Image source @ Visual China
Wen 丨 ten thousand point research, author 丨 Chen Silent
Toys are not unique to children, sell them to adults!
Tide play is a trend toy, also known as a designer toy, is a kind of art, trend, animation and other multi-element concept of toys, generally considered to be over 15 years old group of collectibles, with good appearance, social topics, collection value and other attributes.
There are currently four kinds of trend toys, namely art toys, blind box dolls, hand models, BJD toys (Ball-jointedDoll, spherical joint dolls), in recent years, The fastest growing in China is the blind box dolls, hand models.
In the domestic young people' group, how hot is the tide play?
According to Sullivan's report, the size of the world hipster play market grew from $8.7 billion in 2015 to $19.8 billion in 2019, with a compound annual growth rate of 22.8%, and the four-year compound growth rate after 2020 is expected to be 19.8%.
As the king of China's trendy toys, Bubble Mart was listed in Hong Kong in December 2020, and its market value once exceeded 100 billion Hong Kong dollars. Although the market value performance has fluctuated subsequently, the sales of Bubble Mart have increased all the way in the past two years, and the sales of Tmall flagship stores in April and May this year reached 52.25 million yuan and 39.08 million yuan respectively, an increase of 156.1% and 38.5% year-on-year, and only in the 618 activities achieved a brilliant result of 43.93 million yuan in turnover.
However, as a new category, why can the domestic tide play industry rise rapidly at this point in time? How much room is there for this industry to grow? What pitfalls will be encountered in the development of Bubble Mart? How to tell a new story that is not limited to the blind box, can Bubble Mart become the "Disney of China"?
To gain a deeper understanding of this industry, it is necessary to mention the origins of the tide play industry - Japan and the United States.
<h2>01, originated from overseas, prosperous in China</h2>
Trend toys (art toys) are designed by designers or artists, and then entrusted to factories to mass-produce or make their own works of art of different sizes and materials. It originated in Japan and flourished in the United States and Hong Kong in the 1990s.
When it comes to tide play, I have to say that Kaws and Be@rbrick (building block bears) who play the role of the originator.
In the 1980s, pop artist Keith Haring created his own style with simple graphic paintings, which was favored by the art circle and the trend circle, and the well-known Japanese toy manufacturer MEDICOMTOY noticed his work and collaborated to fuse art with trendy toys to create a new form of "tide play".
The street artist KAWS, born in 1974, continued graffiti art into a larger installation art and trendy toys, perfectly popularizing art and making it fun, and at the 2019 Hong Kong Sotheby's Spring Auction, KAWS finally dropped the hammer for 100 million Hong Kong dollars, breaking KAWS's previous auction record.
In a nutshell, trend toys = trend + fashion + art + design, that is, the charm and value of trend toys lies in the designer or artist to integrate his art style and concept into the toy, no longer limited to traditional art works, more in line with contemporary culture and trends, but also gives a higher collection value.
The tide play industry chain mainly includes three links: upstream IP acquisition and operation, midstream product design and production, and downstream product circulation.
The audience for trendy toys is mainly the well-educated younger generation. Judging from the portraits of tide play users, more than 50% of tide play users are between the ages of 19-30. The reason why domestic tide play can rise rapidly in recent years, the author believes that consumption ability, spiritual needs (feelings, interests), social and collection needs are the main driving forces for the rapid development of tide play.
From the demand side, the first is that economic growth has increased the consumption capacity of the masses. Due to the strong consumption elasticity of tide play, its growth and contraction are closely related to the economic strength of the country and individuals. For example, Kaws and Be@rbrick were born in 1999 and 2001, respectively, just when the per capita GDP of the United States and Japan exceeded $35,000. Coincidentally, in 2017-2018, when Bubble Mart rose rapidly, China's rapid GDP jump laid the material foundation for individuals and industries.
On the demand side, in addition to the influence of spending power, young people's emotional, social and collecting needs also play a key role. Because the tide play generally has a novel and good-looking design, it is easy to get the emotional recognition of consumers, in addition, many of the tide play products are derivatives of the pan-quadratic culture, because the younger generation of the group has a stronger "interest" and a rich "desire to express", so they are willing to pay a high premium for the hobby.
At the same time, under the development of social tools, tide play can not only highlight the personality characteristics of individuals, but also act as a topic for integration into the circle of friends, coupled with hidden and limited tide play has a certain scarcity, and through the design of the artist, it has a certain art collection value, which further promotes the consumer's purchase motivation.
On the supply side, as the core IP (IntellectualProperty) of the upstream and downstream industry chain in series, it is one of the important source driving forces for the development of the tide play industry. The IP of the tide play industry mainly has two categories: licensing and design. Content IP is based on literary, film, television, animation, games and other literary and creative works, such as One Piece and Pokémon; Molly, Be@rbrick belong to the design IP, and the demand for monetization has promoted the development of tide play.
