Other construction toy manufacturers: Does LEGO really have something to worry about?

This is the recurring theme on social media: LEGO should be wary of the rise of several other construction toy manufacturers who are already doing better and cheaper than the Billund-based brand. The battle has supposedly begun, and the balance of power is already almost entirely in favor of the third-party brands.

What's the real story? Should LEGO really be seriously worried about these competing brands gradually eating away at its market share? That's certainly what a segment of influencers and media outlets funded by brands like Lumibricks, Pantasy, and CADA would have us believe. I think about this regularly, so here are a few of my personal thoughts on the subject.

I want to make this clear for anyone who might be convinced that I am "sold out" to LEGO, but that doesn't mean you should absolutely reject these brands. If you want to try some of these products, especially if they offer creations or licenses that you feel are lacking at LEGO, go ahead and have fun and draw your own conclusions.

But let's be serious, I think it's not tomorrow that LEGO will feel seriously attacked in its own market by these third-party manufacturers, regardless of their efforts to disseminate a well-rehearsed message through a whole network of new "fans" of these brands who never fail to remind us that LEGO is probably resting a little too much on its laurels.

Yes, LEGO undoubtedly tends to take advantage of its dominant position in the construction toy market, and one can hardly blame them. What leading manufacturer in its field doesn't, at one time or another, benefit from its position to rest on its laurels and maximize its profit margins in the process?

From the outside, LEGO does not seem to me to be in a truly defensive position against the organized assault of third-party brands that rely on an entire ecosystem of influencers and media to try to prove that their products are at least as creative, cheaper and technically capable of competing with the benchmark manufacturer.

Bricks of acceptable quality, no stickers, lighting provided directly in the product at Lumibricks, original designs, polished packaging and even various and varied licenses such as Mazinger, Dragon Ball, Astro Boy, Ulysses 31 or The Little Prince and Sherlock Holmes at Pantasy, everything is in principle in place for LEGO to start to seriously worry.

However, in my opinion, LEGO still has several steps ahead of these manufacturers who have only recently become "brands": its legend, its leading licenses, its distribution network, its perceived and real value and above all its minifig.

Unlike, for example, the very young Lumibricks, which just a few months ago was marketing its products under the Funwhole brand and which may well change its name again in the coming years, LEGO has a past, a history. The Billund-based manufacturer never misses an opportunity to tell the story of the Danish carpenter who, after a fire, chose to abandon wooden toys and turn to plastic.

We can then add the intergenerational aspect of LEGO products, the passing down of the contents of a toy box between parents and their children, and the large dose of nostalgia created over more than 90 years of existence. LEGO also makes sure to celebrate every possible anniversary of its products with a large number of sets regularly released in homage to a particular range or universe.

To this historical notion, we can add another "legendary" characteristic of LEGO products: they are toys that educate and train children, and many parents are convinced that if their children have DUPLO and LEGO toys in their hands, they will certainly become engineers or astronauts because they once built a plastic crane on the living room rug. We haven't yet reached the stage where parents believe that little Kevin will become Thomas Pesquet because he got a Pantasy truck for Christmas.

Lumibricks, Pantasy, CADA, Mould King, and others haven't yet reached that level of real or idealized credibility. These brands aren't truly established at the moment, and they don't have much to say at this stage of their existence, except, for some, that they started by borrowing ideas from LEGO in an attempt to gain a foothold. They have recently broken free from their desire to closely follow the Danish manufacturer by trying to innovate, and this is quite convincing for some of them, with products that are often creative and original.

However, some of them continue to regularly imitate LEGO by sticking to very trendy topics such as... Modulars, Objects lifestyle or the BrickHeadz format to take advantage of the trend under the guise of offering a more economical or more creative "alternative".

Others, like Lepin (now Mould King), have stopped simply copying the most popular LEGO products to gain respectability, but there are still too many products that are merely low-end versions of licensed LEGO sets, and this confusion doesn't benefit new brands trying to establish themselves in the construction toy market: for many customers, anything not made by LEGO is counterfeit. LEGO obviously won't make any effort to confirm that anyone can produce bricks without risking a lawsuit, which is understandable.

