The leeks are beginning to sober up.
Editor’s note: This article is from the micro-channel public number “new eye” (ID: xinmouls), Author: West Yin, editor: perch.
On March 26, Bubble Mart released its first annual report after listing in Hong Kong. The financial report shows that Bubble Mart’s full-year revenue for 2020 is 2.513 billion yuan, a year-on-year increase of 49.3%. The adjusted net profit was 590 million yuan, a year-on-year increase of 25.9%. As soon as the news came out, its stock price rose by more than 4% at one time, forcibly regaining its respect.
But no one has forgotten that the market value of this trendy, transformed, and IPO company has nearly halved in the past month: its stock price has risen from a high of 2 The 107.60 Hong Kong dollars on the 17th had fallen to 54.20 Hong Kong dollars at the close of the market on March 23, a 50% decline in the range, and the market value evaporated 59.6 billion yuan.
There are many fuses: Bubble Mart has been criticized for “IQ tax” and “bubble theory”; in 2020, it will be sold twice, defective products will not be refunded, and formaldehyde will exceed the standard Surrounded by negative news; or more and more competitors are pouring into the track to get a share of the pie, Molly IP is no longer the only one…
No matter which thread, the result is the same in different ways: the blind box players can’t cut the leeks, and the old money in the capital market is sober.
Wang Ning, the founder of Bubble Mart, has stated many times: “I think in five years, we may be the most Disney-like company in China.” In the roadshow for the market, Bubble Mart changed its wording, “Internally, we no longer compete to be the Chinese version of Disney, but aspire to become China’s Bubble Mart.” Now, Wang Ning’s statement has changed again, even Disney No longer mention it, but use the analogy of Bubble Mart with a record company: launching an IP is equivalent to releasing a record, and a well-known designer is the company’s “number one artist”.
Why did Wang Ning change his mouth three times? Are you unwilling to be Disney, or can’t you be Disney? What crises are hidden in Bubble Mart’s 20-year financial report? With these questions in mind, XinMou will start from the following four parts for this trendy play company.
· Is the blind box a leek business?
· Why can’t Bubble Mart become Disney?
· BubbleHow low is the core moat of Pomat?
· What specific minefields exist in the business experience of Bubble Mart
01
Blind box opening is leeks
When you talk about Chinese fashion, you think of Bubble Mart; when you think of Bubble Mart, you think of Blind Box.
How much is Pao Mart’s company dependent on blind boxes? According to its prospectus, in the first half of 2020, the revenue from blind box products accounted for Pao Mart’s period 84.2% of total revenue.
The blind box has captured the user’s gambler psychology and collection addiction.
The experience of “uncertainty” and “scarcity” brought about by the process of unpacking blind boxes has planted the seeds for repeated purchases. There is nothing new under the sun. From the “chuck card” of crisp noodles that swept the country back then, to the rare SSR cards in online games, and the 60-year-old gashapon game in Japan, the essence is the same. The core is to use the rarity of hidden roles in the IP series, and use the low-lottery gambling model as a means to suspend consumers’ desire for storage and cater to their “gambler psychology.”
Xinhua News Agency once issued an article criticizing Bubble Mart’s blind box as “soft gambling” and the addiction and gambling psychology brought about by “blind box fever” In the breeding of abnormal consumption, many blind box lovers spend a lot of money every month, which is not conducive to the formation of a good consumption outlook for minors.
Furthermore, the cost and difficulty of making blind boxes is extremely low. Most of the single blind boxes sold by Bubble Mart online are priced at 59 yuan. According to its prospectus, based on the gross profit margin of products in 2019, a blind box with a price of 59 yuan will cost less than 17 yuan.
Picture: Pao Mart product gross profit margin (Source: Pao Mart prospectus)
The extremely high return on investment ratio has attracted countless toy manufacturers into the track. Bubble Mart cannot prevent its own IP from being plagiarized. my country’s manufacturing cluster : Dongguan, Guangdong, Kunshan, Jiangsu and Yiwu, Zhejiang, especially Yiwu, the world’s small commodity market, as long as the sample is given, the manufacturer can immediately mass produce and put on the market.
Fashion toys such as products that do not have any technical difficulty, unlike sports shoes such as Jordan Nike, which have absolute control over R&D technology, there is no possibility of monopolizing production. Sex, if you don’t have a legal team as powerful as Disney, you can only face the crisis of plagiarism. What’s ridiculous is that Bubble Mart has been caught up in a plagiarism scandal.
At the same time, Bubble Mart’s marketing method accelerates the process of breaking a good hand.
In 2018, Bubble Mart’s domestic sales of Molly’s IP exceeded 4 million. In 2019, this value soared to 7 million. An IP that sells millions of dollars every year, how could the blind box still have room for added value?
