At the beginning of June, Bubble Mart, whose main business is trendy toys, submitted its prospectus to the Hong Kong Stock Exchange, officially ushering in the second trip to the capital market.
Many people may not be very familiar with the wave game industry, but when it comes to the Molly blind box launched by the company in the past two years, it can be described as popular throughout the country, which has tripled the company's revenue in 2019.
In 2010, the company opened its first store in China and successfully raised 9 rounds of financing in 10 years. In 2019, with the popularity of blind boxes, it achieved revenue of 1.683 billion yuan and net profit of 451 million yuan. Before the impact of the IPO, the company also completed the F round of pre-IPO financing in April, with a financing amount of more than $100 million.
With the improvement of the Chinese consumption concept, personalized design, trend attributes and spiritual needs have become the consumption logic of many young people. Against this background, Chaowan's economy has ushered in new development.
The huge market potential has attracted several companies to go hand in hand. Since 2016, the domestic wave market has entered a period of brutal growth. However, with the increase in market share of leading companies in the past two years, the market concentration has gradually changed, and new prototypes of the competitive market have emerged.
2020 is the 10th anniversary of the emergence of Chaowan culture. What are the new features of the domestic Chaowan market that has been cultivated in 10 years? Who created this tens of billions of cakes? How do leading companies realize profits from losses? Now with the increase of capital, what new changes will occur in the development of Chaowan enterprises in the new cycle?
From IP creation to community cultivation
Consumer loyalty cultivated step by step
Why is tide play so popular with people?
Because of IP.
To put it simply, a large percentage of people who love the animation "Doraemon" will buy Doraemon comic books, dolls and other peripheral products. This is the commercial value of the IP image.
As the core attraction and competitive source of Chaowan enterprises to stand in the market, IP cultivation and building is the main content of the upstream of the trend toy industry chain.
Take Bubble Mart as an example. Among all the IPs, the company obtained Molly's exclusive IP copyright in 2016. As the image of Molly quickly became popular, the image of a blonde pouted little girl designed by a Hong Kong designer quickly circled and "harvested" A big wave of fans. It is precisely because of the two major IPs of Molly and Pucky, as well as the rapid expansion of offline stores and the addition of robot stores that enable companies to turn a profit.
There are two main types of IP participation for Chaowan companies. One is companies with outstanding design capabilities, such as Kaws in the United States, designed by graffiti artists. The country mainly focuses on twelve buildings and owns the long grass Yandan. , Cooling girls and other IP images. The audience of such enterprises is generally loyal to IP and very fond of their derived toys.
The other type is authorized by cooperating with IP holders. Such enterprises are represented by Bubble Matt, IP Station and 52toys. Both Molly and Pucky are authorized to develop by signing up. The founder of Bubble Mart, who has tasted the sweetness of high-quality IP, has said that in five years time, he will become the most Disney-like company in the country, with a large number of valuable super IP, to incubate and dig out more international IP and commercialize it .
In addition to IP cultivation, for Chaowan companies, having an omni-channel sales system that promotes a comprehensive consumer reach system is also an indispensable part of increasing fan stickiness.
At present, Bubble Mart has 114 retail stores and 825 innovative robot stores in domestic first- and second-tier cities. In 2016, it turned from offline to online, and the online flagship store opened. At the same time, it launched the online trending toy community platform—— "Fun Fun" mobile application, providing fans with a full range of interactive and fun shopping experience.
Other Chaowan companies are also keeping pace. 1983 has now opened more than 100 directly-operated stores covering 50 cities. At the same time, it also maintains close cooperation with Hong Kong Wharf, Sun Hung Kai, China Resources Vientiane City, Wanda Plaza and other commercial real estate. Cool Music Chaowan also has more than 100 direct stores. 52toys also launched an online "play egg fun" social e-commerce platform in 2017.
Developing communities and organizing exhibitions must not only attract users, but also increase the activity of operating users. Judging from the number of visitors, the Shanghai International Fashion Show held by Bubble Mart in 2018 is already the largest trending toy exhibition in Asia, and as of now, the head company has 3.2 million registered members.
Who is paying for the booming economy of the tens of billions of markets?
With the popularity of domestic ACG (Animation, Comics and Games) culture, trendy toys and hand-made gifts have made their debut, and the scale of the pan-two-dimensional population has grown.
As of 2019, the scale of domestic pan-secondary users has approached 390 million and continues to increase. Unlike ACG's core users, pan-secondary users have some knowledge of animation, but their investment and financial resources are relatively limited. Animation IP-derived products generally have a higher premium. Pan-secondary users are generally enthusiastic about such products and have a relatively high acceptance of many independently designed and produced cute products.
