With a market capitalization exceeding 20 billion yuan, "China's Lego," Bloco, has successfully gone public! Analysis of popular IP including Disney, Lego, Bandai Namco, Pop Mart, Bloco, and MINISO.
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Editor-in-chief | Yang Ming
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The capital market has never lacked new trendsetters. This time, Bruco, a "potential stock" in the toy industry, has successfully attracted everyone's attention. Relying on the booming development of the "valley economy," Bruco, known as the "Chinese version of Lego," finally successfully landed on the Hong Kong Stock Exchange on January 10. On its first day of listing, its performance was stunning, opening more than 80% higher. Although the stock price rebounded to 40.85% at the close, its market value exceeded HK$20 billion. This achievement still demonstrates the capital market's high recognition of Bruco.
Looking back at Bruco's development history, before 2022, it had been facing losses. Until 2022, cooperation with popular IPs such as Ultraman and Transformers brought about a turning point, its financial situation gradually improved, and it successfully turned a profit in 2023. However, in the toy industry where the IP economy is prevalent, although Bruco has its own IP, its popularity still lags behind that of leading brands. Now, having landed on the capital market, Bruco is at a new starting point. Whether it can become the next "Pop Mart" is attracting much attention.
Overview of the Trendsetting Industry
Under the wave of consumption upgrades and the booming development of the cultural and creative industries, the trendy toy industry has emerged as a highly vibrant and potential new field. It deeply integrates trendy culture, artistic design, and toy manufacturing, attracting consumers of all ages with its unique charm. Its market scale continues to expand, occupying a key position in the global entertainment consumption landscape.
Market Size and Growth Trend
(1) Overall Market Size
In recent years, China's pan-entertainment industry has developed rapidly. The market size in 2024 is expected to reach nearly 2 trillion yuan, with a compound annual growth rate (CAGR) of nearly 14% in the past 5 years. Among them, the trendy toy market size reached 90 billion yuan, and its growth is stable, with a CAGR of 12% from 2019 to 2024. It is expected to climb to 130 billion yuan in 2027. This is due to the increase in residents' disposable income, changes in consumption concepts, and the strong pursuit of personalized products with rich cultural connotations by the younger generation, laying a solid consumer foundation for the trendy toy market.
(2) Market Size of Sub-categories
In the trendy toy category, building blocks, figurines, cards, plush toys, etc., each have their own market performance. Building blocks, with their rich creative gameplay and broad audience base, have a dominant position in market size. Lego, with its deep brand heritage and continuous innovation, leads the development of the building block market. Figurines, due to their high degree of restoration of popular IP characters, are favored by anime and game enthusiasts, and their market size is also considerable. Trading cards, with their collectible gameplay and rich IP collaborations, have shown significant market growth. For example, Card Game, with its popular IP-licensed products in the collectible card game field, has achieved rapid growth, with a projected CAGR of 20.6% from 2022 to 2027. Plush toys, with their soft and cute images, occupy a certain share in the market. Jellycat, with its unique design and high quality, stands out in the high-end plush toy market.
Industry Supply Chain Analysis
(1) IP Creation and Licensing
IP is the core driving force of the trendy toy industry. Its creation covers original development in various cultural fields such as animation, film and television, games, and literature, as well as secondary creation and adaptation of classic IPs. Disney, with its strong animation film production capabilities, has incubated many top global IPs, such as Mickey Mouse, Donald Duck, and the Frozen series. Through copyright operation and licensing cooperation, it extends the influence of IP to the trendy toy field, realizing cross-media value realization. In the licensing stage, it involves complex rights allocation and cooperation models, including buyout licensing, guaranteed payment + sales sharing, etc. Licensors and derivative operators work closely together to jointly explore the commercial potential of IP, expanding IP application scenarios from commodity licensing to themed activities and film and television adaptations.
(2) Product Design and Production
Product design needs to closely combine current trends and the aesthetic preferences of the target audience, cleverly integrating IP elements into toy design, and focusing on innovation in shape, color, material, and function. The design team communicates in depth with the IP party to ensure that the design scheme accurately restores the essence of the IP and meets market demand. The production stage relies on professional OEMs or the brand's own factories. OEMs have professional technology and scale advantages in mold making, injection molding, and painting processes, and can efficiently complete production tasks. Self-owned factories, such as Lego's globally deployed factory network, are more conducive to quality control and optimization of production process innovation, ensuring product quality and supply stability.
(3) Sales Channels
Online sales leverage the traffic advantages of comprehensive e-commerce platforms (such as Taobao and JD.com) and the precise positioning of vertical trendy toy e-commerce. Through exquisite product display pages, user review interaction mechanisms, and online marketing activities, products can widely reach consumers. Offline sales build brand image displays and experience spaces through brand-owned stores and authorized specialty stores. For example, the immersive displays and blind box drawing interaction sessions in Pop Mart's offline stores enhance consumer purchasing desire. Retail collection stores (such as Miniso and Miscellaneous Goods) provide diverse sales scenarios for trendy toys with their rich product lines and channel layout advantages. In addition, themed exhibitions and trendy toy markets bring together numerous brands and works by niche designers, becoming important platforms for new product launches, fan exchanges, and cultural dissemination, promoting trendy toy sales and cultural promotion.
