Tide Play 2022: Make friends with uncertainty

Wen 丨 play generations

In just three years, the tide play market has changed from "wild consumption" to "wild entry".

Capital is hot, big factories are entering the game, and large and small brands are proliferating. In the past year, tide play related investment and financing has been active, including 52TOYS, Suplay, ToyCity, Mengqi Culture, Cat Cat Home, Looking for Unicorns, Kaitian Studio, LAMTOYS, Moyan Culture, QUEEN STUDIO, Modong Core and other brands to obtain financing.

A number of Internet companies personally laid out the layout. At the beginning of the year, Ali Entertainment tasted the sweetness on the blind box of "Country Love", so he personally went down, and in May, the official Xuanchao played the brand "Koi Na Fun" and opened flagship stores in Hangzhou and Beijing. Station B relied on the explosive terrier and platform diversion to create a "vegetable dog" explosion, and continued to increase the size in the e-commerce business member purchase. In addition, there are Xiaomi's model play APP, NetEase's NetEase big player APP, and Tencent, Xiaohongshu, Mihayou, Xiaomi, etc. use investment to add tide play tracks.

But the "trendy" river is not good, and so are the big factories. The "multi-tide" trend community that Pinduoduo launched in 2020 and the trendy e-commerce "Oh" that Tencent launched at the beginning of the year have faded out of the market before the waves; Baidu's tide play project with Tieba emoji IP has been stranded for only half a year. Under the horse racing mechanism, it is inevitable to catch the wind.

A large number of merchants flock to the blind box category and product flooding, and the homogenization phenomenon is serious. "There are not many postures left for the tide to play", which is a joke in the industry and a fact. If it were not for the tight supply chain at the beginning of the year and the tightening of power curtailment capacity in the second half of the year, there would only be more new products in the market.

Superimposed on the repeated epidemic situation, offline channels are restricted, and inferior products face slow inventory or even withdrawal. Starting in the second half of 2021, the industry began to shuffle and speculators receded. The industry predicts that in 2022, the industry will continue to adjust in stages, the overall growth certainty will remain the same, the market will enter deep competition and deepen the segmentation track, but the uncertainty of the epidemic is still there.

Tide play is different from the Internet traffic economy, and is not completely equivalent to milk tea, coffee and other pure fast moving consumer goods, it is more with the characteristics of the content industry, the development trajectory is a process of continuous breakthrough and re-breakthrough, when the blind box marketing can not sell a sense of surprise, only the core in the box can "feed" a large number of new generation consumer groups.

risk

Replication success is the lowest-cost shortcut. A large number of speculators see only madness, not risk.

When the product flows in the "permutation and combination" of explosive elements, the lack of innovation and aesthetic fatigue quickly consume the patience of fans, and the market quickly bid farewell to the era of "shipment is sold out".

Especially in the second half of 2021, the market staged a "reversal of the earth". "At the beginning of the year, I had to go to the door to ask for a cooperative brand, and in the second half of the year, the other party took the initiative to find it," revealed the person in charge of a retail channel.

White-hot competition has led to a series of shifts. Can't come up with powerful products, blind production, poor sales channels, no door for "planting grass", weak marketing, and finally inventory thunderstorms. Last year's Double Eleven, some brands used 9.9 yuan free shipping promotions, but it is still difficult to solve the inventory dilemma. Some speculators "paid tuition".

Some retail channels revealed that inventory risks mainly come from repeated epidemics, offline retail channels have to take measures to limit the flow or even close stores, consumption stagnation, sales difficulties, the expected sales scale has become the inventory scale, this pressure from the bottom up gradually from the channel end to the brand end.

Play Generation has learned from multiple brands that although competition is under pressure, inventory is still within the controllable range. Some brands revealed that compared with previous years, the 59 yuan traditional blind box does have a certain sales pressure, but it is almost no inventory for innovative categories.

Behind the inventory risk is the misjudgment of the market, the loss of control of the supply chain and the challenge of operation management. Some channel parties are also adjusting their procurement and marketing strategies, sharing risks and improving turnover efficiency.

"Wild entry" is accompanied by market chaos and also brings regulatory risks. From stationery blind boxes to pet blind boxes, some merchants use the guise of "blind boxes" to carry out illegal operations and even sell contraband.

The "2021 China Trend Toy Market Development Report" (hereinafter referred to as the "Report") released by the National Conditions and Big Data Research Center of the Chinese Academy of Social Sciences pointed out that "the marketing means of the problem blind box cannot 'endorse' the tide to play blind box and the trend toy", and the outside world is often accustomed to using the "blind box" to refer to the tide play blind box, and even draw the two equal signs, thus ignoring that the "blind box" is actually a form of product sales, rather than the trend toy itself.

First, the China Consumer Association named the bubble mart joint limited edition blind box launched by KFC. Subsequently, the Shanghai Municipal Bureau of Market Supervision for the first time to the blind box industry "set rules", formulated and issued the "Shanghai Blind Box Business Activities Compliance Guidelines", put forward the standardization of blind box price system, extraction rules, standard marketing speculation and other guiding rules.

