The plant in Jiaxing, Zhejiang province, along with Lego's plan to set up a distribution center in Shanghai, will help Lego to react faster to the Chinese market, he said.

But Lego would not attract Chinese customers through price, given the brand's globally unified standard, Knudstorp said. The company's business will rely mostly on an expanding middle class and increasing awareness of early education.

"Chinese parents are concerned about their children's competitiveness to survive in society. Their focus is on the children's learning," he said.

"There is an opportunity for us because our products offer children something to learn when they play."

Ultimately, for better or for worse, the market will likely decide the ratio of high-tech and traditional toys parents buy for their kids.

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