Competitive Landscape Analysis
(1) Analysis of Global Leading Companies
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As the world's largest comprehensive entertainment company, Disney dominates the industry with its deep IP reserves and strong content creation capabilities. Through acquisitions of Marvel, Lucasfilm, etc., it continuously expands its IP universe, covering classic animated characters and popular film and television series. In terms of channels, it integrates directly-operated stores, theme parks, and licensing cooperation networks to build a comprehensive consumption scenario. In the supply chain, it uses an OEM model to ensure product supply. Relying on IP-licensed trendy toy products and theme park derivative products such as "Frozen" and "Star Wars," it achieves diversified IP monetization, consolidates its industry position, and continues to lead global entertainment trends. Its brand influence and commercial value are unparalleled in the global entertainment industry.
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As the leader in the building block category, Lego is unique in its product craftsmanship and design innovation. Years of technological research and development and accumulated experience have resulted in building blocks with exceptional precision and assembly experience. Its unique design language inspires consumer creativity and fosters a large fan community and user-created ecosystem. A globally distributed factory system ensures production supply and quality control, with strict quality checks from raw material procurement to finished product shipment. In market expansion, Lego continues to cultivate its core building block business, expanding into derivative businesses such as education and theme parks, and collaborating with numerous popular IPs to launch joint series, such as the Lego Star Wars series. Driven by innovation, it maintains steady growth and a leading advantage in the building block market, becoming a global benchmark for quality and creativity in the toy industry.
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Originating from model toys, its unique competitive advantage is achieved through collaborative development with the Japanese animation industry. Deeply involved in the toy-making process of classic Japanese anime IPs, from early Astro Boy toys to Gundam, Dragon Ball, One Piece model figurines, etc., it uses advanced manufacturing technology to reproduce IP images and scenes. It innovates the "production committee" model in IP authorization cooperation, integrating industry chain resources to share profits. Its business covers diverse fields such as toys, games, and cards. Through internal structural reforms, it focuses on maximizing IP value, continuously launching popular products such as One Piece cards. In the Japanese and global trendy toy market, it occupies an important position with its profound anime background and innovative products, and is an important force in the output of Japan's cultural and creative industries.
(II) Domestic Competitive Landscape
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It was the first to rise in China's trendy toy market, creating a blind box marketing model that triggered a boom in the industry. It has built a large IP matrix, including original hit IPs such as Molly and PUCKY, and actively introduces cooperation with well-known IPs such as Disney and Universal. It maintains IP popularity through continuous innovation and limited-edition strategies. With a full-channel layout online and offline, offline stores create trendy experience spaces, and online e-commerce platforms strengthen digital marketing and community operations; supply chain management is optimized to improve replenishment efficiency and new product launch speed. Product design emphasizes the fusion of artistry and collectability. With innovative business models and operational strategies, it has become a leading enterprise in China's trendy toy industry, promoting the standardization and scale development of the industry, and leading the dissemination of local trendy toy culture.
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Relying on its strong global supply chain and channel expansion capabilities, it has rapidly expanded into the trendy toy field. It enters the market with high-cost-effective products and collaborates with many well-known IPs to launch peripheral trendy toys, such as Disney and Marvel series products, leveraging IP traffic to attract consumers. Its offline store network is spread across the globe. Through refined operations and a highly efficient logistics and distribution system, it achieves rapid replenishment and new product stocking, and has channel advantages in emerging markets and second- and third-tier cities; it also develops online e-commerce, integrating online and offline resources to create an omnichannel retail ecosystem. With economies of scale and channel synergy, it stands out in the trendy toy market competition and becomes an important force in promoting the popularization of trendy toy consumption.
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Focusing on the building block category, it invests heavily in building block design and development. Its products are characterized by high quality, creative gameplay, and educational attributes. It actively obtains licenses from leading IPs, such as Ultraman and Naruto, to launch a series of joint building block products, precisely targeting children and building block enthusiasts. It develops online and offline channels in coordination, establishing close cooperative relationships with large supermarkets and toy specialty stores to expand its sales network; online, it leverages e-commerce platforms and social media marketing to enhance brand awareness and product sales. In the building block trendy toy sub-sector, it is accelerating its rise through IP cooperation and product innovation, becoming an important competitor in the domestic building block market and effectively promoting the popularization and development of building block trendy toys in China.
Industry Development Drivers
(I) Consumption Upgrade and Growth of Spiritual and Cultural Needs
With the improvement of residents' living standards, the consumption structure has undergone a profound adjustment, and the proportion of spiritual and cultural consumption is increasing. As a cultural and creative product, trendy toys carry emotional, aesthetic, and social value, meeting consumers' needs to express individuality, pursue a quality life, and cultural identity. It has become an important vehicle for meeting spiritual and cultural needs. In the wave of consumption upgrades, market demand remains strong, especially among young consumers, forming a strong consumer pull and driving the vigorous development of the industry.
