Puppet Mart, a dominant force in the trendy toy space, is now setting its sights on a broader market landscapeThe company, known for its vibrant and collectible toys, is pivoting from merely being a purveyor of trendy playthings to establishing itself in a multitude of sectors, which has fans buzzing with anticipation.

During a recent company annual meeting, CEO Wang Ning excitedly outlined plans for the future of Puppet Mart, hinting at diverse offshoot products, including a line of refrigerators branded as LABUBUThis strategic shift reflects the company’s evolution from its humble beginnings as a simple convenience store to a full-fledged player in the toy industry, with aspirations extending even further.

In the wake of this evolution, Puppet Mart is enthusiastically redefining the universe of its intellectual properties (IPs). A few weeks ago, the company unveiled its new jewelry line under the brand “POPOP”. This latest venture includes an array of products like necklaces, rings, and bracelets, positioned at price points ranging from 249 to 2699 yuan

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While some skeptics claim this appears to mimic the renowned brand Pandora, ardent supporters argue that POPOP’s offerings are unique, driven by their engaging character designs that resonate powerfully with fans.

Puppet Mart has positioned itself as an IP incubator, boasting a staggering array of IPs and stock keeping units (SKUs). Insiders reveal that the company launches at least four new SKUs every weekThe excitement surrounding the conversion of beloved characters like MOLLY, Little Wild, SKULL PANDA, and LABUBU into wearable accessories speaks volumes about the brand’s capability to engage emotion and connect with its audience.

This isn't Puppet Mart's first foray into the world of jewelryPreviously, a collaborative effort with the jewelry brand Chow Sang Sang garnered a positive reputation within the industryThe joint efforts produced an impressive range of gold jewelry pieces, stimulating visibility and sales.

In May 2023, Puppet Mart collaborated with Chow Sang Sang to introduce a line of golden accessories, and in December of the same year, they released six thematic 18k gold pendants and a bead series titled “Wandering into Dreams”, resonating well with consumers and generating impressive sales.

Indeed, Puppet Mart’s leap into the accessories space isn’t just about financial gain; it’s a strategic move towards breaking boundaries and reaching new demographics.

Wang Ning has previously articulated Puppet Mart’s strategic vision centered on globalization and establishing a group focused on its core IPs

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He emphasized managing the trinity of productivity, production relationships, and material resources as fundamental to successAs China’s manufacturing sector achieves efficient and cost-effective production, the potential for further improvement is gradually diminishingHenceforth, the emphasis will lie in adeptly navigating production relationships and resources, which can be realized through collaborations across different IPs, launch of branching products, and so forth.

With fleeting trends, lasting styles become essentialCultivating a strong IP culture is crucial to transcending the tides of fleeting fadsWang Ning’s reflections resonate deeply since Puppet Mart has weathered its own market fluctuations.

Since its listing on the Hong Kong Stock Exchange in December 2020 as "China’s first trendy toy stock", Puppet Mart’s market value skyrocketed to approximately HKD 104.24 billion

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By February 2021, its stock price peaked at HKD 107.6, with market capitalization crossing HKD 150 billionHowever, this meteoric rise was not persistentAs the blind box trend gained popularity, rising concerns over speculative buying and product quality created a downturn, leading Puppet Mart to experience declining enthusiasm among consumers.

Following 2021, Puppet Mart’s growth began to decelerate, leading to significant stock price dropsBy mid-2022, the company’s year-on-year revenue growth had plummeted from 78.7% in 2021 to 33.1%, and its net profit recorded a 7.2% decreaseIn October 2022, market capitalization briefly dipped below HKD 20 billion, with stock prices hitting lows of HKD 9.5.

Nevertheless, international expansion has breathed new life into Puppet Mart, propelling its recovery and growthThe company’s foray into Thailand was astonishing and beyond domestic expectations, where consumers eagerly lined up overnight to purchase a monster toy known as LABUBU, even seeking Chinese resellers willing to pay a premium.

This fervor has echoed back home, allowing Puppet Mart’s market valuation to recover, reaching the billion HKD mark once more and hitting a new milestone

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The successful global exposure furnished Puppet Mart with impressive financial reports; by June 2024, revenue in Southeast Asia shot up to 560 million yuan, a staggering year-on-year growth of 478.3%, making up 41.1% of the area’s total revenue.

In addition to the robust performance in Southeast Asia, Puppet Mart has opened physical stores across countries like Korea, Italy, the Netherlands, Indonesia, France, and the United States, although Southeast Asia remains the cornerstone of its overseas achievements.

As Puppet Mart continues to regain its foothold in Southeast Asia, the market's fascination with its innovative concepts and the expansive potential they introduce is reigniting interestThe barrier to entry in the trendy toy realm isn't particularly high, with competitors such as TOP TOY and 52 TOYS quickening their global outreach efforts, eager to secure stakes in the Southeast Asian market

Even Miniso’s founder sees opportunities abroad, propelling popular Western IP blind boxes and toys into their overseas offerings.

For Puppet Mart, part of its strategy is to keep targeting additional overseas marketsNevertheless, emulating its Southeast Asian success globally and evolving into a sustained IP powerhouse akin to Pokémon, Disney, or Marvel is no simple task, fraught with hurdles.

J.PMorgan’s head of Asian consumer sector research, Yin He, noted that crafting a brand or product tailored to local tastes while maintaining cost-effectiveness is a complex endeavorThe disparities between American IPs and those of Korea, Japan, and Europe are significant due to differing cultural values and consumer preferences across these marketsSuch differences represent a considerable hurdle when integrating brand lines into local markets.

Yin emphasizes that while launching high-fashion risk products could be viable in Southeast Asia due to less stiff competition and a closer alignment to domestic aesthetic values, penetrating the U.S

and European markets will pose a fundamentally divergent set of challenges.

In response to these challenges, Puppet Mart is actively rolling out a variety of initiativesWang Ning has highlighted the company's ambition to carve a distinctive path, with aspirations to model itself on Disney's successful formulaA pivotal development was marked in 2023 with the grand opening of POP LAND, a city-centric amusement parkThis space offers exclusive collectibles, performances, interactive experiences, and games to visitors, showcasing IP value beyond mere sales transactions.

Beyond just a theme park, Puppet Mart is embarking on ventures in film, mobile games, and a myriad of other sectorsWang Ning has asserted that the beauty of the IP industry lies in its extensibility, making it capable of integration across various sectors, with Puppet Mart’s true value manifesting in its IP-centric economic potential.

Not limiting itself to just blind boxes, Puppet Mart has collaborated with prominent brands like Coca-Cola, Uniqlo, and L'Oréal, expanding its offerings into food, fast-moving consumer goods, and beauty products.

Currently, Puppet Mart stands on the threshold of continually diversifying its business pursuits, striving to incubate more innovative ventures