TLG's disappointing 2017 financial performance

[AmperZand]

Some explanation of LEGO's financial performance in 2017 from the BBC News site.

It was already known that the company had had disappointing sales in North America, but the article also points out over-production issues. There is a connection between poor sales and over-production of course, but some of the excess stock may be in addition to lower-than-expected sales.

If LEGO over-reacts in the opposite direction, i.e. cuts production too drastically in 2018, we could see stock shortages and sets being retired sooner than we have been used to.    

Here is LEGO's press release.

Edited March 6, 2018 by AmperZand
Added link to press release.

[Bricked1980]

Personally I think Lego try to diversify too much in to other areas like Video Games, Movies, TV shows etc. Maybe they should trim back on some of these extra things and concentrate more on their core product.

I don't think these problems are just unique to Lego though. I read that Hasbro and other toy companies have also been struggling recently so I think it's probably the same story across much of the toy market.

And I think the main thing that Lego has going against it is the price. A lot of parents just don't have as much money available to spend on toys as they once did. As far as I'm concerned there is nothing wrong with the current crop of sets that Lego have on the shelves. There are some real great ones for sale at the moment. Problem is that if people don't have the money then they just wont be able to buy them no matter how great they are.

[RetroInferno]

I would have liked to put the blame on Star Wars because ever since Disney took charge a clear price increase has been noticable and the sets produced relared to new content has been lack luster  IMO. But apparantly it's not the case.; Star wars sold within their expectations.

I think their ''movie + cascade of sets'' formula is losing wind fast, I think that both the Lego Batman and Ninjago movie didn't meet the jaw-dropping success the first Lego movie had despite their costs.

You can't year after year push soo many new products on the shelves; There's a whopping 42 items related for the Lego Batman movie available at the same time as your Ninjago movie with 33. They over-flowed the market hard with their movie going strategy. Those number of items are inflated because they take into account promo items and combo packs but the point remains. 

Sometimes ''fewer'' is better than more. 

 

 

[KotZ]

1 hour ago, Bricked1980 said:

Personally I think Lego try to diversify too much in to other areas like Video Games, Movies, TV shows etc. Maybe they should trim back on some of these extra things and concentrate more on their core product.

I don't think these problems are just unique to Lego though. I read that Hasbro and other toy companies have also been struggling recently so I think it's probably the same story across much of the toy market.

Certainly, especially with kids using gadgets now, but that's where LEGO (and other toy companies) sees (and thinks) they might have to go to continue being profitable. I do think they need to scale back a bit as they might be over-extending themselves.

[Robert8]

I think they definitely overestimated both movies Batman and Ninjago. 

But I'm not surprised. Their excuse to make a Batman spin-off was that "everybody loves Batman". They produced too much sets and they even just released a second wave of Batman CMFs

[MAB]

1 hour ago, RetroInferno said:

I would have liked to put the blame on Star Wars because ever since Disney took charge a clear price increase has been noticable and the sets produced relared to new content has been lack luster  IMO. But apparantly it's not the case.; Star wars sold within their expectations.

 

 

4

Presumably, this means that they have sold not as well as previously though, as it is not one of the top selling themes. It seems to be a case of saying one thing but probably meaning something else. After all, they could have expected their SW sets to remain a top selling theme, or they could have expected them to do less well this year as it seems many SW toys, not just Lego ones, are not selling so well now. The phrase they used tells the reader nothing.

 

1 hour ago, RetroInferno said:

I think their ''movie + cascade of sets'' formula is losing wind fast, I think that both the Lego Batman and Ninjago movie didn't meet the jaw-dropping success the first Lego movie had despite their costs.

You can't year after year push soo many new products on the shelves; There's a whopping 42 items related for the Lego Batman movie available at the same time as your Ninjago movie with 33. They over-flowed the market hard with their movie going strategy. Those number of items are inflated because they take into account promo items and combo packs but the point remains.

 

3

I agree there. TLBM has too many sets. I doubt many kids get them all. All those sets are in competition with each other for the same fanbase. They could half the number and probably still sell as much, while making other sets that appeal to other fanbases, although of course there will probably still be some overlap. Also sometimes you just see TLBM sets everywhere in a supermarket aisle, and walk past everything, even though there might be other theme sets there.

[Ankoku]

I wonder who actually got to see this discount?

