Research on the marketing strategy of Pop Mart in the trendy toy market
Abstract:In recent years, with the development of social economy and the increase of people's demand for culture, the cultural industry has received extensive attention and attention, and the Chinese government is also insisting on promoting the upgrading of the cultural industry and the transformation of the traditional manufacturing industry, and has promulgated a number of guiding policies to actively promote the standardization and benign development of the trendy toy industry. As the "traffic responsibility" of the trendy toy industry, blind boxes have become the category with the widest audience and the highest popularity among trendy toys. As a pioneer of the blue ocean in the blind box industry, after more than ten years of exploration, Pop Mart has built a comprehensive operation platform covering the whole industry of trendy toys, and has formed the awareness that blind boxes are equal to Bubble Mart in the hearts of consumers.
This paper first analyzes the marketing environment of Pop Mart in the two-dimensional market, and then through SWOT analysis, it is believed that the implementation of differentiation strategy is more suitable for Pop Mart at this stage, and finally puts forward specific suggestions for the successful implementation of the differentiation strategy for Pop Mart from the aspects of product and brand differentiation, so as to help Pop Mart solve the current problem and better enter the next stage of competition, and also provide experience for other similar companies in the trendy toy industry.
Keywords: trendy toys; Bubble Mart; Differentiation strategy
1. Overview of Bubble Mart
(1) Overview of the trendy toy industry
With the continuous pursuit of consumer culture and spirit brought about by the stabilization of China's economy, the trendy toy retail market has developed rapidly and has been recognized. Characterized by unique designs, high-quality materials, and exquisite craftsmanship, the industry offers a wide range of products, ranging from traditional toys such as models, puzzles, and building blocks, to innovative products such as 3D printed toys, smart robots, and VR glasses. The market channels mainly include online and offline physical stores and cross-border e-commerce, of which online channels dominate and attract target consumers through global sales and precision marketing. With the increase in consumer demand for personalized and emotional consumption, the market size of trendy toys continues to expand, showing strong growth potential. At the same time, the continuous progress of science and technology has also brought more innovation opportunities to the industry, promoting the development of trendy toys in the direction of intelligence, personalization and customization.
(2) Pop Mart company profile
Founded in 2010, Pop Mart is a company focusing on the R&D, design, production and sales of trendy toys and derivatives, headquartered in Beijing, China. The company has a number of well-known IPs such as Bubble Mart, Molly, Dimoo, etc., and its product line covers trendy toys, accessories, home furnishings, stationery and other fields. After years of development, Pop Mart has become a leading enterprise in China's trendy toy industry, with a wide range of market influence in the world. The company continued to optimize the layout of offline stores, improve the shopping experience of consumers, and continued to expand the international market, further promote localized operations, and the revenue of Hong Kong, Macao, Taiwan and overseas business increased significantly. Adhering to the concept of "creating trends and delivering beauty", Pop Mart is committed to providing consumers with high-quality and creative products, strictly controlling product quality, and strictly managing from raw material procurement to production process and quality inspection to ensure that consumers get the best experience. As of mid-2024, Pop Mart has a total operating income of 4.558 billion yuan and a net profit of 921 million yuan, making it one of the leading trendy culture and entertainment companies in the industry.
2. Analysis of the marketing environment of Pop Mart
(1) Macro environment analysis (PEST analysis)
1. Policy and legal environment
With the country's increasing emphasis on intellectual property protection, Pop Mart, as an enterprise with IP as its core competitiveness, has benefited from stricter copyright protection laws. In 2021, the State Intellectual Property Office successively issued policy documents such as the Notice on In-depth Development of the "Blue Sky" Special Rectification Action", the Implementation Plan for the Implementation of the 2021 "Blue Sky" Action, the Measures for the Collaborative Governance of Violations of Laws and Regulations in the Patent and Trademark Agency Industry, and the Notice on Further Cracking Down on Abnormal Patent Application Agency Behaviors.
