Written | Nandu Weekly reporter Zhan Danqing intern Qin Chaoxian
Edit | Yang Wenjin
You, who love to buy blind boxes, have made Bubble Mart earn a lot of money.
On March 28, the "blind box first stock" bubble mart (09992. HK) announced its 2021 annual results, achieving operating income of 4.491 billion yuan, an increase of 78.71% year-on-year, and net profit of 854 million yuan, an increase of 63.29% year-on-year.
The annual report also shows that last year, more than 12 million "newcomers" entered the pit bubble Mart, and the number of members soared from 7.4 million to nearly 20 million.
While successfully attracting more young people to "enter the pit", the controversy surrounding Bubble Mart is also continuous: some blind boxes are caught in the storm of selling fakes; product quality is complained about; joint blind boxes are named by the China Consumers Association as wasteful of food...
In 2021, Bubble Mart's membership repurchase rate slipped from 58% in 2019 to 56.5%. Ruolin, a blind box lover of "abandoned pit" bubble mart recently, admitted that she was always nervously looking forward to it when she smoked bubble mart blind box in the past, but as the quality of the doll continued to decline, the expectations in her heart were slowly worn away.
It is not only Ruolin who complains that the quality of the dolls has deteriorated. On the consumer complaint platform Black Cat complaints, there are 7676 complaints related to Bubble Mart, and the problems are mainly concentrated in "defective goods" and "refusal to return".
If the blind box is removed, if the defective product is removed, who will be in a good mood?
Revenue growth slowed sharply
In 2021, Bubble Mart achieved operating income of 4.491 billion yuan, an increase of 78.71% year-on-year, although the growth rate rebounded significantly from 2020 (only 49.32% affected by the epidemic), but its revenue growth rate in 2019 and 2018 reached 226.80% and 225.95% respectively.
In contrast, the significant increase in membership is undoubtedly a huge bright spot, with 12.18 million new members in 2021 to 19.58 million. Members contribute 92.2% of Bubble Mart's revenue.
Young people who have become members continue to open the blind box in order to draw the desired style, and last year, Bubble Mart sold 705 million yuan for Molly alone.
Bubble Mart's veteran IP Molly sold 705 million last year.
The three self-owned IPs support the bubble Mart half of the sky.
The elderly IP Molly is still the most profitable, with a growth rate of 97.48%last year; Skullpanda, which only joined the bubble Mart big family in 2020, brought the most surprises, collecting 595 million yuan in the whole year, with a growth rate of 1425.64%, directly squeezing Dimoo into the position of the third; Dimoo earned 567 million yuan last year, an increase of 79.77% year-on-year.
Bubble Mart's revenue from different IPs, source financial reports.
However, compared with the past, the gross profit margin of Bubble Mart has declined, with a gross profit margin of 61.41% in 2021, 63.4% in 2020 and 64.8% in 2019. Bubble Mart explained in the financial report that this is to improve the quality of the product process, the product process is more complex, coupled with the rise in raw material costs.
Bubble Mart's many blind boxes are priced at 59 yuan and 69 yuan, and according to a rough estimate of 61.41% gross profit margin, the cost of Molly ornaments of 59 yuan is less than 23 yuan.
Young people are more keen to buy Bubble Mart offline. In 2021, Bubble Mart's offline channels contributed 47.8% of revenue, compared to 41.8% online. In the past year, Bubble Mart has strengthened the layout of offline channels, adding 108 stores with a total of 295 stores; adding 519 robot stores and 1870 robot stores. More than 60% of Bubble Mart's offline channels are distributed in first-tier and new first-tier cities.
At the same time, Bubble Mart spends more money on marketing. In 2021, its advertising and marketing expenses increased by 70.93% to $157 million.
Although Bubble Mart's revenue and net profit have both increased upwards, in the secondary market, it is not optimistic. In February last year, Bubble Mart's share price once soared to HK$107.6, with a total market value of nearly HK$150 billion, after which, Bubble Mart's share price fluctuated all the way down, and as of the close of trading on March 29, 2022, Bubble Mart was quoted at HK$33.35, and its market value shrank to HK$46.75 billion.
In this regard, Shen Meng, CEO of Chanson Capital, told Nandu Weekly that the correlation between Bubble Mart's stock price performance and performance performance is low, because the dominant factor in its stock price fluctuations is valuation, not performance, "Bubble Mart's price-to-earnings ratio valuation in the Hong Kong market is still high, indicating that there was a serious bubble in the valuation of Bubble Mart before, and now it is only in the process of value return." ”
By the blind box and Molly soared
In 2010, Bubble Mart opened its first store in Beijing Oumeihui Shopping Center, imitating the Hong Kong Chao play supermarket LOG-ON as a trendy grocery store. In the first five years of its existence, Bubble Mart was tepid.
Until 2016, Bubble Mart excavated the IP of Molly and launched it through the sales form of blind boxes, Molly became a hit, and drove bubble Mart's performance to soar.
