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Insight | Case Study: Toy Story Inside Pop Mart's Blind Boxes

September 5, 2020

A chart of popular goods among China's post-95 consumers last year listed toy figures as the most wallet-draining, with a year-on-year sales increase of 189.7 percent on Tmall, an online retail platform under Alibaba, alone. Riding this wave, Pop Mart, a retail chain ten years ago, is now a leading toy brand beloved by young Chinese.

With detailed research and interviews with the firm's founder, Zhao Longkai, finance professor with Peking University's Guanghua School of Management and his team decipher the brand's success against the background of China's consumption structure upgrade and review its opportunities and challenges along the way.

From snack stickers to capsule toys, every generation has its own collectible obsession, and the randomness, irritating as it might be, is part of the appeal. Blind boxes, the latest craze in this fashion, combines collectible toy figures and the thrill of not knowing what it is inside. For many Chinese youngsters, the blind boxes they've bought contain Molly, a doll with big acid blue eyes and pursing red lips that has earned Pop Mart 450 million yuan (65.6 million U.S. dollars).

For the company, the path to success has not been straightforward. Prior to Molly, Pop Mart endured its own share of hard times in the market, and its current business has yet to expand overseas. The road ahead will be long and winding if the firm wants to build this doll into a world-renowned figure that rivals Mickey Mouse.


Founded in 2010, business was good for Pop Mart's chain stores selling light industry goods. However, with the birth of e-commerce and similar sellers of light industry products mushrooming, the firm gradually lost its competitive edges and profits dropped.

In late 2015, the firm studied sales data and found that a Japanese toy figure brand “Sonny Angel” was particularly popular, with its products contributing nearly one third of the chain's annual sales. Pop Mart founder Wang Ning believed that toy figures will be a market with huge potentials that could form close interactive relations with consumers.

Wang then posted a question on its microblog account: “What do you like to collect besides Sonny Angel?” “Molly” was the word frequently popping up in the answers. Wang wasted no time to visit Kenny, Molly's designer, in Hong Kong, and saw a houseful of brilliant designs that had yet to be commercialized.

In March 2016, Pop Mart became the exclusive authorized manufacturer and seller of Molly in the Chinese mainland after three months of negotiations. The firm spent around a million yuan, a staggering amount by industrial standards than, developing models and manufacturing the first series of Molly. Meanwhile, most competitors, including some that had their own intellectual property of toy products, were reluctant to invest this much, and they had good reasons to be discreet — toy figures were still a niche market in China and nobody could predict consumers’ reactions once these dolls came out.

Luckily, Wang hit the jackpot. The first set, consisting of 12 dolls of different styles, was priced at 708 yuan. At the brand's Tmall store, 200 sets, the projected amount to be sold in a day, went in four seconds. Even its brick-and-mortar stores went soon out of stock.


Since that initial success,Pop Mart started exploring new business areas such as scouting global artists, managing intellectual property,consumer relations and promotion of toy cultures, forming its own highly interactive relations with artists, fans and suppliers while creating an evolving toy eco-system characterized by an IP-oriented,full-chain,one-stop toy platform.

Based on experiences from the partnership with Kenny, the firm set up a special team scouting for both reputable and emerging artists with whom it can form IP partnerships to enrich its toy brands and series. In such a partnership, artists provide their original designs,and Pop Mart is responsible for developing models and manufacturing products based on their designs.

Meanwhile, the firm has developed its own IP incubation mechanism that can influences its products’ life cycles and unleashes their full potentials. Under such a system that encompasses IP development, design, manufacturing, promotion and sales, Pop Mart's own design team discusses with artists how to fine-tune their designs in accordance with the IP figure's style and consumers’ feedbacks so as to make their products more attractive. It helps artists focus on design while the firm handles the commercializing part.

Pop Mart also keeps a close eye on the total number of products and the frequency of introducing new ones to prevent over exposure so that their products will always remain sought-after and collections will always be unique and precious in the eyes of their owners.

In addition, the firm explores crossover partnerships with other brands to offer limited editions of their toy figures and other related merchandises to keep their products fresh and extend their life cycles.



In Sept. 2017, Pop Mart held Beijing Toy Show, the first large-scale toy exhibition in China, and its Shanghai Toy Show followed in April 2018. The two shows have since become annual events that each lasted three days.

Many shopping malls eagerly pursued IP authorization from Pop Mart so that they could put on their own toy shows to attract foot traffic. These offers pushed up the firm's IP authorization fees and also bolstered exposure of its own products. It is now enhancing its IP management businesses in a bid to rake in more IP-related earnings.

In 2016, Pop Mart released the country's first toy products-themed social-networking and e-commerce app, providing toy news and artists’ interviews, running communities for toy lovers to find like-minded friends and showcasing users’ own toy collections. Its own membership section offers promotional info and privileges to attend special events and buy limited-edition products, while members also provide valuable data and feedbacks for the firm.


A variety of sales channels have now become a crucial part of infrastructure for Pop Mart's toy ecosystem, offering both products and fun to diversified consumer groups.

Pop Mart has brick-and-mortar stores in 53 first-tier and second-tier cities across the country, mostly located in mainstream commercial areas. These stores,which remain the firm's main sales channel, aim to offer the fullest stocks and also play a key role in promoting brand images and maintain relations with consumers.

In 2017, the firm introduced a large number of automatic vendor machines,rebranded as “robot stores,” in shopping malls, cinemas and metro stations where foot traffic is especially heavy. With each machine stocking products worth some 50,000 yuan, most of them needed to be restocked in just every one or two days. In the most extreme case, one had to be restocked every one hour. These machines provide precious data for Pop Mart to find the most effective locations for its stores.

Meanwhile, its online store at Tmall topped the 2018 sales chart for the toy and model category, constantly drawing new customers. In 2019, the store's sales during the Nov. 11 Singles Day surpassed Lego and Bandai.

Pop Mart went even further by moving the thrill of opening a blind box online by releasing a mini-app of drawing blind boxes in WeChat, China's popular messaging platform.


Five years after the initial success of Molly the doll, Pop Mart has developed an elaborate and comprehensive business that encompasses IP management, supply chains and sales,creating an ecosystem of fashionable toys envisioned by its founder.

According to Wang, the firm needs to explore more good artists and quality designs while upgrading and improving its IP operations to prolong its products’ life cycles. Meanwhile, he also stresses expanding sales channels and overseas market so as to effectively reach more consumers and form deeper ties with them. Diversifying products and services to provide fans with unique experiences is another goal.

According to Wang, Pop Mart has just started, and he is prepared to take on the challenges of recruiting talents and integrating the firm's industrial chains in order to fulfill these goals.