As the blind box concept cools down and industry competition intensifies, today's 09992.HK is feeling pressure.
On December 11, 2020, the "First Share of Chao Play" Bubble Mart was successfully listed in Hong Kong with an issue price of HK$38.5 per share, and the first day of the sharp rise closed at HK$68.82 per share, with a total market value of more than HK$100 billion. Subsequently, in February 2021, its stock price reached a peak of HK$107.6 per share, and its total market value was close to HK$150 billion.
There will always be a downhill after the highlight, but the "downhill" of Bubble Mart has come "fast and urgent" - only three months after listing, Bubble Mart's stock price has been cut off from the highest, and has been stagnant for a long time since then.
At the beginning of January this year, a number of media reported that Bubble Mart and Beijing Chaoyang Park reached a cooperation, Chaoyang Park will authorize Bubble Mart to use the "European Charm" project in the park and its surrounding streets and forests.
That is to say, Bubble Mart will build a theme park in Beijing, and its founder Wang Ning also said in an interview with the media in the early years: "Bubble Mart has a grand goal, that is, to become the company most like Disney in China in five years." ”
The creation of a theme park may be an important step for Bubble Mart to become "China Disney", and it is also a new breakthrough for Bubble Mart, which is now stuck in a bottleneck.
However, Red Star Capital noted that the capital market did not seem to be buying the deal, and on January 28, Bubble Mart fell below the issue price to close at HK$37.7 per share. As of 18 February 2022, Bubble Mart closed at HK$40.45 per share, with a total market capitalization of HK$56.708 billion, and the market value has evaporated by nearly HK$100 billion at a higher point.
Building a theme park and building a Chinese Disney sounds beautiful, but in fact, Bubble Mart's Disney dream may be difficult to realize.
(i)
Hard-to-tear blind box labels
In recent years, Bubble Mart has been weakening its own blind box label. At the 2021 interim results conference, founder Wang Ning emphasized: "Before and after the listing of Bubble Mart, we repeatedly explained to people that Bubble Mart is not a blind box company, it is an IP-based tide play company. ”
Why is Bubble Mart so eager to draw a line with blind box companies?
On the one hand, the essence of the blind box is that consumers realize their sense of expectation and luck through the psychological expectations before buying the blind box and the surprise after opening the blind box. From a psychological point of view, consumers are actually buying the uncertain stimuli brought about by blind boxes. When the essence of the blind box was "debunked", the discussion about whether the blind box was an "IQ tax" has been continuous, and Bubble Mart has also been deeply involved in negative public opinion and consumer doubts for a long time.
On the other hand, the barbaric growth of merchant hunger marketing and blind box market has brought more and more consumer disputes, and the supervision of blind boxes is also constantly strengthening.
However, from the prospectus of Bubble Mart, it can be seen that the market equates Bubble Mart with the blind box, which is indeed reasonable.
According to the prospectus, from 2017 to 2019 and the first half of 2020, the revenue of Bubble Mart's blind box products was 91.4 million yuan, 359.6 million yuan, 1.3592 billion yuan and 689 million yuan, accounting for 57.8%, 69.9%, 80.7% and 84.2% of the total revenue of Bubble Mart in the same period.
Source: Prospectus
Since then, perhaps in order to further weaken the label of the blind box company, from 2021, Bubble Mart will no longer list the benefits of the blind box separately in the financial report.
But recently, Bubble Mart and the blind box have once again been pushed to the forefront.
At the beginning of this year, Bubble Mart and KFC jointly launched a 99 yuan Dimeo blind box package. There are 7 models of blind boxes, 6 regular models and 1 hidden version. According to media reports, in order to collect blind boxes, some consumers spent a one-time purchase of 10494 yuan to buy 106 packages; and some consumers bought "eating" services for "begging for babies", hiring people to buy and eat packages on behalf of them to obtain blind boxes.
On January 12, "China Consumer Association Named KFC Bubble Mart" appeared on the hot search. The China Consumer Association pointed out that KFC's sale of instant edible goods with limited blind boxes is to stimulate consumption through "hunger marketing", resulting in consumers over-purchasing in order to obtain limited blind boxes, resulting in unnecessary food waste.
Subsequently, on January 14, the Shanghai Municipal Bureau of Market Supervision issued the "Shanghai Blind Box Business Activities Compliance Guidelines", giving 20 compliance suggestions and drawing a red line for blind box sales.
The nature of Bubble Mart as a "blind box company" may not have changed at all, and now that the supervision has been strengthened again, for Bubble Mart, it is more challenging to "transform" to improve the revenue structure and change the image in the minds of mass consumers.
(ii)
It's not a good paradise business
So, is building a theme park a good choice for Bubble Mart?
The theme park is a project with heavy assets and a long return cycle, and it also tests the operational ability of the enterprise. To tell the story of China's Disney, Bubble Mart's first step is to cross a high threshold of funding.