The compliance guidelines stipulate that the unit price of blind boxes should not be higher than 200 yuan. The tide play brand had to abandon the blind box sales method and changed the blind box of the trend doll blind box, which was originally priced at about 400 yuan, to an open box sale.

A series of chain reactions are essentially the causal relationship brought about by the brutal entry and underwater flooding of the market. But the biggest risk does not come from the outside world - what does not match the rapid growth of the market scale is the internal troubles and long-term worries brought about by the immaturity and imperfection of the IP operation ability, operation management, and talent system.

Today's domestic tide play market is gradually detached from the traditional meaning of "artist design toys". The artist's core power has been greatly weakened, replaced by a younger design team, using social media as a weapon and relying heavily on marketing.

- Lack of a strong artist", "ten blind boxes and nine cuteness", losing the scarcity of personality expression, but also losing the ability to continuous, stable and mature artistic expression and output;

- Lack of in-depth insight into users, over-focusing on commodity, consumption and digital "weights and measures", ignoring the cultural leadership and growth of trends and art;

- In the short term, over-reliance on marketing operations, in the long term, lack of mature IP operation capabilities and artist brokerage systems;

- The blind expansion of the team, the loss of control and misjudgment in the operation and management, or the push of the company to the edge of the cliff.

increase

Over the past year, the expansion of the tide play retail channel has brought growth opportunities. "No business district no tide play", a city's high-quality business district will attract tide play retail to settle in, "containing tide play" is also an indicator of a high-quality business circle. IP theme pop-ups and beauty exhibitions have also become "basic models".

Taking TOP TOY as an example, more than 80 stores have been completed nationwide. X11, a subsidiary of KK Group, adopts the strategy of "one city, one store, one theme". They emphasize the sense of atmosphere and topicality, and the large space, all categories, and high value cater to the punch card culture of young people. In some business districts in first-tier cities, "three steps a drone, five steps a retail store, a pop-up exhibition every season", high frequency and high density release the sense of market congestion.

Is the tide play market saturated? This seems to be a common problem for both markets and businesses.

From the popular Lingna Belle, you may be able to spy a little bit. This original image hatched from Shanghai Disneyland has no huge story background, only cute shapes and behaviors, relying on "pinching emotions" to capture the hearts of thousands of girls in China, and quickly became popular on social media. A large number of fans went to the park to interact intimately, mass-produced toys were sold in the lottery, and players "held back to urine and blood" also had to queue up to buy.

Crazy inside the circle, marvel at the outside. The greater the voice of confusion and doubt, the more it proves that the underlying demand and potential are far from peaking, and it also proves that the relevant consumer market is still "niche" and "not understood".

Looking at the speed of light of the 2022 Winter Olympic mascot "Ice Pier": "Shell + Plush" shape is close to the people, coupled with the head of state, overseas journalists, athletes collectively bring goods, so that the ice pier after two years of silence to the top stream, not only stands on the hot search C position, the blind box with a unit price of 118 yuan is also "a box is difficult to find". This also confirms that cultural consumer goods can also have good performance under the new consumption correction cycle.

Returning to the tide play market, whether the market is warm or hot, bubble mart financial report is the most real indication. In terms of data, the company's retail revenue in a single quarter after listing still maintained a growth rate of 75%, and the gross profit margin was stable at about 50%. The operating profit in the first half of 2021 alone reached 487 million yuan; from 2018 to 2021, the revenue growth rate for the first four consecutive years maintained rapid growth.

Despite the fierce competition over the past year, most people in the industry remain cautiously optimistic. "The withdrawal of speculators is an inevitable process of market regulation", and the gradual withdrawal of "bad money" is a process of rough extraction.

In terms of data, the growth rate of the domestic tide play market is leading. In 2019, the domestic tide play market has exceeded 20 billion yuan, which is 2 times that of Japan and 6 times that of South Korea. It is reported that from 2015 to 2020, the compound annual growth rate of the tide play market is as high as 36%. It is estimated that the retail market size of China's trendy toys will reach 47.8 billion yuan in 2022.

SUN Yuanwen, CEO of TOP TOY, predicts that the tide play market will still grow at a rate of 30% to 50%.

Zeng Jing, founder and CEO of LAMTOYS, said, "The market demand still exists, the tide play market is still a market that relies on products, and the general direction of developing good products remains unchanged."

Bubble Mart tries to increase the unit price to maintain growth, but the high price will affect sales. It is difficult for the vast majority of other tide play brands to break the price system.

Price adjustment is not the optimal solution for seeking growth, focusing on IP operation training and seeking a diversified revenue structure is the key. In the short term, growth still depends on the mining of new categories, design power and interactive micro-innovation of gameplay.

On the basis of the traditional blind box, the culture of cute fun is refined, and the three categories of micro boxes, sound boxes and scenery boxes are divided, and new elements such as patchwork, accessories, and audio music are integrated, and have maintained steady growth in the past year. Liu Zicheng, CEO of Mengqu Culture, believes that the focus of the future market lies in "category innovation", identifying differentiated positioning through product differentiation, and establishing brand recognition in the homogeneous market.