The market with tens of millions of shipments keeps the ecology of blind boxes in a state of oversupply. Blind box players often come across. As soon as the original price of the original blind box is opened on the front foot, the back foot finds that their dismantled models are everywhere on second-hand platforms, and they are all at the price of cabbage. This experience is too unfriendly to blind box players.
After Bubble Mart realized the impact of excessive shipments on the secondary market, it adopted the method of starvation marketing. In August 2020, Bubble Mart released the “Molly’s Day” series. The blind boxes of this series have been out of stock for a long time. The flagship store once disappeared from the online flagship store, and it was only recently relaunched. Once it was new on the Bubble Mart box drawer, a small amount of supply was quickly emptied.
Bubble Mart’s series of operations really made the price of “Molly’s Day” in the secondary market very firm.On the Qiandao Chaowan APP, among the 12 regular models of this series of blind boxes, 6 models are priced between 60 yuan and 110 yuan, which is greater than or equal to the original price. The price of hidden models is as high as 380 yuan. Such a high premium ratio is very rare in the blind boxes of the past.
Picture: “Molly’s Day” series price (Source: Qiandao Chaowan APP)
Diving and devaluation of the blind box has spawned a large number of blind box players who have retired. Searching for the keywords “blind box retreat” on Weibo, Xianyu, and Xiaohongshu, there will be a lot of pictures of dolls pushing like a mountain ; Blind boxes comparable to sky-high prices also make most players stop watching and lose their desire to buy.
In late March this year, Bubble Mart fell to the altar of hundreds of billions of market value, not without a trace. After the extensive and crazy growth of the Chinese trendy play market in the past two years, it has tended to cool down, and the blind box players have gradually stabilized. It’s just that this company cut a handful of leeks from consumers before going public, and cut a handful of leeks from stockholders after going public.
02
There is no life for Disney
Bubble Mart narrows the way of playing in fashion, and Wang Ning portrays Chinese fashion in fashion as a single image of a Chinese blind box.
Fashion play, playfulness and meaning, is a trendy toy. It mainly includes trendy products based on animation, film and television IP and art toys designed by artists and designers. From the content point of view, it can be divided into trendy play products with story IP as the core content and visual graphics created by the artist as the core content.
Disney canIn order to say that the film and television IP category is a collection of players. The well-known Mickey Minnie, Donald Duck, Police Officer Hudi, Buzz Lightyear, Dolly, Nemo, Disney Princess, Marvel Heroes, etc. are all well-known IPs bought out by Disney.
What Disney is best at is not making movies, but commercializing IP.
In 2006, Disney bought Pixar for $7.4 billion; in 2009, Disney spent $4.2 billion to acquire Marvel Comics (the predecessor of Marvel); in 2012, it announced Acquired Lucas Pictures for 4 billion U.S. dollars. In 2019, Disney purchased 21st Century Fox for 71 billion U.S. dollars. Large-scale acquisitions have brought numerous excellent IPs to Disney, and these are the core competitiveness of this huge entertainment empire.
According to Sinolink Securities, from the perspective of Disney’s revenue structure, theme parks, copyright publishing and games, retail and other revenues accounted for 42% of revenue in fiscal year 2018. After the acquisition of Marvel, it successively published Marvel comics and mobile games, manufactured downstream derivatives, and enlarged Marvel’s IP layer by layer.
But from the point of view of the commercialization of Chinese local film and television IP, the operation of Guoman’s derivatives is facing too many difficulties.
First of all, the biggest problem is that the box office cannot stand, and derivatives cannot stand. Guoman derivatives often fall into such a dilemma: before the box office, no one cares about the derivative authorization, and after the box office breaks out, they fall into the predicament that it is too late to develop. The box office is as strong as “The Devil Boy of Nezha”, and its derivative licensing revenue accounts for less than 1% of total revenue.
In addition, the industrial structure of Guoman shows an obvious “spindle shape”: upstream content sources and downstream playback platforms, and derivative channels are relatively concentrated, but content production in the middle reaches The concentration of production and issuers is very low. This directly leads to the complete cooperation of dozens or hundreds of production companies in order to complete an animated film. Not to mention the uneven quality of the national comics released, IP licensing is even more expensive, and not all companies buy IP everywhere with no money like Disney.
Before Bubble Mart’s bubble burst, Wang Ning let the company directlyThe benchmarking of Disney, now it seems, is simply a big issue in the world.
Bubble Mart has no way to create trendy toys with story IP as the core content, and can only choose the second way to create visual graphics created by artists as the core The content of the trendy play product.
On the second road, Bubble Mart narrowed again and chose a low-end gameplay in the trendy game: blind box. In the blind box, Molly IP dominates, and the company’s other IP Dimmo, BOBO&COCO sales have soared and still can’t beat Molly, which is showing signs of decline.
Bubble Mart is a typical case of putting all eggs in one basket.
03
The core moat is not worth mentioning
Bao Fan, Chairman of Huaxing Capital, who participated in the investment of Pao Mart, mentioned that the core of Pao Mart’s success is definitely not the blind box, but the design and supply The chain, and then to the final retail terminal, is integrated into a platform-based capability.