LEGO holds numerous licenses, and the most prominent ones logically turn to the market leader in construction toys when it comes to marketing licensed products. Disney, The Pokémon Company, and Nintendo currently have no interest in allowing Chinese brands that have seemingly appeared out of nowhere to exploit their licenses, risking devaluation in the process, especially since sales volumes will never be what LEGO is capable of offering.

However, some franchises are trying their luck, such as Bird Studio, which recently granted the Dragon Ball license to Pantasy, but without "real" minifigs to offer fans, it will be difficult to compete with what LEGO could have produced on the subject.

Some third-party brands have chosen to rely on the work of independent creators who, in exchange for royalties, allow them to market their creations. Why not? There are some lovely things, but this pool of creations doesn't allow them to seriously compete in a market where LEGO is present everywhere: online, in its physical stores, and through a multitude of retailers.

LEGO also has a head start in terms of product valuation: in the minds of many customers, buying LEGO guarantees they can one day resell the set without losing money because the secondary market is strong. Demand for discontinued LEGO products is high, and the brand's prestige is such that customers are willing to pay more for a used product than a new one. This may seem anecdotal, but few brands can boast of seeing their older products valued to this extent. It's unlikely that discontinued Lumibricks or Pantasy products will resell at high prices anytime soon; there is currently no credible secondary market for these emerging brands.

LEGO also retains an advantage that almost guarantees it can keep its most serious competitors at bay: the minifigure. It's the gold standard for figurines, the benchmark design used for many years and collected by countless fans. Nearly every possible license has benefited from the format, and no third-party brand will be able to quickly eclipse this figurine, some examples of which reach astronomical prices on the secondary market, making it even more desirable and sought after.

The LEGO minifigure also has a history, a past, and a virtually dedicated market of collectors who resell the bricks from their sets to keep only the included characters. The minifigures offered by other manufacturers aren't bad, but most remain more or less credible variations of the original minifigure, loosely inspired by the format still legally protected by LEGO.

The years during which the market for counterfeit LEGO products rapidly grew have instilled in many potential customers the notion that copying is illegal but ultimately not so serious. It will take time for consumers to distinguish between manufacturers who comply with the law and regulations and those who simply sell copies of sets designed by LEGO. The confusion won't disappear overnight, given that the LEGO brand has become a generic term for brick-based construction toys. We've always said "I bought LEGO," but we haven't yet started saying "I bought Lumibricks" or "I bought Pantasy."

We hear everywhere that these alternative brands are also cheaper and offer better value for money. This isn't exactly a feat; they have no choice but to lower their pricing ambitions. They lack the prestige of the leading brand and can't afford to match the prices of the Billund-based manufacturer, even if Lumibricks, for example, is attempting a high-end positioning with relatively high prices on some items. But they still need to convince customers to spend €200 at Lumibricks for a product that will be worth virtually nothing on resale, instead of €300 at LEGO for a set that will resell for at least its purchase price in a few years.

Competition is often a good thing; it pushes leaders to question themselves and challengers to constantly improve in order to compete. But we're not there yet in this case. In my opinion, it will take time and significant effort for third-party brands to truly push LEGO to its limits. This could happen a little faster if established, long-standing brands enter the market, as is currently the case with Mattel and its Mattel Brick Shop products. However, LEGO has extraordinary marketing resources that stifle the market, and it will take a lot of effort to exist even in the shadow of the Billund-based manufacturer.

Don't put too much stock in what TikTok, YouTube or Instagram are currently feeding you via your favorite influencers; the brand war hasn't started yet. Those who promote these free products still buy LEGO products for their personal collections, and LEGO currently maintains absolute control of the construction toy market as well as its own secondary market, particularly since the acquisition of Bricklink.

Like many of you, I don't want to resign myself to turning to these third-party brands, even though I dream of seeing LEGO sometimes question itself creatively and readjust its pricing policy to compete with real competition, but unfortunately that's not going to happen tomorrow.

Again, this isn't about disparaging third-party brands that are following in LEGO's footsteps and trying something in a difficult market. It's simply about putting into perspective a discourse that's very popular right now but, in my opinion, a little too optimistic. Time will tell if these brands, which are currently spending a lot of money trying to carve out a niche for themselves, will survive long enough to build a solid image and be able to challenge LEGO's dominance.