Block by block, a Canadian upstart may be eating away at Lego's lead in the so-called construction toys business.
In the current quarter, Mega Bloks' international sales will for the first time surpass those in North America, where they reached US$135 million last year.
And now, Marc Bertrand, the 37-year-old chief executive of Canada's leading toys producer, is gearing up for a major push by the company in Germany, the world's second-biggest market after the United States.
'We want to reach annual sales [in Germany] of up to US$75 million within three to five years,' Mr Bertrand said.
That means no less 30 per cent of Denmark-based Lego's dominant share of about 90 per cent of the market. The global construction toys business is worth US$1.4 billion annually.
So far, Mega Bloks holds only a 2 per cent share of the German market. But in February, Lego lost an important patent decision in the country, allowing business rivals to offer construction toys similar to the iconic Lego blocks.
Last week, Mega Bloks reported a first-quarter net loss of US$1.2 million, and the company's share price has fallen 20 per cent from last year's highs. Additionally, its US sales fell 9 per cent in the first quarter of this year.