Ai Weiwei had recently accused Lego of “censorship and discrimination” after the company refused to sell bricks to him for a 2015 exhibition. And according to BBC’s Celia Hatton, it was a controversial move given that “Ai Weiwei had used Lego before. He created a series of portraits of political dissidents that appeared at an exhibition in Alcatraz prison in 2014.” But after people from across the globe donated lego to the artist, Lego “adjusted” its bulk buy guidelines. “Previously, when asked to sell very large quantities of Lego bricks for projects, the Lego Group has asked about the thematic purpose of the project,” its most recent statement said. “This has been done as the purpose of the Lego Group is to inspire children through creative play, not to actively support or endorse specific agendas of individuals or organisations. “However, those guidelines could result in misunderstandings or be perceived as inconsistent, and the Lego Group has therefore adjusted the guidelines for sales of Lego bricks in very large quantities.”
Now, customers who intend to display Lego creations in public will be asked to make it clear that the company does not support or endorse the specific projects. This led to the BBC taking a closer look at why certain companies limited how much consumers purchased, with many giving the same answer. Luxury retailer LVMH has had its Chinese business undermined by bulk sales ferried into the country by so-called “daigou” agents, according to the BBC. It suggested that taxes and currency differences made luxury goods expensive in China, which in turn made daigou agents buy up luxury products in bulk in Europe and sell them on at home. Jean-Jacques Guiony, CFO of LVMH, said: “We’ve placed strict retail restrictions for the amount of products that people can buy. But, when you see someone in a store, you don’t know whether they are buying handbags for themselves or to sell them on to the market in China. We are trying to make sure we are not competing with our own products in the China market, but our actions are not entirely bullet-proof.”
While most of the examples given by the BBC hail from China, The British Retail Consortium’s external affairs adviser, Bryan Johnston, claimed that the risk of selling to customers and having your products turn up in someone else’s store is always high when you sell in bulk. There are, however, ways to prevent this, he said. For example, restricting sales. He added: “In the end, it is up to the individual store. It is in the gift of the retailer to decide on how much they want to sell to any one customer.” Share with your networkChinese artist and activist Ai Weiwei has won his battle with toy manufacturer Lego over the use of its products in his controversial art installations. Lego confirmed it has changed its policy on selling in bulk after its refusal to sell to Ai in 2015 made headlines around the world. Lego refused a mass order by Ai arguing it did not want its products to be used to make "political, religious, racist, obscene or defaming statements". It prompted the Chinese artist to accuse Lego of censorship and argue the Danish toymaker had bowed to pressure from Beijing as it is currently building a Legoland project in Shanghai.On 13 January, Lego issued a statement saying it will not ask for the "thematic purpose" of projects when processing bulk sales but that artists would be expected to indicate that Lego does not necessarily back the installations in which its products are used.
"As of 1 January, the Lego Group no longer asks for the thematic purpose when selling large quantities of Lego bricks for projects," it said."Instead, customers will be asked to make it clear – if they intend to display their Lego creations in public – that the Lego Group does not support or endorse the specific projects."Lego said its previous policy "could result in misunderstandings or be perceived as inconsistent".Ai is one of the most prominent critics of the Chinese government and the ruling Communist Party, and he was jailed in 2011 for his work, which has traditionally touched on sensitive topics including censorship, repression and Taiwan.He recently held a landmark exhibition in London and was embroiled in a row with Britain's immigration department after his six-month business visa was denied. The decision was later overturned by Home Secretary Theresa May.Ai had tried to buy a large amount of Lego bricks to use in one of his pieces in September 2015, having created Lego portraits of world leaders in the past.
After it was refused, the artist received hundreds of donations of Lego from fans who took to social media to criticise the firm.Ai said the proposed Shanghai Legoland, which was announced in partnership with Merlin Entertainment, was the real reason why the Danish company did not approve the deal. On Instagram, he wrote: "On Oct 21, a British firm formally announced that it will open a new Legoland in Shanghai as one of the many deals of the UK-China Golden Era."In response to Lego's decision to review the policy, Ai uploaded a picture of him with Lego pieces stuck in his hair and beard.Despite the controversy, the toy product is still hugely popular. The plastic bricks are a better safe haven investment than gold, according to an analysis by the Telegraph in December 2015.That hasn't changed -- the country still makes around 75% of the world's toys. But over the past five years, toy manufacturers in Mainland China have started to sell to an entirely new target demographic, much closer to home: lower-income Chinese consumers.
China itself is becoming a major consumer of toys. Market research firm Euromonitor International says retail sales of toys and games in China have been growing about 13% each year since 2008. In 2013, total sales were just shy of $20 billion. Euromonitor also predicts that in the next five years, China will be the fastest growing market globally for traditional toys and games. They say the market will grow 57% by 2018. John Liu, the Marketing Director of Zenit, a Chinese company that sells high-quality wooden toys, said that he first realized two years ago that there was a strong opportunity to sell in China. Zenit launched their product on the Mainland in 2013, and made $500,000 in their first year of operation. Now, China accounts for 20% of the company's export volume. Liu says it's simple: Chinese parents want higher quality, safer toys. Shaun Rein, the author of The End of Cheap China, said that businesses should work to harness the spending power of Chinese consumers. Many observers, he said, are "underestimating the purchasing power of low-income Chinese.
And more importantly, they're underestimating how wealthy they're going to be three to five years from now." Rein estimates there are 850 million Chinese workers earning less than $500 a month. Salaries are going up 15% a year, leaving them with more disposable income than ever before. Rein said toy purchases allow consumers to show off some of their newly-acquired status. "You have toys, such as Lego, that are doing very well. They're cheap enough that they're accessible for low-income Chinese. But they're expensive enough to get prestige." "So instead of buying a Louboutin bag, people buy Lego for their family members," Rein said. Lego is beginning to push its brand to second and third-tier Chinese cities, according to Euromonitor. The company has opened stores in 14 new cities -- including Xi'an, Dalian and Foshan. Lego has also increased investments in its education arm. Alice Tsang, an economist with the Hong Kong Trade Development Council, said the market is only going to grow as China loosens its one-child policy -- which means an extra 1-2 million babies born each year.