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How can Pop Mart continue to stay relevant?

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Pop Mart, a Chinese retail toy manufacturer known for its ‘blind box’ idea, was launched with a store for toys in the year 2010 by the founder Wang Ning. The concept of a single store inside the Beijing mall has grown to become a hugely successful business which could be close to being a household name internationally.

But the journey hasn’t always been an easy one for the company. The company, which is now public, has experienced a plunge in its share price of by more than 87% when compared to its high (HK$99.40) at the beginning of February in 2021. On the 20th of October, on a Thursday the share price hit an all-time low of HK$12.06.

How did a cherished brand come to the point it is today?

In the event that Pop Mart released interim reports which showed gross profit margins fell from 63 percent to 58 percent, Chinese media attributed it to the disruption in supply chain caused by the pandemic which led to an increase of 15% in raw materials as well as an increase of 10% in wages.

However in China the drop in profit isn’t the only issue for the company. In the first place, younger Chinese consumers are becoming bored of the blind boxes and slick marketing techniques and, as a result, the trend of excessive consumption has been slowed down. Additionally there was a report from the China Consumer Association criticised KFC and Pop Mart’s cooperation with mystery boxes, which has led to food to go to waste. One person has been reported to have spent over 10,000 Yuan (over 1,500 dollars) on 106 meals in order to get an item from the Dimoo exclusive toy set.

Chinese media have analyzed the slump in sales at brick-and-mortar stores due to the restrictions in the midst of the epidemic. However, a drastic drop in sales was also reported on its most popular online platform Tmall, which dropped 35% YoY in June. For Chinese Gen Zs their repurchase rates will continue to decline when the toy brand has lost its novelty and freshness.

Molly was once the most popular IP model of Pop Mart and was practically an automated money printing machine for the brand over the last few years. Pop Mart sets Molly as an icon of fashion, but she doesn’t have any story behind her. Molly was a major contributor to more than 40% of the revenue in 2018, however the figure has fallen to 11.5 percent by 2021.

In late 2020 MediaCom published a whitepaper which said “Chinese consumers will spend more money on games and spend spending more time creating and consuming fun content”. Due to travel and lockdown restrictions as well as travel restrictions, the Chinese market saw a booming of online play and an increase in the number of adult customers for brands such as Lego however, toys such as Pop Mart seemed to have lost its appeal.

Pop Mart began to explore new ways of earning money and escaping its situation of a blind box after the collectables boom in China was fading. In 2022, the company opened its first store outside of London and is hoping to expand its markets to the West. In the last week of August the interim results of Pop Mart show that the revenues from the markets that are not in the mainland of China was 157 million Yuan (US23 million dollars) approximately 6.6 percent of its total revenues, and grew by 161.7 percent year-on-year.

The sun is expected to rise in the markets outside of Pop Mart? What should the company do to adjust its strategy? What is the best way to rethink at the toy and play market in China? Campaign put this question to branding experts.

There is opportunity for Pop Mart to move into the virtual play, NFT/metaverse/cartoon animation territories to ignite new interest on their offering. I suggest Pop Mart move into this area to gain some of the expansion for themselves on the internet. As an example, Lego toys get into games, animation, films, IP collaboration in merchandise to take advantage of a the new market growth.

Some brands may not be saved by the international market since every country is experiencing a difficult economic climate that are characterized by high inflation and the cost of living. Brands that are planning to expand internationally also have to evaluate the market’s potential prior to entering the market, and whether there is a higher level of budgets or willingness to invest. In an economic downturn people are looking for return on investment and value. In our report , ‘The The Future of Play’ we referred to ‘novelty’ as one of the primary reasons for playing and this could provide the perfect opportunity that could allow Pop Mart to consider limited editions or high-value productions for this purpose, that consumers purchase in order to sell. Perhaps even more surprising brands or IP collaborations.

In the coming years, more and more brands and products will need to be reliant on the virtual reality to get around physical restrictions – either through the virtual or metaverse.

Pop Mart has done a excellent job at marketing, generating the interest of customers, engagement and conversions, but it hasn’t been able to be able to use its brand as a strategic asset to sustain its growth. This has led to the design of the product that is reactive instead of leading, and the value consumers can see in the ‘one more set’ diminishes.

Some things Pop Mart could consider on the future growth strategy of its brand and actions:

Determine a clear goal that will guide the design of products and marketing. Why do you think Pop Mart exist? What is the main benefit that is relevant to consumers’ lives? What effect does it have beyond just’simply enjoyable for people or communities, as well as society and the environment?

Create clear concepts and a clear navigation for the retail and product portfolios What role will each IP perform in Pop Mart’s marketplace? Does each series offer a distinctive value propositions?

The one thing that must be included in Pop Mart’s journey to international markets is a Web3 strategy and the steps. Pop Mart has great potential to develop immersive experiences by making the physical set accessible to a whole new level, and leveraging its NFT ecosystem.

Pop Mart became a massive success due to its ability to create beautifully designed and collectible characters that are delivered through the element of surprise in the blind box. As a result of this that blind boxes were popping everywhere. Not only snacks, toys fast food establishments however, they also included jewelry and other luxury things. Blind boxes became so popular that they began to be referred to as the “blind box economy” (Mang He Jiang Ji ) And then, Chinese people became tired of them.

The public also became tired of Pop Mart’s Pop Mart cast of characters which included the adorable Molly. Apart from her design style as well as aesthetics Molly did not have a compelling emotional backstory to keep kids interested within the toys.

Pop Mart can no longer depend on the blind box and must use its own unique vending machine model of distribution to introduce new products to market. I’d follow that Lego IP model but work with popular anime comic stories with enduring and reliable characters that will keep the consumers entertained for long periods of the duration of.

Pop Mart could also consider making different scenarios for its current lines, whether in the physical world or in the metaverse. In the physical world doll houses, for instance, are a popular fashion for women of the teen age on the social network RED (Xiao Hong Shu ). Pop Mart could create doll house sets to decorate your office or home space.

There’s no guarantee that all Chinese brand in the world will have more chances, however I’m sure Pop Mart will do well. Chinese brand names who can take advantage of the K-Pop bubble-tea Asian hipster trend will surely reach their audience outside of. Visit the nearest Miniso (Ming Chuang You Pin ) retailer in America where you’ll find crowds of shoppers, and the wait time in Miniso’s San Diego Haidilao (Hai Di Lao ) hot pot restaurant is between 30 hours to one hour. To stay trendy with Western GenZ today you must look nice on TikTok.

As with many categories of products as well, the lockdowns have affected the main retail channels as fewer buyers are visiting retail stores, which has forced toy companies to be more creative on their the internet of commerce. As things calm down and consumers return to stores, I’m sure the market will rebound since collectible toys will be extremely sought-after. But they’ll need to be reintroduced with newer models of toys, and new ways for customers to interact with them.