"It said it had produced too many bricks, and had to sell off excess stock at a discount."

[deraven]

Purely speculative, of course, but I'm also inclined to blame the lackluster movies and their over-production of related items.  Clearly that's not the whole picture, but I think a big part of it when taking into account the internal design, marketing, and production resources devoted to that.

IMHO I think they're actually doing OK on balancing things like TV shows and video games (they have scaled those things back; cancelled Dimensions and Nexo Knights, etc.), but what they need to scale back is their feature film stuff.  Anecdotal, but certainly everyone I know had zero expectation for TLBM and TLNM to capture the same lightning in a bottle as TLM.  Folks I've talked to simply thought Batman would be amusing based on their unique portrayal of that character but without the staying power of TLM, and while Ninjago fans seemed to have reserved hope that their movie would be amazing, many didn't expect much and were still underwhelmed.  I kinda think an additional wave of TLM sets in the mix would have sold better.

I just hope they don't over-correct and drop the quality of the sets or get rid of the great "Expert" series stuff they've been doing (though maybe there are also too many gigantic sets which are either not selling well enough themselves or perhaps slowing sales of smaller sets as someone gets ready to take, for instance, the $800 plunge on the new MF).  I mean, the new Millenium Falcon, the re-release of the Taj Mahal, the large number of sets around $250 or, heck, even $100 and up as compared to years past - that seems like it could definitely create "over production" as those higher-ticket items move slowly off the shelves and also slow sales of smaller sets if people are indeed reallocating their money towards them instead.

[ShaydDeGrai]

2 hours ago, deraven said:

I just hope they don't over-correct and drop the quality of the sets or get rid of the great "Expert" series stuff they've been doing (though maybe there are also too many gigantic sets which are either not selling well enough themselves or perhaps slowing sales of smaller sets as someone gets ready to take, for instance, the $800 plunge on the new MF).  I mean, the new Millenium Falcon, the re-release of the Taj Mahal, the large number of sets around $250 or, heck, even $100 and up as compared to years past - that seems like it could definitely create "over production" as those higher-ticket items move slowly off the shelves and also slow sales of smaller sets if people are indeed reallocating their money towards them instead.

From the various articles I've read, I don't think the high-end sets and exclusives are really the problem.  I say this for a couple reasons.

1) The production runs on those kits seem to be limited.  For example the $800 MF sold out quickly and the four lego stores in my area each started "wait-lists" for people who wanted to be called when they got more. TLG itself send out a mailing asking people if they intended to buy it (presumably to get a sense of how many more they should make) and a second email (to those who'd responded to the first) when new orders were being accepted again.  I got mine promptly but five hours later a friend told me his attempt to buy one failed. So, I'm assuming that demand is exceeding supply for its target audience.

2) TLG has repeatedly cited excess inventory and old inventory clogging shelf space at third party retailers as part of the problem.  This largely lets exclusives off the hook because they don't compete in the same price range and/or aren't stocked at all by third parties.  I just don't see a dozen copies of poorly selling Expert series modular (if there is such a thing) burning precious retail shelf space for months on end. Even Lego Shops themselves just don't put out more than a couple copies of the high-end kits at time, they are just too easy to restock from the back room on demand; why waste prime eye-candy space on redundancy.  (now maybe you _do_ a point with respect to some people curbing their low-end purchases to save up for something big, and that _would_ slow inventory turnover, but that's also not a new thing; people do it all the time, even during TLG's most profitable years, so I don't think it's a major factor now).

3) TLG has also cited City, DUPLO, Friends, Technic and basic bricks/creator as star performers in a down year.  The only "themed" line that they called out as doing well was the Lego Batman movie.  Reading a bit between the lines, that implies to me that it was really the licensed stuff and the media tie-ins where supply was exceeding demand.  Such kits have always been the riskiest gamble with respect to an audience's short attention span. Something like the Emerald Night, or a Mini-Cooper, or a recognizable supercar is just a classic build that will always find an audience.  But if you guess wrong with something like The Lone Ranger, or The Prince of Persia, or other other "big promise" movies that had no staying power at the box office, you've got a problem because, like the movie tickets themselves a third of the total sales happen in the first two weeks.  Sure train AFOLs might grab want the train kit from TLR and western fans might love its stagecoach kits, but those are niche markets compared to kids who _loved_ the movie.  