In addition, China's mature toy industry chain has provided support for the outbreak of tide play. China is a major toy exporter, with 70% of the world's toys produced in China, with the United States being the largest importer, followed by the United Kingdom and Japan. Relatively perfect infrastructure and manufacturing capacity to ensure the finished product manufacturing of tide play toys.
<h2>02. Why has Bubble Mart become a local "tide maker"? </h2>
Copy the road of foreign giants, so there is a "way out".
According to the Frost & Sullivan Report, the global trendy toy market size is expected to reach $44.8 billion by 2024.
The toy industry has given birth to world giants such as Mattel (Barbie IP owner, USA), Hasbro (Transformers IP owner, USA), and Lego.
China also gave birth to the "first stock of tide play" Bubble Mart, whose market value once exceeded 100 billion Hong Kong dollars.
The outside world may not understand the connotation of tide play, do not understand why young people are crazy for a plastic toy, the disdain of outsiders and the love of young people form a strong contrast, and even once questioned the harvest of IQ tax.
The market is constantly questioning, and bubble Mart, which was once touted by capital, is also returning to rationality. As of October 22, Bubble Mart's share price on that day was hk$50.8, compared with the high of HK$107.6 after listing, its market value evaporated by more than HK$70 billion.
Although it is highly questioned, Bubble Mart still lives comfortably in its own segment. In 2020, the company achieved revenue of 2.532 billion yuan, an increase of 49.25% year-on-year, and a net profit attributable to the mother of 524 million yuan, an increase of 16.05% year-on-year.
In the first half of 2021, Bubble Mart continued the state of rapid growth in revenue and net profit, achieving operating income of 1.773 billion yuan, an increase of 116.8%; Achieved a net profit attributable to the mother of 359 million yuan, an increase of 153.8% year-on-year.
So, why bubble mart? Let's talk about the tipping point that makes the tide play so hot - the blind box.
In the past year, Bubble Mart has quietly changed in terms of category, size and tonality, and is also trying to tear off the blind box label, and even the expression of "blind box" can hardly be seen in the semi-annual report, which can be seen in trying to create a trend culture "ideal country".
But I have to admit that the low-price blind box is indeed the core password for Bubble Mart to achieve prosperity.
In November 2010, the first Bubble Mart offline store opened in Beijing, and because it initially followed the model of a Japanese LOFT grocery retailer, Bubble Mart, which had never found the golden key, had struggled for nearly 6 years.
Until the popularity of "American Blind Box" and "Japanese Blind Box", Bubble Mart saw a way to copy and copy.
American surprise dolls were born at the end of 2016, similar to the combination of Barbie dolls and blind boxes, the main target group is 3-14 years old children, which ignited the American boom as soon as it was released. On the one hand, the surprise brought by the blind box helps, on the other hand, the KOL's unboxed video on YouTube greatly increases the breadth of dissemination. It has topped the list of the best-selling toys in the United States for three consecutive years and won the "Best Toy of the Year" laurel at the American Toy Awards for three consecutive years.
Japanese gacha also has a similar form of sales, although the freshness has declined, the development of Japanese gacha has not declined in the later stages, and new entrants are constantly attracted to the gacha.
In 2015, a Japanese blind box toy called Sonny Angel exploded in Sales in China. This toy, which is only about 8 centimeters tall and has hundreds of styles, can be sold on average every 20 seconds at Bubble Mart. This allowed Bubble Mart to see the potential of the "blind box", an entertainment-oriented sales rule.
In 2016, Bubble Mart won the exclusive license of Molly and launched the first Molly Zodiac Constellation series in July of the same year, a set of 12 models, 59 yuan a piece, the low-price strategy lowered the threshold for consumers to buy. Since then, Molly has become an important IP for Bubble Mart. In 2019, Molly sold nearly 10 million units, and its sales reached a quarter of the entire company's revenue.
That said, Bubble Mart survived on the blind box economy that Molly brought. Why a blind box?
In fact, behind this is the use of insight into human instincts and psychology.
Users of blind boxes have reported that "the biggest pleasure of buying a blind box is the sense of anticipation of drawing hidden models and their favorite models, and the excitement of the moment when they really draw their rare dolls."
At the same time, under the rapid spread of the mobile Internet, consumers have more channels of contact, and various blind boxes of "planting grass" have indirectly promoted the rapid development of Bubble Mart.
<h2>03, what pits bubble mart encountered in the development</h2>
Blind boxes also have a life cycle, and their attractiveness is constantly declining.
Since the end of 2016, the American surprise doll has been on fire for 4 years, but after several years of strong growth, the freshness is declining, at the same time, Mattel, Hasbro and other toy giants have also entered the blind box market, launching the blind box of Barbie dolls and the blind box of the lost kitten, so the sales of L.O.L surprise dolls have been declining.
According to NPD Group data, such related products accounted for 12% of total toy sales in the 12 months to January 2021, down 5% compared to the same period last year.
When the freshness declined, MGA introduced large surprise dolls and added more "surprise" elements, such as dismantling the ball to dissolve in water, such as burying part of the jewelry in clay. In addition to products, MGA is also moving in the direction of pan-entertainment, actively carrying out IP licensing business and investing in animated movies.
