The 2020 epidemic failed to turn the performance of South Korean toy companies into losses.
Editor’s note: This article is from the micro-channel public number “three entertainment” (ID: hi3wyu), Author: Yiyi.
In the 1980s, South Korea once ranked among the top three exporters of global toys, with an annual export value of up to 7.083 billion (1.079 billion U.S. dollars). However, as more and more toy companies closed due to business difficulties, or moved their factories to overseas regions with lower labor costs, the number of Korean toy companies plummeted from more than 700 to 60. Over the years, exports have been declining at an average annual rate of 20%.
Today, South Korean toy companies are still facing many difficulties, such as negative population growth and the entry of new media.
The results of the 2020 South Korean Census show that the annual number of births was 270,000, and the number of deaths was 300,000. The birth rate was lower than the death rate for the first time, and the population entered an era of negative growth.
What is the result of toy companies with children as their main consumer group in 2020 when the epidemic affects lives and the birth rate decreases?
Sanwenyu sorted out the 2020 performance of Sonokong, Aroraworld, and Daewon Media:
Sonokong’s annual sales were 496 million yuan, a year-on-year increase of 16.2%, and a net profit loss of 11.49 million yuan, a loss of 3% year-on-year;
AuroraWorld’s annual sales were 824 million yuan, a year-on-year decrease of 9.9%; net profit was 46.6 million yuan, a year-on-year increase of 112.5%;
Deawon Media’s annual sales were 1.548 billion yuan, a year-on-year increase of 38.9%, and its net profit was 30.48 million yuan, a year-on-year increase of 64.9%.
Decreased birthrate + impact of the epidemic
Sonokong, which sells toys by animation, has to sell toys to adults
Sonokong’s predecessor was an industrialized enterprise whose main business was the production of faucets.
In December 1996, after the company officially launched its new brand “Sonokong”, it began to get involved in the toy business, and successively signed the copyrights of many animation and game characters around toys.
Today, Sonokong has grown from the original toy company to a domestic toy, cartoon, and comics business, including games business.An all-round comprehensive entertainment enterprise.
According to the performance report released by the company, the full-year sales of 2020 will be 496 million yuan, a year-on-year increase of 16.2%. Total sales profit was 84.68 million yuan, a year-on-year increase of 3.8%. Operating profit loss was 7.904 million yuan, a year-on-year decrease of 34.3%. The annual net profit loss was 11.49 million yuan, the loss expanded 3% year-on-year, and the net profit was negative for two consecutive years.
Sonokong serves mainly boys aged 4-13, and the main products are toys based on popular animated characters. Its hot-selling character toys are from “Hello Cabot”, “Mccard” series, “Bite-ChoiCar” series of animated character toys, and Mattel’s Fisher, Barbie, Jurassic World, etc.
(Sonokong’s local animated character toy)
As the main business, the sales of character toys and game products are 475 million yuan, accounting for 95.72% of the total; the sales of the animation part are 292,100 yuan, accounting for 0.06%; Internet cafe handling fees( “League of Legends” etc.) part of the sales was 20.92 million yuan, accounting for 4.22%.
As the toy company whose main sales area is the local market, its export sales are only 147,700 yuan, A year-on-year decrease of 63.6%. Looking at the proportion of total sales, it was 0.02% in 2018, 0.1% in 2019, and reduced to 0.03% in 2020.
In 2019, overseas sales outlets that were hard to open were closed because of the epidemic.
In the local sales market, 65.14% of sales came from discount stores, with a total of 323 million yuan, a year-on-year increase of 7.5%. 30.61% of sales came from online and offline wholesale and retail businesses, with a total sales of 169 million yuan, a year-on-year increase of 46.5%.
In terms of brand classification, sales from Nintendo were 258 million yuan(44.39 billion won), and Mattel, which has exclusive sales rights in Korea, had sales of 84.12 million yuan(14.463 billion won). Korean won), ChoiRockcf’s sales were 50.67 million (8.713 billion won).
The reduction in the birth rate has forced Sonokong to shift its focus to the adult market. The efforts in this area can be seen in many aspects such as the cooperation with the 3D three-dimensional puzzle Le Cube, the sales of limited edition Barbie dolls, and the agency of Blizzard Entertainment’s games.
In addition, Sonokong also donated dolls and toys from BTS’s (BTS) to the orphanage. On the one hand, it demonstrates the social responsibility of mature enterprises and on the other hand, it is also promoting its dolls. playWith. Not only that, on the occasion of Christmas last year, Sonokong also held the “BTS Official Doll Sale Exhibition”, the purpose is to attract BTS fans for their consumption.
The linkage version of the DC comics movie “Wonder Woman 1984” also features a 100% restoration of the characters in the play, and is sold in a limited edition worldwide. As Mattel’s holding company, Sonokong has acquired 500 of these shares for local sales.
At the same time, it is also sold with Wonder Woman and her boyfriend Trevor, who also uses the costumes in the play as the main selling point. The limited edition dolls not only stimulated the desire of DC fans to collect, but also attracted the attention of Barbie fans.
70% are from overseas AuroraWorld, with a net profit of 47 million yuan last year
Because of making money making masks
AuroraWorld mainly focuses on overseas markets such as Europe.
The company was established in September 1981 and listed on KOSDAQ in South Korea on December 29, 2000. It has branches in the United States, the United Kingdom, Japan, Shanghai, and Hong Kong. It is a design, development and toy manufacturing company. Leading enterprise.
In 2020, AuroraWorld’s annual sales will be 824 million yuan, a year-on-year decrease of 9.9%. Operating profit was 50.98 million yuan, a year-on-year decrease of 30.4%. The annual net profit was 46.6 million yuan, a year-on-year increase of 112.5%.