Even the one-time savior of the TLG, Lego Star Wars, is not without its risks.  Granted there are a handful of iconic ships that will always find an audience, but it's been done and redone so many times that there are also a lot of kits that just aren't _that_ iconic anymore.  Perhaps the new Jabba's Castle isn't as cool as a previous version, or giant battle of Hoth is more just a bundle of smaller kits we've seen before, or this "exclusive" minifigure is _so_ exclusive you can't even remember which movie/tv show (let alone which scene) he actually was in or why you should care.

Now, clearly, those examples hail from several years ago but I think the concept still applies.  Last year there were dozens of Batman, Ninjago Movie, Star Wars, Ghostbusters, DC and Marvel Superheroes, Nexo-Knights, Dimensions, etc. sets vying for shelf space in front of eyes with short attention spans.  I find it a little too easy to believe that they overestimated the demand for impulse buys on properties that weren't as popular as they thought they were going to be when they started designing the kits.  Star Wars fatigue is setting in across the industry.  Physical toy stores are going the way of bookstores in Amazon's wake. And, the popularity of TV properties change faster than scandal headlines coming out of today's White House.

I think they need to remember their roots and focus on the building experience.  In the past, they've gotten themselves in trouble with theme parks, software, and toys that aren't "lego" (as we love it).  I think they need to be careful about over-playing their licensed/media tie-in hands and focus on growing wisely rather than quickly.  In that world, quality "expert" sets aren't the problem, they are (part of) the solution.

[Littleworlds]

When I look at the licensed sets that have been released in the last 12-24 months then I indeed get the impression that you can be really picky about which ones to get and you still wont have missed anything really. The number of sets seems excessive and the designs quite mixed. Some brilliant ideas go hand in hand with a lot of sets where my initial reaction was simply "seriously?". I think the prime example of these unnecessary sets was the Batman Spaceshuttle. That's so utterly uncalled for and not surprising me at all that a lot of the licensed sets stayed on the shelves.

I think a change in this trend is already coming though. The new Harry Potter makes a good impression regarding the set design and for the price value for the Hogwarts Great Hall as well.

I like the regular Lego themes a lot and for me that will always remain the core of Lego as a toy. As for licensed sets: fewer, but higher quality sets for a reasonable price seems the way to go here. Not flooding the shelves with randomness that got a licensed logo slapped on it.

[Peppermint_M]

Overstock is never good, it does result in the retailers selling off sets at a lower price just to clear shelf space. (Great for us fans, not so good for a business), You also have the case of failure on the part of retailers. Toys R Us is a major seller of LEGO but as we all saw, they have gone under and will be winding up and closing down.

Add in the fact that LEGO lines are competing with themselves within the product bracket, then against other toys and toys as a whole are competing with video games... It is a tough market and over-saturation means loss on profit.

[Bricked1980]

A lot of blame seems to go against gadgets, apps, video game and digital toys. I think Lego have always looked on these as being one of their biggest threats. These kinds of toys are nothing new though, I don't think these alone can be to blame for Lego's sales suddenly dropping over the last 2 years. 

Back around the turn of the millennium, TLG tried to branch out and re-structure themselves to compete with Video games and we all know what almost happened then.  I think if they try to modernise and diversify too much in to other areas then they run the risk of repeating what happened before when they almost went bust.  

I sometimes wish they would focus more on their core product, building sets, and stop trying to be something they are not. Releasing 2 expensive movies in one year is a bit of a risk and if they keep oversaturing the market with all this extra media and digital stuff then kids eventually get fed up. I don't think it does them any favors in the long run.

At the end of the day though I am not too worried about these reports on Lego's profits. A lot of articles we read online and in newspapers are pretty overbaked. As soon as the media hear that a company as big as Lego aren't performing as well then they attack like vultures and suddenly stories are being published that make it sound as if Lego are in real serious trouble.

At the end of the day though TLG have already started to take steps to correct these issues. It will be a couple of years before we see if this is working or not. And to put things in perspective, even though their profits are down compared to last year, I bet they are still higher than they were maybe 4 or 5 years ago.

[ShaydDeGrai]

11 hours ago, Littleworlds said:

(snip...) As for licensed sets: fewer, but higher quality sets for a reasonable price seems the way to go here. Not flooding the shelves with randomness that got a licensed logo slapped on it.

