China slammed ‘blind box’ addiction — but that shouldn’t faze Pop Mart

Beijing may have warned of “Blind Box” games, but analysts are betting on that Pop Mart International – The company behind Labubu dolls – one of the most important brands for consumers in China will remain this year.

in Editorial June 20, Chinese government media has called for more strict regulations about selling games and blind trading cards for children under the age of eight, such as verifying buyers of buyers upon payment and requires parental approval in online transactions.

Without the Beijing-based Pop Mart, the paper criticized companies to lure young children by spending largely on the “blind cards” and “mystery boxes”-a key model for Pop Mart’s attractiveness. The company often sells its dolls in a blind box for buyers who do not know what the character is inside to open it.

In sequence, the Pop Mart share price decreased by 12.1 % for the week ending June 20, which represents a sharp decline since late 2023, which led to a gathering in a large gathering that sent its shares more than 600 % over the past 12 months.

Its stock has regained some land since then, as she homes near high levels in mid -June.

It reminds us of the government media comment on BlindBox games about Beijing’s video games in recent years, which were aimed at Game addiction supplements And the purchase is not subject to supervision in the game by minors.

This led to restrictions on the period in which the palace can play video games, as part of the sector level Schedule billions of dollars in The value of giants in China.

“The size of the effect of Chinese policy makers [on businesses] Alfredo Montfafe Hilo, the chief adviser to the Chinese Center at the Conference Council, a research tank, said it is much higher in other countries.

However, analysts look at excessive organizational winds such as Gen Zers and Millennials, instead of young children, are the main demographic of consumers from Pop Mart.

Montovar Hilo said that Bob Mart will be greatly isolated from intensifying organizational scrutiny because it targets younger adults with sufficient purchase.

Jeff Zhang, a stock analyst at Morningstar, said that local peers who focus on minors are more likely “are severely affected.”

Another factor that can weaken the organizational impact on Pop Mart. Zhang said he was increasingly driven by external sales, especially in Southeast Asia. The share of its Chinese revenue will decrease to about 30 % in the next ten years. Pop Mart External sales In 2024, it already exceeded the total sales of the company in 2021.

Pop Mart derived about 61 % of its revenues from China, the mainland in 2024, according to The annual reportThe rest mainly drew from Southeast Asia and East Asia, as well as Hong Kong, Macau and Taiwan.

Its sales in North America grew more than 550 % last year of the previous year, and the company has 90 Material stores and the sale machine Pots throughout the United States.

HSBC expects Pop Mart Foreign Revenue in 2025 to more than twice to 14 billion yuan ($ 1.95 billion) from 2024 on strong sales momentum from “Labubu 3.0”, which was released in April. This number will represent more than half of its expected revenues this year, up from 39 % in 2024.

This depends only on the growth of the meteorite that the company enjoyed last year, when revenues multiplied more than twice to 13.04 billion yuan, while profits have multiplied approximately three times.

POP Mart sells the blind games at prices ranging from about 59 yuan to 5999 yuan. Universities often spend hundreds or thousands of yuan, and can bring rare models Six numbers amounts In the second, it reminds us of the government media comment on Blind-Box Games Beijing on video games a few years ago, and hand auctions.

“The point with blind boxes are the unknown, and uncertainty. There is some inherent curiosity about what a person will get. This achieves a certain degree of excitement when people buy blind boxes,” said Chris Wong, chief clinical psychologist at the Resealians Clinic in Singapore.

“When this uncertainty is resolved,” he said, in reference to how long the blind box opens, “[that] It usually comes with some pleasant feelings, such as fun, surprise and joy. This also plays a role in why people continue to do so. “

The psychologist said that seeing others share their own experiences in blind funds on social media, and this response from the brain, because it meets the human need for social communication.

Pop Mart He made a rare apology Last month, after increasing requests in requests, it caused delay in delivery, as consumers complain over the Internet that the requests are not received after weeks after their status.

Analysts said fake games may reduce the reputation of Bob Mart at home and abroad, despite the government’s efforts to intensify scrutiny at export checkpoints.

Customs at Ninjo Port, one of the busiest ports in the country, It seized more than a million Labubu dolls in the first six months of this year, due to intellectual property violations and smuggling fears.

To keep its new brand, Pop Mart took a page from the Disney Playbook book, doubled the expansion of its IP portfolio, and its release Purchase stores, Film Studio and park.

Join the founder of the pop, Mart Wang Ning, to his ambition to convert the company into “Disney China.”

But these initiatives do not come cheap.

“The production of animation requires a strong team for storytelling that can constantly present convincing novels,” said Echo Gong, an independent independent retail consultant in Shanghai. She added that a recreational garden management also requires a completely different range of skills and a much larger investment than just selling games.

Evelyn Cheng from CNBC contributed to this story.