As AuroraWorld, which uses export markets as its main source of revenue, nearly 70% of its revenue comes from overseas markets. Thanks to the company’s gradual transfer of the market to the local market in 2002, the original dependence of up to 80% was reduced.
But in 2020, the global export activities affected by the epidemic have been blocked, and the relative failure of overseas epidemic control has caused many stores to be unable to operate or even close, which still has a lot of impact on AuroraWorld.
From the perspective of market segments, domestic sales in South Korea are 270 million yuan, accounting for 32.7%. The total sales in the United States is 407 million yuan, accounting for 49.5%, accounting for nearly half of the share. The total sales in the UK is 82.49 million yuan, accounting for 10%. The total sales in Hong Kong, China was 59.54 million yuan, accounting for 7.2%.
As a company that attaches great importance to the research and development of new products, even in the current epidemic, it still increases research and development funds.
In 2020, AuroraWorld invested 20.35 million yuan in research and development, a year-on-year increase of 8.6%, accounting for 3.4% of total sales.
As the character IP independently researched and developed by AuroraWorld, the “Yohou Monkey” series is sold well in domestic and overseas markets through animation production. The series of animations are currently translated into more than 20 languages and are available on shelves in more than 190 countries and regions through Netflix. And the “Mystery Apartment” series of animations, which set the highest ratings in history in South Korea, also ranks among the ranks of high-yield characters, and together with Yoohou has brought huge profits to AuroraWorld.
As early as the first half of 2019, “Mystery Apartment” earned 73.86 million (12.7 billion won) in sales for AuroraWorld. The strategy of driving character products through animation is obtainedAfter positive feedback, AuroraWorld has successively signed CJ Entertainment’s “Mystery Apartment”, PINKFONG, and Line’s popular character BT21.
At the moment of the epidemic, masks have become a necessities of life. In the early stage of the epidemic, the Korean people were plagued by the shortage of masks, especially the shortage of children’s masks made parents of children feel more anxious.
Under such circumstances, AuroraWorld did not hesitate to invest nearly 20 billion won to open up the mask industry. It printed the characters of its popular animation “Yohou Monkey Rescue Team” on the masks for sale, and it quickly became popular in the market. Praise.
The mask business takes the ride of AuroraWorld’s overseas sales channels and sells them in many countries and regions such as the United States, the United Kingdom, Germany, and Hong Kong.
Rely on Nintendo games and Japanese animation IP
Daewon Media has annual revenue of 1.55 billion yuan and net profit of 30 million yuan
Daewon Media is a Korean entertainment company whose business covers animation production, brand licensing, film production and distribution, localization, games, toys and other content industries.
As a comprehensive entertainment company, Deawon Media’s 2020 sales will be 1.548 billion yuan, a year-on-year increase of 38.9%. Operating profit was 42.34 million yuan, a year-on-year increase of 98.8%. Net profit was 30.48 million yuan, a year-on-year increase of 64.9%.
To maintain rapid growth in the epidemic, the biggest hero is Nintendo’s “Assembly!” “Animal Crossing Friends Club” (Dongsen) continues to sell well. The official publication of the Korean version of Dongsen once again stimulated domestic consumption in South Korea, achieving a double harvest of Switch and game sales. Daewon Media benefited from Japanese (including Nintendo, Ghibli animated character products, etc.)’s sales were 1.132 billion yuan, a year-on-year increase of 54.9%, accounting for 73% of total sales.
The revenue from card games, toys, and published books was 280 million yuan, an increase of 4.2% year-on-year, accounting for 18%. Among them, the total sales of card games such as Yu-Gi-Oh are 99.67 million yuan. The sales of the animation segment was 126 million yuan, a year-on-year increase of 19.9%, accounting for 8.8%.
Daewon Media, whose main market is domestic sales, will have export sales of 22.3 million (1.943 billion won) in 2020, a year-on-year increase of 84.9%. Sales in the domestic market were 1.537 billion (264.284 billion won), a year-on-year increase of 38.7%.
In order to expand income from overseas, Daewon Media and Kakao Japan established a joint venture in JapanSherpa Studio, with the world’s best-selling comics platform PICCOMA as the main output object, creates original comics and web works, and explores the Japanese comics and web markets.
In China, Daewon Media has established Beijing Jiasheng Cultural Industry Development Co., Ltd., through Daewon Media CI, to explore the comic and online market in China. The original comic “Dongjun” produced by Daewon Media CI and a Chinese company for the first time was launched in China and South Korea in February this year.
In addition to the layout of comics and online texts, Daewon Media also invested 40.71 million yuan (7 billion won) to shoot the special TV work “Armoed Saurus Dragon” with children as the main audience. “A Fit”, which was originally scheduled to be broadcast at the end of 2020, has been postponed to the second half of this year, but the broadcast through the preview has successfully attracted the attention of a large audience, and its derivative character products and toys are also highly anticipated.
Although there are statistics that, thanks to the impact of the epidemic, South Korean toy companies that have been in decline for 30 years are ushering in a turning point. However, in the face of the crisis of negative population growth and the unending epidemic, the turnaround of Sonokong, AuroraWorld, and Daewon Media was achieved through reforms.
Sonokong will shift its focus to the gaming and adult markets, AuroraWorld uses its character IP to develop the production and sales business of masks, and Daewon Media focuses on the development of web comics and online text businesses. Toy companies are no longer limited to toys. Only more diversified reforms can achieve sustainable development has become an inevitable choice.