Molly is a little girl with blue eyes and a beeping mouth, created by Hong Kong artist Wang Xinming. In 2016, Bubble Mart signed an exclusive licensing agreement with Wang Xinming. In the three years from 2017 to 2019, the revenue of Bubble Mart's blind box products based on Molly's image increased from 0.14 billion to 456 million.
In December 2020, Bubble Mart landed on the Hong Kong Stock Exchange, and on the opening day, the stock price opened more than 100% higher, and the market value exceeded 100 billion. Since 2019, Bubble Mart has won the first place in sales of Tmall's Double Eleven toy category for three consecutive years.
As of June 2020, Bubble Mart operates a total of 93 IPs, including 12 own IP, 25 exclusive IP and 56 non-exclusive IP. Through the "IP + blind box" operating model, Bubble Mart has boosted the attractiveness of its IP.
Many blind box fans said that what attracted them to buy blind boxes was the uncertainty before unpacking.
Ruolin first came into contact with the blind box after the end of the college entrance examination, and she felt that the blind box was fresh and exciting. The delicate appearance of the doll inside the blind box always stimulates her desire to buy again and again. In two years, she has purchased hundreds of bubble Mart blind boxes, which are still stored in the transparent display cases in her room.
The DIMO series blind box purchased by Ruolin. (Photo courtesy of Ruolin)
Office worker Ziqing registered as a member of Bubble Mart last year. This year's Spring Festival, she spent thousands of yuan to buy a complete set of blind boxes in the Bubble Mart Tiger Leap New Year series. Ziqing usually shops or online shopping encounters a heartwarming blind box style, and will place an order. Drawing the hidden model into the blind box can make her feel better throughout the day. She even felt, "As long as the quality of the blind box is good, it doesn't matter if the price is more expensive." ”
Ziqing purchased the 2022 Tiger Leap New Year series blind box. (Courtesy of Ziqing)
The post-95 generation is the main force carrying the blind box fever. The relevant report of Ai Media Consulting shows that in 2020, among the users who buy blind boxes, 38.4% of the post-95 users account for 38.4%, and 10% of the post-95 users have more than 50 blind boxes.
Compared with high-end tide play, the blind box type tide play purchase threshold is lower, such as bubble Mart's blind box unit price is as low as 59 yuan, which is more easily accepted by young people.
In 2018, 2019 and the first half of 2020, the sales revenue from blind box products accounted for 69.9%, 80.7% and 84.2% of the total revenue of Bubble Mart, respectively.
In order to increase the chance of drawing hidden funds and avoid drawing duplicate dolls, some consumers will choose "end boxes", that is, directly buy a complete set of blind box products, the most expensive price is a few thousand yuan, and the cheap one is also a few hundred yuan.
These rare hidden versions of dolls often become "fragrant" in the second-hand market. Bubble Mart released a Dimo rabbit series in February this year, the original price of the whole set was 899 yuan, on a second-hand platform price of 6666 yuan, the premium rate of more than 641.49%.
According to the data released by Idle Fish, there are currently more than 440,000 blind box players trading in Idle Fish, and the total amount of Idle Fish Blind Box transactions in 2020 will reach 1.683 billion yuan.
Blind box quality control has been repeatedly complained by players
Although the blind box has pulled the sales of bubble mart, bubble mart is intentionally associated with blind box cutting.
In the 2020 financial report, Bubble Mart has no longer separately announced sales revenue from blind box products. Bubble Mart CEO Wang Ning has also publicly stated many times that Bubble Mart is not a blind box company, but an IP-based tide play company.
What is visible to the naked eye is that the blind box has repeatedly let Bubble Mart fall into the vortex of controversy.
In January this year, the China Consumers Association criticized the blind box jointly launched by Bubble Mart and KFC for inducing excessive consumption of food. The probability of the emergence of the rare model of the blind box of the package is 1:72, in order to draw the rare model, some consumers spent 10494 yuan to buy 106 packages. In response to the criticism of the China Consumer Association, Bubble Mart responded: "Suspend all custom blind box business to eliminate possible food waste."
Still in January, after many consumers purchased the blind box of the fifth generation of bubble Mart Skullpanda,000 night city series, they found that the hidden model was flawed and asked to return to the factory for replacement, and the result was rejected by the official customer service on the grounds of "not matching the genuine product", and asked consumers to provide unboxing videos or send back videos as evidence. The invisible rules of the identification process put fans in a dilemma of rights protection, but Bubble Mart finally admitted that "genuine products were counterfeited" or because the company's products were produced by two different factories, resulting in a misunderstanding.
Skullpanda's fifth generation night city series blind box (Source: Bubble Mart Tmall flagship store)
In December 2021, Bubble Mart was fined 200,000 yuan by the Beijing Chaoyang District Market Supervision and Administration Bureau for false publicity of a long sock blind box product. A little further forward, in December 2020, Bubble Mart was exposed to the illegal operation of 5 clerks of the MixC store in Jinan, and the blind box was sold for the second time, after which Bubble Mart admitted that the situation was true and dismissed the employees involved.