Trend toys lowered the user's awareness and consumption threshold of traditional animation IP, and aroused the interest of the majority of pan-secondary users. Chaowan's representative blind box is mainly based on cute cute products, and is endowed with a strong two-dimensional cultural imprint. The acceptance of products with such attributes will also increase day by day.
From 2015 to 2019, the compound annual growth rate of the domestic wave market is 34.6%, and it is expected to reach 76.3 billion yuan in 2024. However, compared with the world level, although the growth rate is much higher than the global market, it is still in the early stage of development and has great potential.
In the past two years, the randomness and unknown nature of blind box gameplay have attracted a large number of consumers. The novel consumption patterns and cute products have made many outsiders turn fans. White-collar workers and students are the main consumers of blind boxes. Women with strong consumption power and 18-34-year-old groups are also loyal fans of blind boxes.
The data shows that among the people who buy blind boxes, 90% of their monthly income is between 8,000 and 20,000 yuan. Many post-80s and 90s pay for curiosity, collect value, and are willing to pay for the sense of companionship brought by Meng products, and are more willing to pay for social purposes. Trend toys endow traditional toys with the attributes of trend art and multiple social attributes, which has attracted widespread attention from young and middle-aged groups.
Plagiarism and hype by companies with low market concentration
Will capital blessing play new opportunities?
At present, the trendy market represented by blind boxes is gradually crowded, and the incoming players are fierce and all want to get a piece of cake. However, the current domestic toy retail market is fragmented and full of competition.
The fastest-growing and largest-scale head in 2019 only accounts for 8.5% of the trend toy market, which is not much different from the second-ranked company (7.7%). Moreover, the total market share of China's top five wave operators is only 23%, and the market concentration is not high.
In addition to competition from trendy toy companies such as IP stations, super cute factories, 52toys, Chaowan enterprises also face pressure from many collectors designers and manufacturers, as well as a group of new participants who are good at using Internet technology and social media to attract consumers Come to shunt.
Cross-border integration of enterprises such as byte beating and bilibili, blind boxes for climbers in Xiabuxiabu, and blind boxes for "Meeting Haoran" by Ruixing are all representatives of cross-border devotion to the production of trendy toys. In particular, bilibili comes with a two-dimensional attribute, and it is not impossible to achieve overtaking on a curve.
In addition to external competitive pressures, Chaowan enterprises also have internal worries, and their heavy reliance on IP has become Chaowan enterprises' revenue worries.
Comparing the revenue of various types of products of Bubble Mart in 2019, the revenues of Molly and Pucky accounted for 27.1% and 18.7% of the annual revenue respectively. In 2018, the revenue ratio of the Molly series even accounted for 42.6%.
The company stated bluntly in the prospectus, "Any decrease in the sales of Molly trend toy products may have an adverse effect on our earnings and operating results." Of the 85 IPs of the enterprise, 51 are non-exclusive IPs that cooperate with suppliers. These suppliers can cooperate with the enterprise, and of course they will cooperate with other competitors to produce the same type of goods.
Although the company's development momentum is rapid and many designers have been contracted, from a long-term perspective, the trend toy IP is not like Disney Mickey Mouse and has a profound cultural heritage. Without continuous innovation capabilities, iterative product upgrades can't keep up, and consumers will also be lost.
In addition to this, the head company Bubble Matt is also caught in a storm of false propaganda and plagiarism. According to the Beijing News, in January 2020, some netizens complained that Bubble Mart was suspected of false propaganda, claiming to have purchased the "Double 11 Premium Package", but the received product was neither new nor the hottest. Then Bubble Mart gave a solution, but many consumers did not buy it.
In February this year, Bubble Mart's new AYLA animal fashion department was released for sale, but then consumers pointed out that the AYLA series of blind boxes were suspected of plagiarizing the 2017 DollChatueau's products. In the end, Bubble Mart made an apology at Guanwei, admitting that there was a problem with the style design and removed the related products.
Blind box gameplay is novel. For a large number of student groups that have not yet formed a correct consumption concept, values, and no income, whether Chaozhou Enterprises can guide them to rational consumption is also a social responsibility that should be shouldered.
At present, the Chaowan market has entered the capital bureau, and industry giants will continue to precipitate the market to increase market share. However, in the face of a market of tens of billions of dollars, companies should use their capital to bless the circle, but they should also sink their hearts to seriously think about how to regulate the healthy development of the industry? Where is the next explosion IP? How to balance the relationship between corporate profits and the healthy development of society?
Data News Editor: Chen Hualuo
New media design: Xu Xiao