Caixin Weekly | Dolls and Blind Boxes Sweep Southeast Asia: How Far Can Trendy Toys Go Overseas? (AI Translation)

财新周刊｜玩偶、盲盒风靡东南亚 潮玩出海能走多远？

[para. 1] The soaring popularity of trendy toys known as "Chao Wan," crafted with unique artistic designs and high-quality craftsmanship, is exemplified by Pop Mart's figure collection LABUBU. Originating in 2019, its appeal has grown exponentially, with Pop Mart's THE MONSTERS series generating 630 million yuan in the first half of 2024, marked by a 292.2% increase. Boosting signature products like LABUBU vinyl plush dolls has proved pivotal in raising Pop Mart’s profile and market dominance.

[para. 3] The role of celebrity endorsements, particularly a social media post by Thai K-pop idol Lisa, has contributed to the brand's prominence in Southeast Asia. Fans engage online by watching unboxing videos and also actively participate in exhibitions, as seen in Fonny Nurhadi's successful LABUBU exhibition in Indonesia. Pop Mart has achieved significant growth overseas, with earnings preview for Q3 2024 showing a 440%-450% revenue increase in regions including Hong Kong, Macau, and Southeast Asia. Notably, Southeast Asia has become Pop Mart's largest market outside mainland China with a 478.3% year-on-year revenue increase.

[para. 6] Southeast Asia, characterized by a large youthful population and improving economic conditions, offers promising growth opportunities for trendy toy brands. Chinese brands such as 52TOYS and Miniso's TOPTOY have expanded aggressively into the region. Companies are drawn by the favorable consumer demographics and the growing acceptance of Chinese brands, as demonstrated by Pop Mart and its competitors.

[para. 7] Events like the pop-up shop displaying giant Pop Mart figurines in Thailand and the subsequent endorsement by local celebrities have propelled the brand's success in the Thai market. Pop Mart's quick expansion in Thailand indicates the vitality of the region for trendy toy brands, driven by celebrity influence and strong fan engagement.

[para. 11] With over 600 million people, Southeast Asia represents a lucrative market for trendy toy companies due to its youthful population. THAI, Malaysia, and other countries feature younger demographics ideal for the expansion of toy brands like Pop Mart. The region’s toy and game market exceeded 20 billion yuan in 2023, with forecasts indicating continued growth.

[para. 14] Companies like 52TOYS have burgeoned in Southeast Asia utilizing dual channels, blending online and offline strategies to resonate with local consumers. These efforts are concentrated in North America, Japan, and Southeast Asia, with the region identified as the fastest-growing market.

[para. 18] Pop Mart's strategy for market penetration involves placing stores in prime shopping malls and creating engaging shop displays to enhance customer experiences. This approach emphasizes the emotional satisfaction that Pop Mart toys provide, akin to an experiential product in the style of Disneyland.

[para. 19] The overseas venture strategy for brands like Pop Mart initially focused on B2B sales, which evolved to direct consumer sales (B2C) in target markets. The transition enabled more personalized consumer service and solidified brand offerings through a well-orchestrated in-market presence.

[para. 22] Miniso's IP-driven expansion aims to increase its overseas store count significantly by 2028, highlighting Southeast Asia as a starting point due to cultural and economic proximity. Ye Guofu of Miniso emphasizes Southeast Asia's suitability for globalization endeavors due to linguistic and cultural advantages in countries like Malaysia.

[para. 27] Pop Mart's rise in Southeast Asia is partially due to leveraging China's powerful toy supply chain, making its products affordable and appealing through the blind box business model, thus attracting a broad consumer base.

[para. 31] Despite robust growth in Asia, Pop Mart plans to shift focus to North American markets next, which display immense growth potential. Analysts speculate that increasing market diversification will ensure sustained growth and expansion for Chinese trendy toy brands.

[para. 33] Amidst climbing global sales, some Pop Mart executives began reducing their stock holdings, generating significant cash proceeds but triggering skepticism among investors regarding the long-term sustainability of current growth trajectories of the trendy toy market.