Coincidentally, although Bubble Mart still maintained the growth of net profit in the first half of the year, its liquidity and efficiency were declining.
The data shows that the gross profit margin of Bubble Mart fell from 65.2% in the same period last year to 63.0%, mainly due to the decline in the gross profit margin of independent products. This should be seen as a "dangerous" signal, after all, its IP-centric independent products are the only revenue pillar of Bubble Mart, contributing nearly 90% of the revenue.
At the same time, compared with the level of 2017-2019, the inventory turnover days of Bubble Mart have only increased. As of June 30 this year, Bubble Mart's inventory turnover days were 74 days, compared with 78 days in 2020, compared with only 49 days, 45 days and 46 days in 2017-2019.
The "gambling" addiction of blind boxes has also been widely criticized. In order to get rid of the negative label, Bubble Mart never returned on the road of "copying".
Bubble Mart is also "getting bigger". At the beginning of June this year, Bubble Mart launched the MEGA Collection Series - "MEGA Treasure Series 1000% SPACE MOLLY × SpongeBob SquarePants" and "MEGA Treasure Series 400% SPACEMOLLY × SpongeBob SquarePants" two different sizes of handmade to seek high-end breakthroughs.
New players keep getting in, and they are also distracting young people from the "three minutes" heat. For example, MINISO premium has incubated TOPTOY, opened 30 stores in 20 cities across the country, and brought together 52 IP and tide play brands such as HelloKitty, Marvel, Disney, DC, and Naruto.
How long can the blind box still be on fire?
In fact, the core barrier of the tide play industry is not in the blind box, bubble mart is not the inventor of the blind box, the construction of competitiveness mainly lies in the vitality and operational capabilities of IP.
For example, Hasbro's revenue is mainly based on its own licensed brand products, followed by partner authorized brands. Own licensed brands include Transformers, Pony Pauli, MAGIC: THEGATHERING, etc.; Cooperative licensing brands include Marvel, Disney and so on. Emerging brands include Peppa Pig, PJMasks (Masked Pajamas) and so on.
Bubble Mart's revenue in the past two years has been mainly based on its own IP, followed by exclusive IP. Its own IP includes MOLLY, DIMCO, YUKI, etc., exclusive IP includes PUCKY, THEMONSTERS, SATYRRORY, etc., and non-exclusive IP includes Mickey Mouse, HelloKitty, DESPICABLEME, etc.
In 2020, Bubble Mart's own IP accounted for 39%, exclusive IP accounted for 28.3%, and non-exclusive IP accounted for 17.7%.
In Europe and the United States, Tide Play itself has also evolved from some anime works and movie characters, such as Marvel, DC, Disney, etc., with many years of fan culture precipitation; In Japan, Shio Play IP mainly comes from animation, such as One Piece, Naruto, Gundam, etc.
Whether it is Disney or Universal, most IP companies in the world are developing from content to derivatives. Content and story are proven to be important ways to build long-term emotional connections with fans. Even HelloKitty, who debuted as an image IP, eventually chose animation to prolong its vitality.
In short, constantly using other people's IP is a shortcut to quickly seize the market dividend, but how to extend the vitality of IP and give IP story attributes in the future will be the key to Bubble Mart's breakthrough this time.
<h2>04, summary: Bubble Mart wants to tell a new story</h2>
In terms of the contribution of per capita tide play consumption, China's per capita tide play consumption in 2019 was 2.1 US dollars, which was only 1/5 of the Japanese market and 1/6 of the Singapore market. In other words, there is still a lot of room for growth in the consumption amount and penetration rate of the Chinese tide play market population.
This seems to give Bubble Mart the motivation to continue to search for a new story – to build a pan-entertainment empire that belongs to China.
To this end, this year, Bubble Mart has invested in a number of brands with cultural attributes, including the animation creation company Two Points, more than 13 Hanfu brands, the pan-two-dimensional retail brand Cat Galaxy, and the trend buyer store Solstice. Through the layout of national style culture, IP incubation, trend design and other aspects, Bubble Mart is trying to build a complete ecosystem for IP. At the same time, on August 18, 2021, Beijing Bubble Mart Park Management Co., Ltd. was established.
Looks ambitious. Only, can Bubble Mart become the Chinese version of Disney?
In my opinion, Bubble Mart and Disney take the opposite path. Founded in 1926, Disney has used nearly a hundred years of accumulation to create content creation through media networks, theme parks and resorts, film and television entertainment, derivatives and games, creating countless classic characters such as Mickey Mouse, Donald Duck, Snow White and so on; Bubble Mart only establishes IP through the blind box, and its blind box dolls are IP without background stories, and the story needs to rely on consumers to fill themselves.
Although Bubble Mart, who is aware of this problem, has also begun to "tell stories", compared with the global Fantasy Kingdom Disney, it seems that it is difficult to become a "Chinese Disney" if it cannot adhere to the persistence doctrine.