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Okay, so let's see we're down on beat you now of K eleven. I think it's right around the corner. On a recent Wednesday afternoon, I headed to a mall in downtown Hong Kong to drop by one of the hottest shops in town. Oh good, there it is PopMart. PopMart is a toy store. It sells figurines, stuffed animals, and plush dolls. It was packed with shoppers who were there to buy one thing, a mystery box with a surprise toy in it, also known as a blind box toy.
And as I was looking around the store, I saw a woman standing by a display shaking a box with one hand. I saw you shaking a box. What's that all about?
It's about the feeling. For example, this one. I want to get this one right.
Chasel Torres is visiting Hong Kong from a cow. She's shaking the box to try to figure out which character is inside. By the sound of it.
Oh guys, this one is small, right, so mostly when you shake it it's like shakeable. And then if you get those big one, it's like they won't shake that munch.
Chas Ol told me her fifteen year old daughter first started collecting PopMart dolls last year and now she's the one who's gotten addicted to blind box toys. Exactly what chase Ol weighs the blind boxes in her hand, and after shaking several of them, she settles on one.
Oh no, I actually got this one A ready got repeat, So sounds like you're gonna have to get another one not today.
Popmart's blind box toys, including its most famous one, the Labuboo doll, have become a global phenomenon in the last few years. In the US and Australia, fans line up for hours, times in the middle of the night for new releases. But even some of Popmart's biggest fans might not be aware that the brand is from China. Bloomberg Opinion columnist Shuley Wren says that could work to the company's advantage Popmarked.
If you just look at the name, you wouldn't know it's Chinese. La Buopoo looks nothing Chinese at all, So I think for Chinese companies to be more successful overseas, they cannot be to Chinese.
And even though China has been the target of a rising tide of US tariffs. Since Trump's first term in twenty eighteen, PopMart has become hugely popular both with consumers and investors.
In twenty twenty four, its sales more than doubled. And if you look at this stock, they went public in late twenty twenty and it has been up two hundred and fifty percent. This stock is up more than forty percent this year. Despite Trump's trade wars, the demand for its dolls are very inelastic. It's recession proof and terror proof.
Tariff proof that will be the test. Welcome to the Big Take Asia from Bloomberg News. I'm Wanha. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today in the show, the praise for China's blind box toys, can figurines and plushies stokenough demand for Popmart's products to outlast the trade war, And what can other Chinese companies learn from its success
as a country braces for escalating tariffs. PopMart was founded in twenty ten as a variety store. Today, it sells toys and figurines in about a dozen collections, but the top seller is the Lebubu doll. Created in twenty fifteen. Le Bubu is a small, toothy, fierce looking creature that looks like a cross between an l and a rabbit. It's so popular that PopMart now sells more than three hundred variations of the character, and they're often sold out
in stores everywhere from Manila to New York. And Key to the frenzy is the surprise customers get when they open the blind boxes.
Something's something good, something juicy, something wonderful, cool and open up.
There are tons of these unboxing videos on social media.
I got my first Labooboo. It costs dollars. It's so fuggy that I guess it makes the K cute.
Popmart's success with La Boo Boo is largely thanks to Black Pink's Lisa, the lead rapper of the popular K pop band. After she shared her collection on Instagram last year, fans rushed out to buy the figures. Lisa also gushed about the dolls in a Vanity Fair interview in November.
So when this guy has a tail, they call Simobo. If she doesn't have tell, we call her La Boo.
Boo Lisa admitted online that she was obsessed with the Labuo Boo. She says she didn't get what the big deal was, but once she had one, she wanted a second one.
I spent all my money. I go PopMart everywhere. If I fly to New York, I go to Miami, I try to find PopMart there, Paris, you know, everywhere.
The blind boxes can cost from fifteen dollars each to more than two hundred and fifty dollars for limited editions. And while selling merchandise with surprise toys is nothing new, think about the mystery toys and kinder chocolates or cracker jacks. Popcorn Truly says it's been essential to Popmark's explosive growth.
This blind box thing. Basically it's their biggest marketing wing. I think everyone likes to open Christmas gifts right like you don't know what's inside, and that this kind of surprise factor that adds a little bit thrilled.
La booboo. Blind boxes or old and limited quantities online and they sell out fast, meaning people have to go into stores or buy them from vending machines. This hard to find element creates a sense of exclusivity that drives the hype.
If you go to a Chinese store, you cannot get Labubu because of scalpers. The more common ones you can get them online from scalpers at perhaps twenty percent premium, but some of them, the more limited edition ones, they are very very hard to find.
This mania for La Buobu and other Popmarke blind box toys has translated into colossal success for the company. It's sales revenue hit nearly two billion dollars in twenty twenty four, more than double from the year before. The company went public on the Hong Kong Stock Exchange in late twenty twenty and since has become one of the best performing stocks.
If you look at this stock that has been up two hundred and fifty percent, this stock has really become an investor Darling. It's trading at over fifty time times earnings, and by comparison, Disney is trading at only seventeen times. Hello Kitty Sanrio is trading at about forty times. It's tremendous success. And it's found that he owns almost half of the company and this company is worth twenty three billion dollars. So go figure.