A number of brands are also looking for blue oceans in the subdivision track. At the end of 2021, Bubble Mart invested in the collection toy brand Underverse, the brand's main collector's trend toy, and recently cooperated with NetEase Game "The Fifth Personality" to launch a joint trend doll. Australian artist Ashley Wood, the company's founder, has led several collections of mature trend puppets.

Trend dolls originated in Hong Kong, influenced by the "godfather of trend puppets" Michael Liu, the market brand is complex, the former ruinswork, ZEROWORKS, black13park and other brands, the rising star Come4Arts has also achieved rapid growth, Cooooople and so on in the way of cross-border tide brands debuted. However, most trendy dolls are highly priced and limited to distribution, making it difficult to form a scale.

Overall, the innovation of the "supply side" is still insufficient, and "not many people dare to eat crabs first." Last year, in addition to the explosive vegetable dog at the beginning of the year and the blind box of "Country Love", there was almost no topical out of the circle image. Although the sales scale of Bubble Mart's Skullpanda is directly comparable to Molly, the sales volume is larger than the volume. The image of China's original "bloodline" is still not yet atmospheric, and brands such as "National Wind Mecha" Modong Nuclear are still niche.

Lu Chong, CEO of Dreamscape Internet, who has successfully created an Internet celebrity "vegetable dog", predicted that in addition to the stable situation this year, new and old brands will face the diversification of young consumer groups and the focus of diverting the consumer market, and how to impress them with their own products still needs deep research by the brand.

If the tide play is classified as fast moving consumer goods, it is more like a content industry, it is highly dependent on originality, depth, and constantly provide a sense of gain, the surprise brought by the tide play is to output things other than the user's imagination, and identify with the cultural ideology behind the expression presentation. Toys are just an entrance, but few people are willing to take a step further.

Some brands believe that the bigger blue ocean outside of trendy toys lies in "collectible toys". However, the definition standards of collector-level products are vague and lack benchmarking fist products; in addition, the collection awareness of the consumer market has not been established, the sense of collection is flowing in slogans, and the performance of mass market collection is weak.

Zhong Chuan, founder of Queen Studios, who is known for his sculptures, believes that collectibles are the future development direction, and because the Chinese tide play market is still in its infancy, a new generation of fans is in a period of cognitive cultivation. Whether it is handmade, statues, movable, or trendy dolls, there is a lot of room for development and opportunities.

"Make friends with uncertainty"

The impact of the epidemic, the iteration of users, many "uncertainties" still exist. 2022 is bound to be a year of adjustment, but the faded impetuous tide play market has just begun. More and more brands are returning to rationality and refined operations.

An obvious change is that Bubble Mart's stores are becoming more "full", involving continuous optimization and adjustment of shelf displays, moving lines, and categories. The relevant person in charge of Bubble Mart revealed that this year, the company continued to deepen its cultivation in the fields of IP incubation, supply chain, online and offline channels, digitalization, etc., and increased its overseas layout, and has now settled in 23 overseas countries and regions such as South Korea, Japan, the United States, Canada, the United Kingdom, and Singapore. This also seems to confirm the company's CEO Wang Ning's concept of "respecting time and respecting management".

TOP TOY has a "respect for retail" attitude. TOP TOY CEO Sun Yuanwen revealed that the company's next step will be to improve the average quality of stores, "control the speed" of opening stores while reducing the number of suppliers, "focus on large partners and big brands, optimistic about their advantageous product capabilities and ability to resist risks."

In addition, TOP TOY is also waiting to see the sinking market, the company plans to establish the standardization of retail stores, from the decoration, service, design, cost control and other aspects of the integration of standards, the future does not rule out "half of the stores open in second- and third-tier cities."

For the first time this year, youchao played a large dealer conference to continue to consolidate its distribution network. Some companies have also adopted the method of restructuring their teams to "lighten up" in the coming year. Consolidating the city seems to be the solution to the fight against uncertainty.

Looking back at 2021, the biggest regret is the lack of China's "Ling na Belle". At present, there are still few effective attempts around IP content operations, and a large number of IP are limited to the battle of appearance and product, but the battle of mind and emotion is ignored. After all, it has touched people's hearts, is it still difficult to open the wallet?

A positive signal is that domestic enterprises continue to increase their willingness and confidence in originality, and pay more and more attention to cultural cultivation.

Bubble Mart recently launched Baoqu, positioning China's cutting-edge designer incubation platform, planning to tap emerging potential LEVEL IP, and help IP rapid marketization through Bubble Mart's supply chain capabilities. Unlike bubble mart stores, Ituerantia will open up more space for solo exhibitions, traveling exhibitions and art signings.

X11 is also trying to explore the space of trend culture, helping to foster China's original IP, and promoting trend culture to the whole country in the form of establishing urban landmarks.

Just in January, TOP TOY released an EDG co-branded partnership, pointing directly at the e-sports user market. TOP TOY attempts to seize different trend elements to achieve fan circle breaking with cross-border, and does not rule out cooperation with automobiles and catering in the future.

The boundaries of trend culture are infinitely extended, and "hot selling" and "breaking the circle" are just a cut-off point, which is a wave that surges in the great rivers of contemporary culture and consumption.