This week Lego made a big strategic move, announcing its second Asian plant will be built in Ho Chi Minh, Vietnam.
Vietnam spends around 15% of GDP on education, in China it’s just over 4%.
According to the Toy Zone, Lego is pretty pricey in Vietnam too, higher than Hong Kong.
Of course the two countries are at different stages of economic development.
Lego is a brand which is built on fun, creativity and learning; parental approval is very important in the purchasing decision.
Up to now, Lego has production sites in Denmark (of course), Hungary, Mexico, Czech and China. This week it announced a new plant in Vietnam, on a site just outside of Ho Chi Minh city.
I’m tempted to call it a Giga-brick factory and it will apparently mirror the design of other plants, focusing initially on moulding and packaging. It’ll also be carbon neutral with solar powered panels.
Up to now, most of Lego’s sourcing for Asia-Pacific has come from China, but this seems a strategic move to build a supply alternative, especially as Lego’s business in SE Asia is growing.
Vietnam has experienced huge growth in its plastics industry in recent years and has over 3000 companies involved in this segment. No doubt that was also a key ‘Brick in the Wall’ for Lego’s executives.