2. Economic environment
With the continuous recovery of the global economy and the increase in consumers' disposable income, the demand for personalized and uniquely designed toys is increasing, providing a broad space for the development of Pop Mart. Especially in China, with the rise of Gen Z consumers, they are pursuing trendy culture, personalization and unique consumer experiences, which has driven the rapid growth of the trendy toy market. As a leader in this market, Pop Mart has successfully attracted a large number of young consumers through its unique blind box sales model and rich IP resources. Its well-crafted brand image and product design meet consumers' pursuit of freshness and collection value. At the same time, Pop Mart actively expanded online and offline sales channels, using social media and live streaming platforms to conduct extensive marketing, which further enhanced the brand's popularity and influence.
In addition, Pop Mart also focuses on its internationalization strategy, and has strengthened its global competitiveness by entering emerging markets such as Southeast Asia and collaborating with local artists and designers to launch limited-edition products. In the future, with the growing consumer demand for personalized experiences and limited edition collectibles, Pop Mart is expected to continue to play an important role in the trendy market, achieving rapid business growth and international layout.
3. Socio-cultural environment
Before 2015, there was basically no brand of trendy toys in China, and the trendy toys sold in China were basically brands from Japan, South Korea, the United States and other countries, such as the building block bear toys launched by the Japanese MEDICOM company with the main image of building block bears, BB, and brick bears, and KWAS from the United States. The trendy toys that domestic players can only buy through agents, online shopping or purchasing agents, plus tariffs, logistics and other costs, players get the final physical object, which is often much higher than the initial price, and often cannot get the new style in the first time, let alone the limited edition.
In the international market, not only companies specializing in trendy toys are doing related industrial chains, but also Disney Company in the United States, Lego Company in Denmark, and Nintendo Company in Japan have also made different cross-border products. Most of the Gen Z group likes IP, and they label different groups of people with characteristics because of their different liking for IP, and this group of people is generally keen to share and publish their daily and "grass" copywriting on online social platforms, while the younger generation's consumption outlook is more individual, the pursuit of diversified different experiences, the importance of spiritual consumption and the pursuit of fashion.
4. Technical environment
In the context of the digital era, artificial intelligence, big data, cloud computing, etc. are developing rapidly and popularized in all walks of life, and the trendy toy industry has more exquisite designs and products that can better cater to the audience under the blessing of high technology, and can accurately grasp the entire process and sales process of products, which greatly improves management efficiency. At the same time, Pop Mart has also established a closer connection with consumers through online channels, using new media tools such as social media and live streaming platforms for marketing, which has increased the brand's popularity and influence. In addition, with the continuous development of technologies such as the Internet of Things and artificial intelligence, Pop Mart is expected to achieve a more intelligent sales and service experience in the future.
(2) Micro-environment analysis
1. Analysis of the internal environment of the enterprise
The internal management of Pop Mart is young, energetic and has an Internet mindset. The company's management has led the development of China's trendy toy industry and set the industry standard, and the team is young and energetic, with an average age of about 36 years old. to know the minds of young people; He has rich experience in the retail industry and IP operation, and most of them have Internet work experience, with an average of 12 years of relevant industry experience, helping the company accurately grasp the trend in the field of fast fashion.
At the same time, as a platform-based trendy toy company, Pop Mart has a professional IP incubation and operation team to help the company's IP successfully launch and reach consumers extensively. As of December '20, the firm has maintained close contact with 350 artists, and more than 20 in-house artist discovery teams are proactive in finding quality artists around the world.
