Blokees back to black on construction toy sales

Bloks Group, or Blokees, the Chinese construction-toy maker dubbed "China's Lego", notched its first interim net profit in four years in the first half of 2025, fueled by a surprise overseas sales boom mainly in Southeast Asia and North America.

The world's No 3 construction-toy brand and the largest in China by Frost & Sullivan's analysis, reported interim revenue of 1.338 billion yuan ($185 million), up 27.9 percent year-on-year. It swung to a net profit of 297 million yuan, reversing a 255 million yuan loss in the same period of 2024.

Yet the top-line gain marks a slowdown: It trails the 56.1 percent and 47.1 percent growth rates logged in the first half of 2023 and 2024, respectively. Domestic momentum now hinges on low-price products: Its 9.9 yuan Transformers: Starry Edition blind box mini-sets, launched in November, have sold 48.6 million units in seven months, raking in over 200 million yuan. The appeal lies in their formula — lower pricing, licensed IP and easy snap-fit design.

Overseas markets were the bright spots. In the first six months, offshore revenue jumped 899 percent to 110 million yuan, now accounting for 8.3 percent of total sales — up from 2.9 percent for full-year 2024.

Two regions led the charge — Southeast Asia, where revenue rose 650 percent to 57 million yuan (with Indonesia as the anchor), and North America, which saw a 2,100 percent surge to 43 million yuan.

The US success is notable because Blokees built its name on Ultraman — an IP that doesn't crack Circana's US top-10 list, which was dominated by Lego, Transformers and Disney. To adapt, Blokees leaned into leading Western IPs. It launched 273 SKUs featuring Minions, Sesame Street, Transformers and Marvel; and Legends in the first half, timed for the Toy Fair in New York. Priced at $3-$16, they undercut Bandai-Namco and Lego's $20-$200 range.

Channel strategy differs too as 70 percent of US sales are online, while 70 percent of Southeast Asia sales are offline, using local distributors and population density to push value products.

Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, believes the surge in overseas revenue is rooted in precise positioning and channel breakthroughs. "Blokees tailors IP-collaboration products to Europe, North America and Southeast Asia, weaving in local cultural cues to boost consumer affinity, while building multichannel reach — Amazon, TikTok and offline distributors — to hit target users fast," said Zhan.

Challenges have remained for Blokees as it has been dependent on licensed IPs as its own brands are still weak. The top four IPs made up 83.1 percent of first-half revenue(down from 92.3 percent for the top three in January-June 2024), but only two are in-house. One of its two biggest owned IPs, Hero Unlimited, contributed just 16.5 percent to sales. While the company added 13 new IPs and boosted research and development spending 69.5 percent to 129 million yuan during the period, it still relies on Minions, Transformers and Ultraman for near-term growth.

Other moves aim to expand its customer range. Its new 100-200 yuan sets appeal to adult collectors, lifting sales to over-aged-16 consumers to 14.8 percent of interim revenue, up from 10.4 percent in 2024.For girls under 14, it's shifting from action figures to scene-building sets using IPs like Ye Luo Li and Pokemon. Gross margins fell 4.5 percentage points due to higher tooling costs for the large number of new products and its 9.9 yuan line, but management said the trade-off is worth it for volume and brand reach.

Next, Blokees is betting on user engagement. It's rolling out its Blokees Fans Creation (BFC) contest across 150 Chinese cities in 2025 — parents already drive hundreds of kilometers for their kids to compete — aiming to replicate Lego's community model. It's leveraging a 450-plus dealer network covering all major cities and 80 percent in lower-tier markets.

The toys and games market in China has reached 420.8 billion yuan with a 7 percent increase in growth year-on-year, which was driven by increased demand from the kidult demographic, according to Euromonitor International.

Categories such as construction toys, dolls and accessories saw noticeable growth, while the more traditional toy demographics, such as baby and infant goods, saw declines overall, as the demographic is shifting toward electronic forms of entertainment such as video games and consoles. This growth shift signals a demographic change for the overall toys and games market, said the research institute.

Although Lego Group has continued to be the biggest player in the construction toys market for kidults, with its roster of over-18 Lego sets being popular with local consumers, the group's first-half results show that Lego made a recovery in China after a flat performance last year. Blokees has used big bricks, low prices and blockbuster IPs to compete with Lego. Now, the test is whether it can diversify its IPs to engage with more consumers, and keep innovating for both collections and entertainment, said Zhan.