Gifts / Sports & Toys

After the popularity of trendy toys such as blind boxes and handmade toys, the trend of building blocks from imitation to originality has also ushered in a strong growth potential, gradually moving from niche to the general public. At the same time, brands such as Coincident Building Blocks, Senbao Building Blocks, Pinqi, and Bruco have also received attention from the capital market. But in the face of changing consumer groups, can domestic building blocks support the next trend?

Domestic Building Blocks Dig into the Billion Dollar Market

In the world of building block players, it is widely circulated in the industry that building blocks are divided into two categories: LEGO and others.

According to Euromonitor data, LEGO's market share in the Chinese market was 42.3% in 2020. However, several domestic brands, including Bangbao Yizhi, Star Diamond, Senbao, and Bruco, have not reached a market share of 5%, as reported by Huacheng Import and Export Data Observation.

Although Lego has achieved dominance in market share. However, this does not affect the domestic building blocks to follow the new trend of "China-Chic consumption" and explore new growth space. Especially under the influence of the epidemic, the development of the industry has been boosted by the combination of homesteads and building blocks. On e-commerce platforms, the building block category has accumulated a market of tens of billions of dollars, according to the observation report of Huacheng's import and export data.

According to the "Tmall Trend Toy Industry White Paper", the adult trend in the toy market is obvious, and building blocks have become the category with the highest repurchase attributes in the toy industry. During the 618 pre-sale period in 2021, the cumulative amount increased by over 100% year-on-year. Among them, more than 50% of the building blocks produced by the Guangdong Chenghai toy supply chain, including brands such as Enlightenment, Senbao Building Blocks, Keepley, Loz, and Goody, were born and grown here, entering the sight of consumers.

In Chenghai, the "toy capital of China" in Guangdong, almost every household is making toys. In order to break the recognition of "low-cost building blocks", in 2019, based on the enlightenment of the building block brand founded by their father, the two Jankada brothers re founded the Chaoplay building block brand Keepley, which not only co branded with well-known IP brands such as Doraemon and Smart Baokemeng, but also restored the phenomenal China-Chic products such as China Aerospace Series and Guoman IP Series, and was loved by consumers.

According to Huacheng Import and Export Data Observation, Lin Zezhe, the founder of Senbao Building Blocks, is not only the third generation player of Chenghai Building Blocks, but also has 20 years of experience making toys. In 2013, we entered the building block market and successfully captured the trendy mentality of this generation of young consumers through Wandering Earth IP, achieving brand breakthroughs and continuously developing original products, opening our own development path. In terms of products, Senbao building blocks have formed three product lines: building block co branded film and television IP, China-Chic IP, and original products. It is understood that in terms of revenue, the sales of the Senbao building block co branded series account for 40%, and the sales of the original product line account for 60%.

We see that under the catalysis of new consumption, domestic building blocks are constantly breaking through themselves and exploring new opportunities. On the one hand, in terms of cross-border IP cooperation, Keepley and the Forbidden City jointly launched the China-Chic series, and Senbao building blocks cooperated with China-Chic IP Wandering Earth, Shandong Ship and Sanxingdui series. While developing their own IP, they are also strengthening the construction of national style IP, which is closer to Chinese traditional culture.

On the other hand, to avoid IP homogenization, many manufacturers have developed new splicing methods called "mortise and tenon", hoping to reflect traditional Chinese craftsmanship and attract players' attention through assembly methods originating from Chinese architecture. In addition, in terms of cost-effectiveness, compared to LEGO, which often costs hundreds to thousands of yuan, domestic building blocks have an advantage in price, as reported by Huacheng Import and Export Data Observation.

The building block track has attracted capital attention

After the popularity of blind box and handheld games, building blocks have attracted the attention of capital as another emerging track. According to Leibao statistics, domestic building block brands such as Senbao Building Block, Qiaoqi Building Block, Bruco, and Pinqi have received investments, with 7 investment events, including 3 at the billion yuan level.

Last February, Senbao Jimu completed a round A financing of several hundred million yuan, with investors including Alibaba, Toutou Shidao Fund, and Honghui Capital. While delving deeper into products, Senbao Building Blocks is also exploring new sales channels. According to Huacheng Import and Export Data Observation, the sales generated through live streaming sales in 2020 accounted for about 20% of the entire e-commerce section sales of Senbao Building Blocks.

In mid January 2022, based on the research and innovation of traditional mortise and tenon technology, the founder of Chinese building blocks coincidentally obtained tens of millions of yuan in angel round financing from Meihua Venture Capital and Xiaohongshu. In terms of user positioning, coincidentally, it spans two age groups: children aged 3-16 and adults aged 16 and above. In terms of entertainment, fun, aesthetics, education, and other needs, it meets the needs of consumers. Although Coincidentally tenon and mortise building blocks were established in 2020, we still want to open up a unique path for "Chinese style" building block toys through new entry points.

In addition, Bruco has received three rounds of investment, including an angel round investment from Xibosi in 2018, a round A investment of RMB 330 million from Gaorong Capital, Source Capital, and Junlian Capital in 2020, and a round B investment of RMB 600 million from Yunfeng Fund, Junlian Capital, Gaorong Capital, and Source Capital in 2021. It is reported that Bruco will use the financing to upgrade and improve the "research, production, marketing" link of the "building block+" industrial chain, so as to further consolidate the brand Moat and enhance the competitive advantage of the industry.

With the help of capital, toy enterprises have increased their horsepower to seize the market, or jointly named China-Chic IP/R&D original IP, or found a new splicing method "tenon and mortise", and began to confront Lego head-on.

Can domestic building blocks support the next air vent? What are the differences compared to trendy games? Industry insiders say that compared to trendy gaming products, building block products have greater difficulty, longer design cycles, and more obvious challenges. In terms of product design, it is not only necessary to consider the storytelling, compatibility, and authenticity of consumer building block scenarios, but also to test process molds, design, materials, supply chain, etc. In the future, there is still a long way to go.