2. Competitive environment analysis
China's trendy toy market is still in its early stages, with the market size increasing from 630 million yuan in 15 years to 2.07 billion yuan in 19 years, and the compound growth rate is expected to reach 29.8% from 2020 to 2024. However, the concentration of China's trendy toy market is low, the industry potential is huge, the market gap is more, and the industry competition is very fierce. FOR EXAMPLE, THE SEARCH FOR UNICORN, FOUNDED IN 2018, HAS ATTRACTED A LOT OF FANS BY RELYING ON ITS MANY IPS SUCH AS RICO, FARMERBOB, AND ZHUO DAWANG, AND IN DECEMBER 2020, LOOKING FOR UNICORNS BECAME THE ONLY TRENDY TOY BRAND IN THE TMALL 2020 SNEAKER CON SNEAKER TREND EXHIBITION. 1983 is an innovative way to play the blind box, through the two-dimensional code in the box as the carrier, consumers can scan the two-dimensional code in the box to participate in various box surprise activities after purchasing blind box products, so as to stimulate consumers; Promotional collection stores such as MINISO have seized the low-price blind box market through the form of low-cost blind boxes. The entry of these competitors quickly occupies market share by relying on their own different advantages, making Pop Mart competitive in the future development.
3. Consumer analytics
Trendy toys are developed from the two-dimensional culture, and as a subculture, the two-dimensional culture is a representative of personality in the consumer group. The younger generation is gradually becoming the master of society, how to distinguish it from other times in life, and how to highlight its personality is the demand of the younger generation. Trendy toys just cater to such psychological needs of consumers. Trendy toys represent personality, different trendy toys represent different attitudes to life, put trendy toys at home, put on the desk, and display them on social platforms, which can show the life attitude of trendy toy consumers to the people around them, express their own personality, label them, and meet consumers' identity for themselves.
Pop Mart in China to open the competition of trendy toys with blind boxes, and first occupy a place in the women's trendy toy market, take the lead in obtaining consumer preferences, and continue to consolidate consumers' consumption preferences through exhibitions, fun and other channels, forming good brand loyalty and positive word-of-mouth, such prerequisites provide a good foundation for the future development of Pop Mart.
3. The strategic choice of Pop Mart
(1) SWOT analysis
1. Advantages
High brand awareness and influence. Nowadays, when it comes to trendy toys and blind box products, the first thing that comes to consumers' minds is Bubble Mart, as the earliest Bubble Mart to enter the trendy toy market in China, more than 10 years of market accumulation has cultivated a good first-mover advantage and brand recognition for the company, thus bringing more development opportunities to Bubble Mart, and its market share has always ranked first in the industry.
Marketing promotion and commercialization capabilities. Bubble Mart's soaring ascent is inseparable from the company's strong marketing ingenuity and business thinking, and the introduction of the blind box model of "fixed + hidden" attracts consumers' attention and amplifies the sense of surprise, stimulates more purchase behaviors, and successfully exits the circle. In terms of marketing, Bubble Mart targets its own young customers, precision marketing, and uses multi-channel social media to establish deeper links with consumers.
Strong online and offline channel capabilities. As a pioneer in the industry, Pop Mart has maintained its own channel innovation in addition to continuously expanding offline retail stores and e-commerce channels. Taking the lead in introducing a robot store with lower operating costs, supplementing the retail store reach gap and collecting more customer data, the investment in the robot store also ensured the company's revenue in the 2020 pandemic year. In addition, the trendy toy industry has the characteristics of "starting with appearance, falling into social", Pop Mart has begun to build its own community since 2016, and uses the unique ability of consumers to bring more possibilities to products, so as to gain more competitive advantages. The company has established 800 communities and attracted more than 100,000 users to join, strengthening the social nature of trendy toys and increasing fan stickiness, thereby increasing product repurchase rates and building brand loyalty.
2. Disadvantages
The product category is not rich enough, and the audience is single. The trend toy industry is currently highly fragmented in the market, compared with the competitor TOPTOY company for the whole people in all categories and full price routes, the style and pricing of Bubble Mart products are relatively simple, mostly cute and have no story background of Tang glue dolls, and the fan audience is mainly aimed at women aged 15-40, which limits the company's market development.
The IP innovation ability is weak, and there is a lack of IP system and content support. According to the prospectus of Pop Mart, from 2017 to 2020, MOLLY's revenue accounted for 89.4%, 62.9%, 32.9% and 14.2% respectively. The R&D and innovation capabilities of Pop Mart's new IP need to be improved, and it has not yet discovered its own IP that surpasses MOLLY. In addition, the company's various self-owned IPs have not formed a system, which makes the IP life cycle shorter, and it is difficult to form an IP image with a strong sense of substitution and empathy like Disney and Marvel.
