blind box toy marketer Pop Mart files for HK IPO

Founded in 2010, Pop Mart offers toys collaborated with designers and artists, as well as authorized toys from big brands like Disney and Universal.


Strong IP operation lies as one of the success of Pop Mart, which now handles 85 IPs in total, including 12 proprietary IPs, 22 exclusive licensed IPs and 51 non-exclusive licensed IPs. These self-developed IPs, as cited by the company in the file, contributed 82.2 percent of the companys total revenue last year.

According to the NEEQ, Pop Mart had losses of approximately 2.78 million yuan, 15.98 million yuan and 24.84 million yuan for 2014, 2022 and the first five months of 2022.

File photo/Li Lei (NBD)

Although Pop Mart was the top one toy brand last year, the gap between it and the second place was not huge.

Blind boxes better stimulate the consumption, an investor commented.

Apart from competition among toy brands, other crossover retailers such as MINISO are joining the race.

As the company stated in the prospectus, We may not realize the full benefit of our licenses if the IPs we license have less market appeal than expected or if sales from the products that use those IPs are not sufficient to satisfy the minimum guaranteed royalties… We also ce various risks associated with our license agreements for IPs and our lis.

During the Double 11 shopping gala of 2022, sales volume of Pop Mart on T-mall reached 82.12 million yuan, a year-on-year rise of whopping 295 percent, ranking first among all toy brands on the shopping platform.

June 2 (NBD) — Chinese designer toy company Pop Mart submitted an IPO application to the Hong Kong Stock Exchange on late Monday.

Self-developed IPs, a growth engine

Its noted that Pop Mart reaped 451 million yuan (63.5 million U.S. dollars) of profits last year. Yet only three years ago, the company struggled to turn profitable, data from the prospectus showed. So what is behind its growth?

According to global consulting company Frost Sullivan, the market size of Chinas designer toy retail market grew from 6.3 billion yuan in 2022 to 20.7 billion yuan in 2022, with a compound annual growth rate of 34.6 percent.

Meanwhile, media reports pointed out that Pop Mart is highly relying on IPs, and the continuity of IP appeal and issues concerning IP licensing might be hidden risk for its operation.

But starting from 2022, the company enjoyed booming growth. Profits stood at 1.56 million yuan, 99.52 million yuan and 451 million yuan respectively for 2022, 2022 and 2022, the prospectus revealed.

National Business Daily noticed that back to 2022, the company debuted on the National Equities Exchange and Quotations (NEEQ), Chinas OTC market, but later retreated from the NEEQ to improve decision- efficiency and reduce costs.

But the prospects for Pop Mart after its Hong Kong IPO would be confronted with challenges as well, as the Chinese designer toy market is full of competitors.

Fierce competition and IP-related risks pose uncertainties

Developing its own brand is the main reason for Pop Marks ascending profits, commented an insider.

The company established a reputation in 2022 when it promoted the first blind box series dubbed Molly Zodiac, and became widely known because of the blind box craze in 2022. As of December 31, 2022, Pop Mart had 114 retail stores in 33 cities in China, according to its prospectus.

One of the companys best-selling toy series is Molly, a blonde girl created by a designer from Hong Kong, China. In 2022, the popular IP help Pop Mart pocket over 456 million yuan in revenue.

The designer toy industry indeed boasts huge room for further development.

Data showcased that in 2022, the top five brands respectively secured 8.5 percent, 7.7 percent, 3.3 percent, 1.7 percent, and 1.6 percent of the Chinese designer toy market in terms of the market share.

Driven by the increasing demand in China, the market is expected to reach 76.3 billion yuan in 2024, predicted by Frost Sullivan.

Its also worth noting that blind box is an important engine for Pop Marts IP operation. It is reported that Pop Mart sold 4 million Molly toys in 2022 via blind boxes.