Pop Mart, a Chinese retail toy manufacturer well-known for its “blind box’ concept, was founded with a toy store the year 2010 by the founder Wang Ning. What started as a simple store inside the Beijing mall has grown to become a hugely successful business which could be just a few steps away from becoming a global phenomenon.
However, this hasn’t been an easy one for the company. The publicly traded company has experienced a plunge in its share price of more than 87% from its highest (HK$99.40) on February 20, 2021. On the 20th of October, on a Thursday the share price hit another record low, which was HK$12.06.
So how did a well-loved brand gotten to this point?
In the event that Pop Mart released interim reports which showed gross profit margins fell from 63 58% to 63.9 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 decline in profit isn’t the only problem for the company. In the first place, younger Chinese consumers are tired of blind packaging and the frenzied marketing tactics and 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 partnership with mystery boxes, which has led to food to go to waste. One person was reported to have spent over 10,000 Yuan (over $1500 USD) on 106 meals in order to get an item from the Dimoo exclusive toy set.
Chinese media have analyzed the decline in sales of brick and mortar stores as a result of the restrictions due to the outbreak. However, a drastic drop in sales was also observed on its most popular online Tmall channel, which saw a drop of 35% YoY in June. For Chinese Gen Zs their repurchase price is expected to continue falling as the brand’s image has lost its novelty and freshness.
Molly was the most popular IP persona in the history 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 iconic fashion model, but she does not have any background information. Molly has contributed more than 40% of revenue in 2018, however, the percentage has dropped to 11.5 percent in 2021.
In late 2020 MediaCom published a whitepaper which suggested that “Chinese consumers will be spending more money playing and longer time playing and creating fun content”. Due to lockdowns and travel restrictions as well as travel restrictions, the Chinese market saw an explosion of online play and an increase in the number of adult customers for brands such as Lego and other toys, however, brands like Pop Mart seemed to have lost their appeal.
Pop Mart began to explore new ways of earning money and escaping its dark box dilemma after the collectables boom in China was fading. In 2022, the company will open its first store outside of London and hopes to expand its markets to the West. In the last week of August the interim results from Pop Mart show that the sales from markets outside China’s mainland China was 157 million Yuan (US23 million dollars) approximately 6.6 percent of the company’s total revenue. Its growth was 161.7 percent year-on-year.
The sun is expected to rise in the markets outside of Pop Mart? How can the brand adjust its strategy? How can it change its approach to the toy and game category in China? Campaign asked 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 market to get an equal share of the expansion for themselves within the world of virtual. For instance, Lego toys get into games, animation, films, IP collaboration in merchandise in order to tap into a the new market growth.
Some brands may not be able to survive the pressures of international markets as every country is facing a tough economic time that are characterized by high inflation and the cost of living. Brands who are considering going abroad also need to determine the potential of the market prior to entry and determine if consumers have more budgets or willingness to invest. In an economic downturn people are looking for the highest value and return. In our report , ‘The The Future of Play’ we mentioned that ‘novelty’ is one of the primary reasons for playing and this could provide the perfect opportunity to Pop Mart to consider limited editions or high-value productions for this purpose, that consumers purchase for the purpose of reselling. Maybe even do more unorthodox brand or IP collaborations.
As time passes, companies and products will need to depend on the virtual world to get around physical restrictions – either through the virtual reality or the metaverse.
Pop Mart has done a excellent job at marketing, generating excitement, engagement, and conversion, however it hasn’t been able to have managed its brand as a strategic asset that can sustain growth. This has led to the design of the product that is reactive instead of being ‘leading’, and the value that consumers perceive in the ‘one more set’ is diminished.
A few points Pop Mart could consider on branding strategy and future growth strategies:
Create a clear and concise purpose that will guide the design of products and marketing. Why do you think Pop Mart exist? What is the primary benefit that is relevant to consumers’ lives? What effect does it bring beyond just ‘just fun for the individual as well as the community, society, and the environment?
Create clear concepts and a clear navigation for the Retail and product portfolios What is the role each IP perform in Pop Mart’s marketplace? Do each series have a distinctive value propositions?
The one thing that must be included in the path of Pop Mart’s 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 higher level and also tapping into its NFT ecosystem.
Pop Mart became a massive success due to its capacity to design and create stunning collectible characters that were delivered via the element of surprise in the blind box. As a result of this blind boxes began popping everywhere. Not only snacks, toys fast food establishments as well as jewelery and expensive products. Blind boxes grew so large they were able to name it the “blind-box economy” (Mang He Jiang Ji ) Then, Chinese people became tired of them.
The public also became tired of Pop Mart’s Pop Mart cast of characters and the cute Molly. In addition to her design as well as aesthetics Molly was lacking a compelling emotional backstory to keep the audience interested within the toys.
Pop Mart can no longer depend on the blind box and has to utilize its own unique vending machine model of distribution to bring fresh products to market. I’d follow that Lego IP model but work with popular anime comic stories featuring enduring and solid characters that will keep the consumers entertained for long periods of the course of time.
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, as an instance, are a popular fashion for women of the teen age on the social media platform RED (Xiao Hong Shu ). Pop Mart could create doll houses for your office cubicle or your home space.
It’s not the case that all Chinese brand that is sold abroad will have more possibilities, but I’m certain Pop Mart will do well. Chinese popular culture companies that are able to benefit from the K-Pop/bubble-tea Asian hipster trend will definitely discover their ideal audience in the world. If you visit the nearest Miniso (Ming Chuang You Pin ) retailer in America and you’ll see the place packed with shoppers and the typical wait in one of the San Diego Haidilao (Hai Di Lao ) hot pot restaurant is between 30 mins to over an hour. To look cool in Western GenZ nowadays you must look nice on TikTok.
As with other product categories as well, the lockdowns have affected the primary retail channels due to the fact that fewer customers have visited retail stores, which has forced manufacturers of toys to become more innovative with their the internet of commerce. As things calm down and people return to shops, I believe that the market will resurface as collectible toys are extremely sought-after. However, they’ll need to come back with newer toys as well as new ways for customers to interact with them.
© The Summer Whine 2025