How IP collaborations are redefining the toy market in Southeast Asia

From Pop Mart, a leader in the blind box space, MINISO, Bandai Namco and global players such as Hasbro and Mattel, toy brands are now putting IP collaborations at play.

From an industry report by HKTDC research, trending toys (or IP collaborations in toys) is an “aggressive approach (that emerged during the) post-pandemic”. It meets the trendy appeal that manufacturers are now tapping into and represents a huge growth engine for retailers around the world.

Pop Mart and its blind box concept

While the blind box idea is not entirely new, it is a toy concept that is reignited by Pop Mart and brings a wave of interest across teens to adults in China and Southeast Asia.

This concept is successful owing to the “surprise factor” that consumers get when opening the box. A typical blind box has 4 to 12 selections of figures, where consumers can open the box to see which one they get. To add to the collectability value, a hidden style is often placed in the mix with a lower percentage of getting the figure.

Despite the Pop Mart brand being founded early on in 2010, it was not until 2016 as the lifestyle toy brand gained mainstream attention with the success of its blind box toy series, Molly. As of now, Pop Mart has over 100 IP collaborations, including popular brands such as Disney, Marvel Sesame Street and more.

The enormous success of Pop Mart, intentionally or not, drives a wave of IP collaborations that many other brands emulate as they see a massive market opportunity.

MINISO features IP-themed retail stores

MINISO is an uprising lifestyle brand known for affordably priced products, but recently stepped up for the IP game as well.

Their appeal comes from embracing a “IP theme park-style” retail space, with globally loved IPs like Disney, Sanrio, Harry Potter and even Chiikawa (an uprising Japanese toy figure that has a vastly global appeal) featured in many of its stores. Interestingly, this approach became a major success and marks the beginning of MINISO’s fresh brand direction.

At its 10th anniversary, MINISO announced its repositioning into a “global IP co-branded concept store”, a significant step up to the immersive IP experience that it meant to bring.

Earlier in National day this year, MINISO opened MINISO land, its first flagship global store, on Shanghai’s bustling Nanjing Road. It immediately becomes a popular landmark, drawing crowds of visitors and tens of millions of yuan to its already blooming brand.

However, risks also arise with such an aggressive approach, as license costs skyrocketed by over 20%, which may negatively impact profit margins.

A growing but competitive space

As competition in the toy market intensifies, traditional global IP toy providers, such as Bandai Namco, Hasbro and Mattel may suffer in sales.

Overall, the emotional connection and cultural relevance of IP toys are the key for consumer purchase. To facilitate long-term growth, brands should think about ways to continually deliver renewed, immersive experiences for their existing and new IPs.

Mattel, a brand that faces challenges, has also found success in regaining control of the Disney Princess IP series upon the debut of the live-action Barbie movie, with a record $70.5 million in sales in North America.

As one project about IPs of the future, companies that are able to find the balance by leveraging the power of established and emerging IPs while fostering creativity and innovation in product development will be the “eventual winners” of this industry.