The blind box market is not the world of Bubble Mart. According to Frost & Sullivan’s data, the market size of China’s trendy toy retail has grown from 6.3 billion yuan in 2015 to 20.7 billion yuan in 2019, with a compound annual growth rate of 34.6%. In 2019, Bubble Mart ranked first in China’s trendy toy market with a market share of 8.5%, and companies ranked 2 to 5 with market shares of 7.7%, 3.3%, 1.7% and 1.6%, respectively.
It is not difficult to see that the distance between Bubble Mart and the second is not great, which also means that latecomers are likely to take the lead at any time. In addition to Bubble Mart, brands such as 19 August 3, 52toys, IP Station, Twelve Dong Culture, and Cool Music Play are all players on the track. IPs such as Yixiang Town, LULU Canned Pig and UMASOU Dinosaur Girl are also big popular.
Ms. Liu told China Business News that she has indeed bought the most blind boxes from Bubble Mart so far, because Bubble Mart’s IP is better-looking, but when other trendy companies release cute IPs, she will also buy them. “(Purchasing behavior) will still follow the IP, not follow the bubble Mart.” Another blind box enthusiast, Miss Wang, also said that she would buy the styles with eye-catching sight, regardless of which company produced it. Blind box.
Therefore, even though Bubble Mart emphasized in its prospectus that it has an active fan group with extremely high stickiness, from the perspective of consumer mentality, this stickiness is actually more inclined to stick to certain IPs than to ” The stickiness of the brand “Pop Mart”. Bubble Mart also admitted in the prospectus that if Molly fails to maintain its current appeal to consumers, Bubble Mart cannot guarantee that it will be able to develop or identify an IP similar to Molly as a substitute, nor can it guarantee that it is based on The trendy toy products of the new IP can offset the decrease in consumption of Molly products.
Zhu Yue said that IP assets are the core assets and competitiveness of Trend Toys, as well as the core of building competition barriers. Cooperative IP is usually not exclusive. The IP owner can authorize IP development to multiple different partners. The category of IP product development has certain restrictions, and the time of IP cooperation has a certain period of time. At the same time, it needs to pay a higher price. IP usage fee. Self-built IP has stronger originality and control, as well as freedom of development and operation. At the same time, there is no need to pay additional IP licensing fees. Therefore, in the long run, self-built IP has certain advantages.
However, the contribution rate of Bubble Mart’s own IP income is declining year by year. The prospectus shows that the income contribution rate of Bubble Mart’s own IP has dropped from 89.3% in 2017 to 40.9% in the first half of this year. That is to say, the income of non-own IP accounts for the total income of Bubble Mart. The ratio gradually increases.
Although Bubble Mart believes that as the company continues to expand its IP library and the popularity of other IPs continues to rise, Pao Mart’s dependence on Molly will gradually decrease and future business will be sustainable. But on the other hand, in addition to the 12 own IPs, the remaining exclusive IPs and non-exclusive IPs have certain risks: As Molly’s revenue contribution rate is gradually decreasing, the revenue share of non-own IPs gradually increases. These non-own IP copyright owners withdraw the IP authorization, and Bubble Mart will undoubtedly endure a huge impact.
What is certain is that whether it is Bubble Mart or other blind box companies, they will continue to launch new IPs to create new stimuli to consumers. Shi Fanke told CBN reporters that Chaowan’s constant signing of new IPs and high-frequency listings are due to the short life cycle of IPs, and the core is to continue to change and trigger topics to ensure market attention. Take PaoMart as an example, the average life cycle of PaoMart’s standard blind box product series is nine months to two years, and consumers are obviously interested in new features.
Shi Fanke also said that the current trendy play company should be understood as an IP platform company. It is based on IP (tide play) and sells through interesting gameplay such as blind boxes and baby pumps, which weakens the traditional IP itself. Contains cultural value, but it strengthens the entertainment of the consumption process and makes the experience more satisfying. In this context, the establishment of brand loyalty relies on the company’s in-depth and extensive consumer reach. The company continues to maintain its loyalty with consumers through omni-channel layout, community building, and fashion exhibitions to improve the company Brand awareness.
And this may also be the advantage of the blind box new entrants to find another way. For example, MINISO (NYSE: MNSO) recently announced that it will launch the “TOPTOY” brand. The brand is positioned as a collection of Asian trendy games, mainly selling blind boxes, art trendy games, daily manuscripts, Meiman manufactories, Several core products such as doll models, assembled toys and building blocks. According to the prospectus of MINISO, as of June 30, 2020, MINISO has more than 2,500 stores in the Chinese market, more than 1,680 overseas stores, and more than 4,200 stores in more than 80 countries and regions around the world. The huge number of offline store channels can make up for the shortcomings of MINISO’s own IP to a certain extent, and seize consumers in the vast offline channels and even the sinking market.
In contrast, as of June 30 this year, Bubble Mart has 136 retail stores in mainstream business districts in 33 first- and second-tier cities in China, and 1,001 innovative robot stores in 62 cities in China. Its offline stores In terms of quantity, it is not as good as the MINISO products that come in through their own channels.
However, on the other hand, the proportion of Pao Mart’s online channel revenue has continued to increase, from 9.4% in 2017 to 40.9% in the first half of this year, surpassing retail store channels and becoming Pao Mart’s largest source of revenue.