Taking Disney as an example, public data shows that Shanghai Disneyland covers an area of 0.91 square kilometers with a total investment of about 34 billion yuan; in addition, Hong Kong Disneyland, which opened in 2005, has a relatively small total area of $2.8 billion in upfront investment, and only achieved its first profit in 2012 after seven consecutive losses.
Source: TEA/AECOM, Wikipedia, Company Announcement, Shenwan Hongyuan Research
Looking at Universal Studios Beijing, according to public information, the total area is about 4 square kilometers, with a total investment of more than 50 billion US dollars. According to the forecast of CITIC Construction Investment, Universal Studios Beijing will attract about 6 million to 7 million passengers throughout the year, and the number of tourists received annually after maturity is about 15 million to 20 million person-times, and according to the unit price of 1500 yuan, it will generate a turnover of about 25 billion to 30 billion yuan per year after maturity. According to this calculation, Universal Studios Beijing's return cycle also takes 4 years.
Of course, Disney and Universal Studios are both parks with their own halos, while more parks in China are in a long-term predicament.
According to the "Analysis Report on the Development Model and Investment Strategic Planning of China's Theme Park Industry" released by the Prospective Industry Research Institute in 2016, 70% of domestic theme parks are in a state of loss, 20% are flat, only 10% are profitable, and about 150 billion yuan of funds are trapped in theme park investment.
According to bubble mart financial report, as of December 31, 2020, bubble mart cash and cash equivalents of 5.68 billion yuan, although bubble mart's "European charm" park covers an area of only about 0.03 square kilometers, but bubble mart in IP construction, offline stores and other aspects still need to continue to invest, to build a system of theme park funds are still relatively tight.
In addition, in addition to the initial investment in the construction of the park, the park design, theme creativity, play mode and other aspects of the park throughout the hardware facilities and entertainment services, it is a test of the professional standards of the enterprise. For Bubble Mart, which has never had such an experience, the difficulties and challenges can be imagined.
(iii)
Bubble Mart without a story
When it comes to Disney, most consumers will think of classic IP such as Mickey, Donald Duck, and The Lion King, and the main reason why consumers go to Disney theme parks is the emotional connection between the stories behind these IPs and consumers.
Looking at Disney as a company, the core lies in taking IP as the starting point to form a closed-loop ecological industry chain of "content IP + channel + derivatives", creating a unique revenue model.
Upstream of the industry chain is Disney's content studio, which generates box office revenue and subscription fee revenue by producing animated and live-action movies and distributing content in movie theaters and streaming media platforms. The midstream of the industry chain creates the secondary value of IP by putting movie IP into entertainment assets, including movie CDs, theme parks and resorts. The downstream of the industrial chain is the expansion of IP derivative operations, that is, the development of derivatives, so as to realize the long-term value of content IP.
According to the financial report, in fiscal 2021, Disney's operating income was $67.418 billion, of which Disney's media and entertainment distribution revenue was $50.866 billion and theme park and resort revenue was $16.552 billion. It can be seen that theme park and resort revenue is only a small part of the closed loop of Disney's business model, and the driving force of this revenue is also based on high-quality content itself.
The embarrassing situation of Bubble Mart is that there is no IP in the air, but there is no step from the birth of content to commercialization.
Without a story of IP, it is difficult to impress more consumers. At the same time, the IP life cycle of Bubble Mart is short, and now the value of IP is constantly being lost.
The first is the "fall out of favor" of the explosive Molly. According to the financial report, Molly's revenue in 2019 was 456 million yuan, accounting for 27.1% of total revenue; in 2020, Molly's revenue fell to 357 million yuan, accounting for 14.2% of total revenue; and in the first half of 2021, its contribution to revenue fell to 204 million yuan, accounting for 11.5% of total revenue.
Another former blockbuster, PUCKY, has a surprisingly similar fate to Molly.
The new IP Dimoo created subsequently, the ability to absorb gold is also challenged. According to the financial report, in the first half of 2021, Dimo brought 205 million yuan of revenue, accounting for 11.6% of total revenue, while In the same period of 2020, Dimo's revenue accounted for 14.4% of total revenue.
It can be seen that the influence of Bubble Mart's core IP is constantly cooling down in the minds of consumers. The IP life cycle without a story is difficult to last, and the IP of Bubble Mart cannot retain the hearts of tide play enthusiasts, and it will be more difficult to be recognized by the majority of consumers.
brief summary
Chinese Disney does sound beautiful, but in fact, the business path and profit model of Bubble Mart and Disney are completely different.
Even if Bubble Mart wants to do a theme park, problems such as the difficulty of enterprises tearing the blind box label, the short core IP life cycle, and the slow input and output of the park have made Bubble Mart's choice questionable. "Disney of China" may have been doomed from the start.
Red Star News reporter Yu Yao Liu Mi
Edited by Yu Dongmei
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