PopMart may be a toy store, but its main customers are young adults between fifteen to thirty five. That's according to a market research firm. This group of grown ups are sometimes referred to as kiddolts, adults who enjoy doing or buying things usually intended for children. Truly, says, PopMart is making a lot of money by tapping into this kidd old market because that sector of the population is struggling in China right now.
The Chinese economy is not doing very well right like young people of this generation, unemployment rate is very high. A lot of young educated people, they don't see that how they can climb the MIDI class leader like their parents did. And I think La Bubu gives them a sense of a mental serenity or comfort, you know, like the so called lipstick effect in the economic session, or if you are having a bad time, women will go
out to buy lipstick. It's fifteen twenty US dollars and then you put on lipstick and you just feel a little bit better. Right, But these days, instead of lipstick, I think the young men and the women they like to go for those fluffy toys.
That accounts for the demand in China, but overseas Popmart's appeal is now facing some big headwinds.
Now, the White House says, tariffs on Chinea are now, get this, one hundred and forty five percent.
The President acknowledging the Trump administration has imposed hefty tariffs on all Chinese goods going to the US, where the company wants to expand. Can PopMart strategy survive the trade war and can other Chinese brands successfully It's secret sauce that's after the break. Popmart's blind box strategy has helped it succeed well beyond China. City Group analysts said in December they expect Popmart's global revenue to account for half of total sales this year as a company looks to
expand to North America and Europe. As of December, the company had one hundred and thirty physical stores outside China, and despite the US and China being caught in an increasingly escalating trade war Bloomberg Opinions Truly Wren expects that PopMart Toys will be able to ride out the tariffs for now.
When we talk about tariffs, we say, oh, Americans are not going to buy goods from Timo or Seeing because they're just going to be one hundred percent more expensive, right, But with Labubu demand, it's just that in elastic right now, people are willing to spend more some of buying from skull right. Even if you wanted to pay more, you cannot have it. It's more about supply. That's why people think PopMart at its current stage is teriff proof.
Earlier this month, PopMart shares did see some volatility, following as much as twenty percent in Hong Kong. That's after Trump's tariff whiplash caused financial markets to go on a roller coaster ride. For now, the stock is adding gains again and truly says other companies are already trying to replicate parts of Popmart's formula for success when they're expanding abroad.
Chinese companies all want to go overseas. Overseas profit margins are just much higher compared to China, and there is no price wars in big markets like the US and the European Union and the infact, you start to see this brand called Miniso, the Chinese version of muchI, if I may use that analogy, and they are also selling toys, cheap lipstick, houseware, etc. Right, and that they are trying to to do what popmar is doing going overseas, and they are also starting to use this so called blind
box strategy to jazz things up.
And they're being another key aspect of PopMart strategy.
I think for Chinese companies to be more successful overseas, they cannot be two Chinese popmarked. If you just look at the name, you wouldn't know it's Chinese. Labooo looks nothing Chinese at all. Actually the artist was born in Hong Kong. He grew up and spent a big chunk over his time in the Netherlands and he got the inspiration reading about Nordic fairy tales. That's why Labou Boo doesn't look quite Chinese. You know. She looks like where
the wild things are. She has a boyfriend called Taikoko, and she has buddies. They all look a little bit Nordic and international, and I think that's quite important. Like of course all the Chinese companies, they want to create new markets overseas. Miniso has done very well as well. Minis doesn't look Chinese at all.
In fact, most people think it's Japanese exactly.
Certain brands like shell Me for instance, there electual Vehicles U seven looks like a Porsche.
Just as importantly, PopMart is challenging the idea that China is just a place where cheap, knockoff goods are made.
President Donald Trump keeps on railing against China, saying China is flooding cheap goods and products into the US. But that's not necessarily true. I think some of the mailing China products are getting quite cool, right because Palmer is coming up with new intellectual properties like La Bubu. Right in order to earn customer loyalty, they have to make quality goods that are fairly inexpensive, but they also have to tease and come up with new innovations. It's not
so different from like Japan in the nineteen nineties. Right back then, Japan's asset bubble already went bust, and the Japanese companies are coming up with pretty interesting innovations. Uniclo came up then, right, and then there was muchI, And then suddenly the world says, oh wow, Japanese design is great and the people around the world love them. And I think that's what China wants to be like. They want to be seen as a place where interesting designs can also come.
From whether demand for Labubu can continue to survive economic challenges in China and the trade war with the US remains to be seen. Blind box toys tend to be passing fads and PopMart aspires the hook consumers beyond La Buoboo dolls.
Right now, Palmer is at early stage, so at this point it feels like it's a fad and perhaps investors are as betting that the Palmer can grow for another say five ten years. Right now, Palmer is doing great right the stock prices up. But going forward they have their challenges. The key challenge is how to keep its toys hip, how to have influencers still wear them and
showcase them on Instagram. That means that they have to keep hung, innovating and the coming up with new intellectual properties to keep young people on the hook.
This is the Big Take Asia from Bloomberg News.
I'm wan Ha.
This episode was produced by Noomi Um and Young Young. It was edited by Grace Jennings, ed Tquist, Patty Hirsch and Dong Lu. It was fact checked by Eddie Dun and mixed and sound designed by Taka Yasuzawa. Our senior producer is Nami Shaven. Our senior editor is Elizabeth Ponzo. Our deputy executive producer is Julia Weaver. Our executive producer is Nicole Beamster Bower. Sage Bauman is Bloomberg's head of podcasts.
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