I can't agree more.  In my mind there's a good way and a risky way to do licensing and leading with a modest but high quality line across the price spectrum seems like the way to go.  A couple of "stocking stuffers"/impulse buys, a few mid-range kits and flagship model once (or twice) a year  for an unproven IP makes a lot more sense to me than three dozen largely forgettable kits that are mostly "background bricks" for some select mini-figure.  

If the line is successful and the property has staying power, plan to make more later, but the focus should be on quality rather than quantity.  Interesting sets with useful generic parts will usually find an audience even if the licensed lego means little to them, but if you bet on the IP alone selling a crappy set for you, and interest in that IP wanes, you're kinda stuck.

 

[Digger of Bricks]

Like with the last official report, TLG emphasizes their strong growth over in China, where they state they've had double digit growth in revenue in that market. I've said this before elsewhere, but I'm pretty sure TLG is going to take that into account when developing new product lines from here on. Heck, it just might be something that will influence the next "big bang" action theme that possibly will succeed Nexo Knights, rumored by some to be just around the corner for next year!

Quote

While revenue in established markets in North America and Europe declined in 2017, total consumer sales across a number of these markets improved, particularly in the final months of the year. The LEGO Group sees opportunities to return to growth in these regions and will work closely with retail partners to bring LEGO® play experiences to more children.

The Group also sees strong potential in China, where revenue grew high double-digits in 2017. It recently signed a partnership agreement with one of the country’s largest internet companies, Tencent, and has plans to further expand its presence in this strategic market. The company also will open an office in Dubai towards the end of 2018 to support efforts to expand operations in the Middle East and Africa.

 

[fred67]

22 hours ago, Bricked1980 said:

Personally I think Lego try to diversify too much in to other areas like Video Games, Movies, TV shows etc. Maybe they should trim back on some of these extra things and concentrate more on their core product.

I don't think these problems are just unique to Lego though. I read that Hasbro and other toy companies have also been struggling recently so I think it's probably the same story across much of the toy market.

And I think the main thing that Lego has going against it is the price. A lot of parents just don't have as much money available to spend on toys as they once did. As far as I'm concerned there is nothing wrong with the current crop of sets that Lego have on the shelves. There are some real great ones for sale at the moment. Problem is that if people don't have the money then they just wont be able to buy them no matter how great they are.

TLG had this problem a long time ago; they were spending a LOT of resources branching out to games, TV shows, and even the theme parks.  This is when they were operating in the red, 15+ years ago.  You know part of the reason they were able to turn around an impending bankruptcy is by licensing off all that stuff?  That means that, instead of trying to do it themselves, they let people pay them to do it for them.  Merlin Entertainment, for example, bought the theme parks (all but the one in Billund) and pays LEGO licensing fees to operate the parks.  The video games and TV/Movie production is not done by TLG, other companies bid for it.  TLG turned these revenue streams from losses to can't lose by doing it this way.

I personally think the year over year price increases are causing people to balk.  Never have they ever had so many $150+ sets for sale, including their most expensive set ever (which obviously isn't the problem, but only because they so limited the production of it).  The value of the sets my still be there (the price per part, or per weight, or whichever way you want to try to quantify value in LEGO sets), but the cost of the sets has risen dramatically while real wages in the U.S. (at least) have stagnated or even gone down.

My personal experience, as an example; I knew they weren't the greatest value, for example, but I didn't balk at spending $20 for the first architecture sets - now they are too expensive for me to try to keep up with, so I just stopped buying them.

When CMF started, after the first couple of series, I would just buy a case so that I knew I'd get some complete sets.  When CMF started, they were $2 (US) each.  The price went up 100% in less than 5 years.  Yes, it's stagnated, but now I only get the figures I absolutely want - much less than half of what I was buying before.

The sets have also largely been really disappointing.  The LOTR sets should have been one of the biggest themes (after Star Wars) LEGO has ever had, but they did a terrible job on the sets, overall, and I believe it's not the designers, but the management that really restricted what the designers were able to do, and they probably blew the budget on new pieces over substantial sets.

As far as Star Wars goes, as an OT fan, I've pretty much completely stopped buying anything at all - I don't need another MF, I don't need another X-Wing, or TIE Fighter.  The new sets compete with old sets I already have, so you're only getting collectors and new fans since the last wave, which was only a year or two ago, so how many could that possibly be?