Bubble Mart's "heavy marketing, light quality" business model has dissuaded many fans.
Ruolin complained to reporters that Bubble Mart's blind box "has become more expensive and smaller." The bubble mart blind box dolls she recently purchased often have potholes in the surface or roughly painted.
"I've seen What Bubble Mart used to look like, so I can't accept it as it is now." As a former loyal fan, Ruolin was very disappointed in Bubble Mart and decided to quit the pit.
The reporter's search found that on the Little Red Book, there were more than 9,400 notes about the "Bubble Mart Flaws."
In terms of black cat complaints, there are 7676 complaints related to Bubble Mart, and the problems mainly focus on "defective goods" and "refusal to return".
Analysys analysis brand retail industry senior analyst Li Yingtao told Nandu Weekly reporter that the key to the popularity of the domestic tide play brand is marketing drive, multi-channel coverage, fresh gameplay and excellent product design, these four points of bubble mart basically did, which is an important reason why it leads other domestic tide play brands, "but if it only stays in marketing and play, or is limited to the single category of blind boxes, it will form a development inertia, resulting in lack of stamina." ”
Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, told Nandu Weekly that in the process of enterprise scale, customer complaints for retail products are inevitable. If the proportion of problems in a company exceeds 10%, the company will face serious risks. Controlling the problem to a reasonable proportion is the key to creating a healthy business model.
The supervision of blind box sales by relevant departments is gradually becoming stricter. On January 14, the Shanghai Municipal Bureau of Market Supervision issued the Shanghai Blind Box Business Activity Compliance Guidelines, which stipulates that the price of a single blind box generally does not exceed 200 yuan; hunger marketing or speculation must not be carried out; and the sale of blind boxes to minors under the age of 8 is prohibited.
Tide Play Track gives birth to 4 new enterprises every day
Bubble Mart, which has been criticized for quality control and has slowed down sharply, is facing an increasingly competitive market.
According to the data of Tianyancha, in the past five years, the registration volume of mainland tide play-related enterprises (all enterprise status) has shown an upward trend year by year, and the annual growth rate has remained above 30%. In 2020, for the first time, more than 300 new tide play related enterprises were added; in 2021, the number of new enterprises increased to about 1470, that is, an average of 4 tide play related enterprises were established every day.
Tide play business number. (Source: Sky Eye Check)
More and more star companies have emerged in the tide play market. Top Toy, a chao play brand under Mingchuang Premium, is accelerating its store opening, with 89 stores as of 2021, and revenue reaching 130 million yuan in Q2 of fiscal 2022, an increase of 20% month-on-month. In September 2021, 52 TOYS won the largest financing in the tide play market last year - 400 million yuan of Series C financing. In addition, tide play IP companies "model culture", "Amazing Panda", "mountain and sea tide play" and so on have successively obtained millions of yuan to tens of millions of yuan of financing.
In the face of fierce opponents, Bubble Mart is also exploring a diversified layout to extend the lifeline of IP.
In March 2021, Wang Ning, CEO of Bubble Mart, said that Bubble Mart will gradually develop theme parks and content business, and intends to build Bubble Mart into "China's Disney". In January this year, Bubble Mart's first offline park project landed, and Beijing Chaoyang Park will authorize Bubble Mart to use the "European Charm" project in the park and its surrounding streets and forests. This means that Bubble Mart will use Chaoyang Park to test the waters for its theme park on a small scale.
In order to broaden the consumer group, in the past year, Bubble Mart has joined hands with beauty brands such as Coyan's, Sephora, L'Oréal, Little Odin, and Tangerine to enhance its brand image.
Li Yingtao told reporters that Bubble Mart has channels and the support of good performance, which has proved its ability to incubate IP. Bubble Mart's IP mostly comes from some small studios, designers or artists, these IP licensors need Bubble Mart's channels and platforms to enlarge their design into products, in this case, Bubble Mart has a strong right to speak, so this IP operation model has a certain degree of sustainability.
However, in Li Yingtao's view, Bubble Mart's current strength cannot support its ambitions to benchmark Disney. He pointed out that Disney is a successful international model for creating content IP, and the powerful and rich content IP has brought it the confidence to lay out theme parks, and its outstanding feature is that a closed loop of benign interaction has been formed between theme parks and content IP production. "At present, the IP production of Bubble Mart is still at the continuous incubation level of image design IP, lacking the strong support of high-quality content IP, coupled with no time precipitation, its IP effect is difficult to reach the level of allowing consumers to consume at a premium for the brand."
In Li Yingtao's view, the Tide Play brand should be dominated by content IP in the mature stage, which is the key to the core competitiveness of the Tide Play brand. With the diversification of consumer demand, China's future tide play industry will show a multi-category, multi-IP development trend.
(At the request of the interviewees, Ruolin, Xiaoxiao, and Ziqing are pseudonyms)
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