Singapore.

Said Mr Ilincic: "One of the things we have to do is to be physically present or close to (the markets we want to penetrate). Of course we've had our own offices in many markets across Asia for some time - but creating global hubs in Singapore and in Shanghai is really a milestone. It brings employees much closer to some of the core markets we see for the future."


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