Before 2015, compared with Pao Mart, which was only doing retail business at the time, Pao Mart now shifted from agency to independent development and gradually moved upstream Designers have penetrated and their competitiveness has indeed improved, but how high can the core moat create barriers to competition?
If other manufacturers are now buying out a few little-known designer’s IP at low prices, and then go to Yiwu, Zhejiang to find a factory to put the design on the floor, and finally Put a few blind box machines in the mall, build a small program for the box box machine on WeChat, and cooperate online and offline. Isn’t it possible to compete with Bubble Mart on the same stage?
In fact, it boasts that Bubble Mart can integrate upstream design, midstream development, and downstream salesThe integration of services together can form a complete ecological closed loop. It is not possible to do the above-mentioned various behaviors. It is conceivable how difficult it is to implement them.
The core moat is so easy to break defenses, it’s not just a matter of fact. In reality, there are more and more players entering the game. The weak IP sales of Bubble Mart are also naked. visible.
In the Chinese trendy play market, Bubble Mart’s competitors include Dreams, MedicomToy, 52Toys, Twelve Dong Culture, etc. These companies have 8.5%, 7.7%, 3.3%, 1.7%, and 1.6% of the CR5 market share in China’s trendy play industry in 2019. The total market share of CR5 does not exceed 25%. It is characterized by a typical “small business in a large industry” and a fierce competition. There has not yet been a company that can become an absolute leader.
Dreams chasing behind is Bubble Mart’s number one enemy. The similarity between the two companies is that they entered the game earlier, Dreams has been deeply involved in the blind box field for a long time, and its Sonny Angel product has endured for a long time. 52 Toys, as a local Chinese brand, is similar to Bubble Mart and is also a toy brand operating in the entire industry chain. Its advantage lies in having many internationally renowned IPs, such as “Disney Princess”, “Frozen”, and “Avengers”.
In addition to the original trendy play companies, more and more toy-related or unrelated companies have entered the industry chain, and companies in different industries have become popular as trendy play peripherals. New retail companies such as MINISO and Sanfu have begun to launch low-unit price blind boxes. The blind box of “Country Love” was officially launched in Taobao’s Youku Mowan flagship store, and it was officially announced that the first batch of pre-sold blind boxes were sold out within 6 hours.
Competitors are daunting, but the sales of Bubble Mart are weak.
Bubble Mart’s revenue in 2017-2020 were 1.581, 5.145, 16.834, 2.51 billion (billion yuan), although showing a growth trend, but the growth rate in the past year has dropped. The year-on-year growth rate of Bubble Mart’s total revenue from 2018 to 2020 is 225.5%, 227.2%, and 49.3%, respectively.
Compared with the growth rate of several hundred percent in previous years, 2020 is destined to be an ugly year for Bubble Mart’s earnings. At the same time, Molly, who has big round eyes and a narrow mouth, is not as popular as before. In 2020, IP Molly sales fell 22% for the full year, and fell 13% year-on-year in the second half of the year.
04
Which minefield
The low moat of Bubble Mart is the root cause of the gradual decline of IP, which radiates to the upper, middle and lower reaches of Bubble Mart’s control, and it can be seen everywhere. Minefield.
First of all, Bubble Mart relies too much on the blind box as a single revenue method, thus ignoring the multiple play methods of Chaowan. The central media Xinhua News Agency’s naming criticism is a warning to the abnormal growth of the blind box market.
In the long run, with the further development of blind box play in China, there will inevitably be a tightening of policy control over the play economy. It is inevitable to establish clear explosion rate and consumption ceiling rules as in the Japanese market. As a leading company in the industry, Bubble Mart will definitely bear the brunt of mistakes and beatings.
Secondly, the upstream design of Bubble Mart is too narrow. Wang Ning envisions that Bubble Mart can provide a design platform for designers from different countries and regions, and artists can create trends and play together. Wang Ning said: Among the artists we have signed, a large proportion are overseas artists. But just creating an original unknown IP, spending a lot of money and energy to win a small design that is not well-known, the IP that is better than the competition has accumulated a group of original fans. For example, the TV series “Country Love” has long been on fire, and its adaptation into Chaowan is pure icing on the cake.
Picture: Pao Mart prosecution information (Source: Qichacha APP)
Derived to the last link of the industry chain, there are also big problems with Bubble Mart’s marketing methods: the outreach of Bubble Mart largely relies on the fission-type spread of players on social platforms, but the peer-to-peer spreading method It is not conducive to IP marketing. The reputation and temperament of players are difficult to control, which can easily cause the tepid IP of the trendy game.
As the saying goes: water can carry and overturn a boat. If Bubble Mart does not change its marketing methods and consumers turn back one day, Bubble Mart can only carry the label of “defrauding Mart” forever.