Lotte’s “Tongkeun Block” Overtakes Original Lego

SEOUL, KOREA - Lego is the world’s No. 1 block building toy maker with its annual sales estimated at around 4.4 trillion won. It has sold 113.6 billion won worth of products in Korea last year, up 87.5 percent from a year ago.

However, the toy bricks that the consumers who visit Korea’s retail giant Lotte Mart purchased the most were not the one made by Lego but the “Tongkeun Block.”

“Tongkeun Block” is a toy block for children produced under Lotte Mart’s private label of the same name. Private labels, in general, refer to the products that major retailers outsource the production and sell under its own brand.

As a “me-too” good that copycat original hot-selling products, private labels are selling at typically lower prices.

The number of private label goods that overtake original products in terms of sales volume, is increasing as retailers are paying more attention to product quality. The sales of “Tongkeun Block,” for example, marked a robust year-to-year growth of 46.9 percent during the period from January to November 2013.