3. Opportunity
The upgrading of information technology and the popularization of e-commerce sales have brought more industry opportunities. The continuous improvement of big data statistical technology and e-commerce platforms has brought more possibilities for the penetration of the trendy toy industry to more consumers, brought multiple purchase channels to fans, and established a circle of their own for consumers to meet the needs of fans for exchanging products and socializing. Innovative Internet play can help trendy toy companies continue to attract young people and get more and more young people to join. The upgrade of informatization and intelligence can also provide more data analysis technology for the trendy toy industry, help trendy toy companies better judge the needs of fans and the market, and bring more diversified development opportunities to the company.
The development of the cultural and entertainment industry has brought new opportunities to the trendy toy industry. China's "14th Five-Year Plan" and the outline of the long-term goals for 2035 put forward the vigorous construction of cultural industries and brands, providing excellent policy guarantee for the development of cultural and entertainment industries, and continuously promoting the healthy development of trendy cultural enterprises.
4. Threats
Homogeneous products in the industry intensify competition. Bubble Mart has successfully used blind box products to get out of the circle, making various companies copy the blind box model, hoping to get a piece of the pie, and the imitation of film and animation IP and museums has exacerbated the phenomenon of product homogenization, resulting in uneven product quality and consumer aesthetic fatigue, resulting in a decline in product sales.
Consumption upgrading and iteration are fast, and consumer preferences are changing. The rapid development of network technology and economic affluence continue to give rise to consumption upgrades and product updates, the fast-paced and fragmented era makes people's life pressure increase, consumption has become the best choice for people to release the pressure of life, consumption habits and consumption preferences are also changing rapidly, to the trend of toy companies to bring more investment in the construction of the Internet system, if there is no timely prediction of consumption habits will bring about the loss of the consumer market. In addition, the speed of consumption update iteration makes consumer preferences changeable, Bubble Mart products from IP acquisition to the consumer side takes at least 8 months, high-end large-size trend toys processing and customization requirements are more, but the processing and production time of trend toys often cannot catch up with the changes in consumption and trend market, resulting in a very low product value and a lot of losses to enterprises.
(2) Strategic choices
In terms of industry environment, Bubble Mart belongs to the emerging trend toy track that has grown rapidly in recent years. Bubble Mart has opened up the market of China's trendy toy industry with the rapid niche emergence of blind box products, and the industry recognition is getting stronger and stronger, and the age of the fan audience is also expanding. The consumption boom of customization and experience continues to give rise to the trend of the toy industry to diversify and mature. The emphasis on aesthetic innovation and spiritual identity has led to a younger consumer base in the industry, who are more receptive to price on the one hand, and more value the design and sophistication of products on the other. Therefore, the characteristics of the industry are conducive to the implementation of the company's differentiation strategy, promote the clear product positioning of Pop Mart, and help reverse the company's existing product homogenization problem.
In terms of the company, Pop Mart expands the global expansion of trend culture with the brand culture of "creating trends and delivering beauty", and aims to build a leading domestic trendy toy company. Unlike most retail companies, the company adopts the direct way to open stores, the store opening speed is not fast, but through the direct store can better control the company's brand reputation and product quality, in the store decoration, furnishings, service, location selection and other details for fans to create a trendy toy physical kingdom. In recent years, Pop Mart has faced the rising prices of raw materials and the continuous improvement of machine mold opening accuracy, and the cost of products has been increasing.
Overall, adopting a differentiation strategy can help Pop Mart better play the company's philosophy, improve consumers' brand recognition, and reduce price sensitivity, thereby helping the company cultivate a competitive advantage.