Lastly, no company can expect the kind of growth TLG has had to last forever - there is always going to be a limit.  It was inevitable that they finally hit a period where things roll back a little.  Let's remember one thing - they are still the largest toy company in the world, they still have enormous profits and profit margins that are the envy of just about every other company on the face of the planet, toy companies or not.  They are still hugely profitable - they didn't take a "loss," they just didn't earn as much as they had been.

 

[bobasdad]

1 hour ago, fred67 said:

Lastly, no company can expect the kind of growth TLG has had to last forever - there is always going to be a limit.  It was inevitable that they finally hit a period where things roll back a little.  Let's remember one thing - they are still the largest toy company in the world, they still have enormous profits and profit margins that are the envy of just about every other company on the face of the planet, toy companies or not.  They are still hugely profitable - they didn't take a "loss," they just didn't earn as much as they had been.

Well said, fred67.  You summarized the issue perfectly, in my opinion.

[Robert8]

14 hours ago, Littleworlds said:

I like the regular Lego themes a lot and for me that will always remain the core of Lego as a toy. As for licensed sets: fewer, but higher quality sets for a reasonable price seems the way to go here. Not flooding the shelves with randomness that got a licensed logo slapped on it.

Actually, they seem to be going in the opposite direction: more licenses with less sets each. Like the Powepuff Girls theme, which is getting only 2 sets. Back to the Future is getting only 2 BrickHeadz

[MAB]

10 hours ago, Peppermint_M said:

Overstock is never good, it does result in the retailers selling off sets at a lower price just to clear shelf space. (Great for us fans, not so good for a business).

1

In the long term it is not good for fans either. Many supermarkets in the UK used to take most regular retail large sets. But 2013-14 saw many of them having to slash prices to move things like The Hobbit sets. Some were 50% within weeks of release, others were over 60% off - for example, Dol Guldur Battle was £25 (£70 RRP) within a month of release at ASDA. That led some of our big retailers to not stock all the large sets, although I think things are turning round again now and most are stocking big sets again even if just online.

 

[3797]

3 hours ago, Digger of Bricks said:

Like with the last official report, TLG emphasizes their strong growth over in China, where they state they've had double digit growth in revenue in that market. I've said this before elsewhere, but I'm pretty sure TLG is going to take that into account when developing new product lines from here on. Heck, it just might be something that will influence the next "big bang" action theme that possibly will succeed Nexo Knights, rumored by some to be just around the corner for next year!

China already has Enlighten's "War of Glory" line of sets and the quality of their bricks got shockingly good. Not sure how LEGO wants to compete with them but I wish them the best of luck. If they do end up focusing on China then maybe we'll finally get another Creator Expert train.

[MAB]

3 hours ago, fred67 said:

I personally think the year over year price increases are causing people to balk.  Never have they ever had so many $150+ sets for sale, including their most expensive set ever (which obviously isn't the problem, but only because they so limited the production of it).  The value of the sets my still be there (the price per part, or per weight, or whichever way you want to try to quantify value in LEGO sets), but the cost of the sets has risen dramatically while real wages in the U.S. (at least) have stagnated or even gone down.

The sets have also largely been really disappointing.  The LOTR sets should have been one of the biggest themes (after Star Wars) LEGO has ever had, but they did a terrible job on the sets, overall, and I believe it's not the designers, but the management that really restricted what the designers were able to do, and they probably blew the budget on new pieces over substantial sets.

 

1

Tying those points together, many of the complaints about the two waves of LOTR sets were about size. The Mines of Moria should have had more wall and was too open, Weathertop was too small, Shelob's cave was non-existent ... but personally I don't think they did too bad a job of them. They made sets for particular price points. The prices per part were relatively high, but especially the smaller half of the range were more about the minifigs, much like SH sets, and got better value (per part) for the bigger sets with relatively fewer minifigs. Then of course the ship was the other complaint. And the final complaint was that they stopped before Gondor. Similar problems with The Hobbit - the sets were essentially not very good scenery with nice minifigs, with Bag End being the one standout set. But at least the sort of completed the Hobbit in terms of locations and minifigs, maybe except the army builders.

I'm never sure how people really wanted them to do the interior of Lonely Mountain in an accurate way, or to do a Battle of the Five Armies and make it look realistic. Not without each set being equivalent in price to a UCS MF. Would LOTR and The Hobbit have been any more a success if all the sets were the size and price of Helm's Deep? Probably not.