(II) Flourishing IP Ecosystem
The prosperity of the cultural industry has given rise to a large number of high-quality IPs. Blockbusters have frequently emerged in the fields of film and television, animation, games, and literature, such as "Harry Potter," "Genshin Impact," and "Douluo Continent," providing trendy toys with abundant creative materials and fan bases. A mature IP operation system promotes the cross-media and cross-industry flow and value amplification of IPs. Trendy toys, as a key link in IP derivative products, achieve rapid development by leveraging IP popularity and fan economy. IP authorization cooperation has become a core strategy for trendy toy companies to gain a competitive advantage and expand market boundaries, deeply binding the development process of the IP ecosystem.
(III) Diversification of Channels and Digital Transformation
The popularization of the Internet and the rise of e-commerce platforms have broken the time and space limitations of traditional retail, opening up a vast online sales space for trendy toys, reducing marketing and sales costs, and improving product circulation efficiency and market coverage. Digital marketing methods such as social media, live streaming, and short videos are booming, helping trendy toy brands accurately target their target audience, strengthen brand communication and fan interaction, and give rise to online community culture and consumption trends; offline physical stores are constantly upgrading under the trend of experiential consumption, integrating themed exhibitions, interactive experiences, and limited-edition sales activities to create immersive consumption scenarios. Online and offline channels complement each other, jointly empowering the sales growth and market penetration of the trendy toy industry.
Industry Challenges
(I) IP Homogenization and Lack of Originality
The excessive pursuit of popular IPs in the market has led to serious homogenization of trendy toy products. Some companies rely on licensed IPs and lack the motivation for originality, resulting in little product differentiation and intensified competition. In the development of original IPs, they face difficulties such as a shortage of creative talent, long R&D cycles, high capital investment, and high market risks, which restrict the industry's innovative vitality and sustainable development capabilities. This easily leads to price competition and market aesthetic fatigue, which is not conducive to the long-term healthy development and brand building of the industry.
(II) Uneven Quality and Counterfeiting and Infringement Issues
The rapid development of the industry has attracted many participants. Some companies ignore product quality control in order to reduce costs, resulting in uneven quality of trendy toy products on the market, damaging consumer experience and industry reputation. At the same time, counterfeiting and infringement problems are rampant, and illegal imitation of popular IP trendy toys are flooding the market, seriously eroding corporate profits, disrupting market order, and undermining the enthusiasm for original design. This increases the cost and difficulty of corporate rights protection, hindering the standardized and branded development of the industry, and urgently needs to strengthen market supervision and legal regulations.
(III) Intensified Market Competition and Industry Restructuring Risks
The popularity of the designer toy market has attracted a large influx of capital, leading to a rapid increase in the number of enterprises and intensified competition. Leading companies are continuously expanding their market share through brand, IP, channel, and scale advantages, squeezing the survival space of small and medium-sized enterprises; new entrants face significant challenges in market positioning, product innovation, and channel expansion, accelerating industry consolidation and reshuffling. Increased market competition may trigger vicious competitive behaviors such as price wars and marketing wars, increasing operational costs and market risks for enterprises, and testing their comprehensive competitiveness and strategic adaptability.
Investment Advice and Future Outlook
(I) Investment Advice
Considering industry development trends and the competitive landscape, it is recommended to focus on enterprises with the following advantages: First, enterprises with strong original IP creation and operation capabilities. If they can continuously incubate blockbuster IPs and build a complete IP ecosystem, they will gain an initiative in market competition. For example, Pop Mart's successful experience in original IP cultivation and operation provides a reference for the industry. Second, enterprises with leading advantages and scale effects in segmented categories, such as Bruko, which achieves differentiated competition in the building block field through technological innovation and IP cooperation. Third, enterprises with comprehensive channel layouts and strong online-offline integration capabilities. Miniso's global channel network and efficient operation model demonstrate strong market penetration and risk resistance. Such enterprises are expected to stand out in industry consolidation and bring long-term value returns to investors.
(II) Future Outlook
Looking ahead, the designer toy industry has broad prospects. In the domestic market, as consumer groups continue to expand and consumption demands diversify and upgrade, designer toys will deeply integrate into mainstream cultural consumption, and the market size is expected to grow steadily. Industry standards and norms will gradually improve, driving enterprises to enhance product quality and innovation capabilities, and accelerating industry consolidation and brand centralization. In the international market, Chinese designer toy companies, with their supply chain advantages and potential for cultural and creative output, will expand into larger markets in Europe, America, Southeast Asia, and other regions, as evidenced by the initial success of overseas expansion by companies like Pop Mart and Miniso. At the same time, global designer toy cultural exchange and integration are accelerating, and the application of new technologies (such as 3D printing, AR/VR) and new materials will foster more innovative products and business models, injecting new impetus into industry development, helping the designer toy industry reach a new peak in the global cultural and creative industry, and becoming an important growth engine and new carrier for cultural communication.
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