Fourth, the implementation strategy of the differentiation strategy
(1) Strengthen brand competitiveness
Pop Mart needs to extract a more recognizable and well-known "brand symbol" on the established brand recognition, strengthen the unity and sense of identity of Pop Mart's trendy toy products, and capture the attention of more consumers with concise and deeply rooted LOGO language, so as to consolidate the brand recognition. For example, the famous trend brand KAWS's distinctive cross-eyed and skull makes the brand stand out, even if you don't know what its name is, you know that it is one of the most sought-after designs among young people at the moment.
Secondly, in offline stores, strengthen the atmosphere of the brand differentiation of Bubble Mart. You can choose stores with large traffic in first- and second-tier cities to build a selected store, and display the historical origin of trendy culture, the design artwork and production process of trendy toys, so that consumers can feel the trendy culture more directly and understand the source of the trendy toys they buy, and increase the sense of experience while entertaining and highlighting the brand difference. In addition, you can open up a trendy toy design experience area on site, increase the participation of fans by observing the designer's drawing process on the spot, provide lettering services and other forms, create a stronger trendy cultural atmosphere, and use the store to convey the depth and declaration of the Bubble Mart brand.
(2) Shape differentiated product routes
In the face of the ever-expanding trendy toy track and the continuous emergence of various homogeneous trendy toy products, Pop Mart needs to start from the product itself and achieve a differentiated strategy by innovating to create differentiated products. First of all, Pop Mart needs to improve the mid-end and high-end product lines, and gradually get rid of the "blind box first share" formula at this stage. By improving the sense of product design and trendiness, we can create high-end trendy toy products, and gradually get rid of blind box products. Constantly use innovation to launch high-end products to redefine brand culture, in the case of China's trendy toy culture is becoming more and more popular, Pop Mart can cooperate with international well-known fashion brands and stars to launch higher-end customized trendy toys and inject new product types into the company. In addition, we choose a wider range of material types to create a higher-end product line, such as MOLLY, which creates metal materials, wood materials, and fabric textures, and creates new product lines.
(3) Optimize IP commercialization capabilities
In order to extend the life cycle of IP, it is necessary to continuously improve the commercialization capability of IP in multiple dimensions. First of all, the combination of offline and online creates more contact space and grabs mainstream media traffic to reach the daily life of fans in an all-round way. On the basis of the more than 200 trendy toy stores that have been formed by Bubble Mart, we can strengthen the sense of experience and participation, cooperate with art museums, script killing, aesthetic experience halls, etc., and maintain the popularity of the exhibition hall and promote the vitality of IP by regularly inviting trendy stars and trendy toy designers. In addition, we can follow the example of Sanrio, which also uses HELLOKITTY as the IP without content, to open a Bubble Mart theme park and hold Christmas and Halloween activities from time to time to attract more young people to visit, so as to bring the distant image of the IP into real life and bring the distance between the IP and fans. At the same time, focusing on WeChat, which everyone must use every day, we have launched WeChat emojis, WeChat red envelope skins, and Moments wallpapers to penetrate more potential users, and continue to accumulate and occupy cyberspace.
V. Conclusions
With the prevalence of perceptual consumption and taste consumption, the trend toy industry as a rising star of the times has gradually entered the public eye, which has prompted China's trend toy industry to enter a period of rapid development, and there has been intensified competition in the industry and high consumer requirements, so that the development of various trend toy companies is full of challenges.
The selection of Bubble Mart, the largest and fastest-growing trendy toy company in China at this stage, as the research object is based on the company's representativeness and innovation in the trendy toy industry. Pop Mart took the lead in using blind box products in China to gain massive attention while quickly out of the circle, but with the entry of cutting-edge companies such as TOPTOY and the mature stage of the domestic trend market, the company's competitive advantage gradually declined. How to better grasp the changes in consumption habits of the times and use the spiritual and cultural needs of fan groups to stabilize the development of Pop Mart is an important topic for the company today. This paper uses PEST analysis, SWOT analysis, etc., combined with the actual situation of Pop Mart, to put forward a differentiated competitive strategy for the company, hoping to help the company transform and upgrade through the implementation of the differentiation strategy, and continuously transform and innovate to transform the industry uncertainty into the company's internal competitiveness, so as to make Pop Mart go further and further.