I know the movies are often described (by their detractors) as "running around in nice scenery", but big scenery is hard to do with lego without going very big and costly as anyone that MOCs big displays knows. They concentrated on minifigs in a little scenery, hitting the right price points. My biggest disappointment with LOTR especially is not what they did but what they didn't, and comes mainly down to missing minifigs. Lack of walls in the Mines of Moria, or a lack of Gondor is possible if not easy to remedy by MOCing. The minifigs aren't, at least not to the standard of the existing minifigs.

I'm not really sure what they could have done at the time to improve it. It makes me wonder if LOTR came out five years later, would they have done it any differently based on what has happened in the meantime? Could they have gone down the Simpsons or Disney route and done maybe 2-3 really good D2C style sets (aimed at adults not kids), bolstered by a CMF line? Or the route they are taking for HP with a range of sizes of sets plus CMF. Maybe it would have been better, but who knows. The problem was really the source material, it was not that kid friendly and so CMF would probably not be a good idea, with poor sales compared to other CMF lines. So what would it need? Large sets with 20+ figures in each aimed at adults, costing probably the same as a Death Star? Probably still not good, and bad for the army builders too and has the problems outlined in your first paragraph quoted above.

[bonox]

I'm only a technic buyer so the movies don't influence me one way or another, but anecdotally I and many others i've spoken to though that Batman was a very poor lego movie. It was a kids story using batman characters, but from a lego perspective, it was just a movie where most of the bits had studs. Big deal - meh!

The lego movie on the other hand was all about the lego - the different themes, ideas about instructions versus doing your own thing, part identification numbers, seeing 'the matrix' of lego parts around you, and ultimately a battle of creativity between generations. That, at least to me, is what made it a lego movie and not a movie about a kid and his dad, and what encouraged lots of people to go and buy stuff - both kids and adults reliving their own past experiences on their own and with their children. The batman one was just a crap tie in, selling stuff to kids who'd probably go after anything related to a theme, whether lego or not. But in terms of the first lego movie, the merchandise was not only not substitutable by other types of toys, it was substitutable across the entire range of what TLG makes. You weren't restricted just to TLM branded sets, but the entire shelf of stuff at the local shop. It's not surprising to me that the focus on those movies with intent to sell merch may not have been particularly successful.

Edited March 7, 2018 by bonox

[Paul B Technic]

Good thing I have came back to help support the sales :)

[JLSD]

JLSD - "Goodmorning Boss"

Boss - "Goodmorning JLSD.  What can I help you with?"

JLSD - "I need a 8% raise in my salary..."

[Digger of Bricks]

4 hours ago, 3797 said:

If they do end up focusing on China then maybe we'll finally get another Creator Expert train.

How so? Are trains and locomotives a bigger deal over there than in Europe and the United States?

[3797]

16 minutes ago, Digger of Bricks said:

How so? Are trains and locomotives a bigger deal over there than in Europe and the United States?

I think so, yes:

https://en.wikipedia.org/wiki/High-speed_rail_in_China

Quote

High-speed rail (HSR) in China is the country's network of passenger-dedicated railways designed for speeds of 250–350 km/h (155–217 mph). In 2017 HSR extended to 29 of the country's 33 provincial-level administrative divisions and exceeded 25,000 km (16,000 mi) in total length, accounting for about two-thirds of the world's high-speed rail tracks in commercial service. It is the world's longest HSR network and is also the most extensively used, with 1.713 billion trips delivered in 2017 bringing the total cumulative number of trips to 7 billion.

...

High-speed rail developed rapidly in China over the past 15 years thanks to generous funding from the Chinese government, especially the economic stimulus program during the Great Recession.

...

Impact on airlines
The spread of high-speed rail has forced domestic airlines in China to slash airfare and cancel regional flights. The impact of high-speed rail on air travel is most acute for intercity trips under 500 km (310 mi). By the spring of 2011, commercial airline service had been completely halted on previously popular routes such as Wuhan-Nanjing, Wuhan-Nanchang, Xi’an-Zhengzhou and Chengdu-Chongqing. Flights on routes over 1,500 km (930 mi) are generally unaffected. As of October 2013, high-speed rail was carrying twice as many passengers each month as the country’s airlines.

https://www.telegraph.co.uk/news/world/china-watch/travel/china-bullet-train-expansion/