Gifts / Sports & Toys

Generation Z young consumer groups have become one of the main players in my country's consumer market, and the trendy blind box is accelerating its development under the leadership of Bubble Mart and other companies. As a traditional toy manufacturer, Gao Le shares (002348) is increasing its investment in the blind box of fashion play to promote the transformation and upgrading of its product line.

Gaole shares a few days ago disclosed the 2021 semi-annual report, showing that in the case of short-term obstacles to the export business, the domestic sales of the toy business of Gaole shares in the first half of 2021 were 118 million yuan, an increase of 56.52% year-on-year. It fully shows the good growth trend of the domestic market.

It is worth noting that Gaole shares accelerated its transformation to a blind box layout of trendy play. At present, the company has set up a dedicated fashion business department to be responsible for the development, market promotion and operation of blind boxes and other products. The company will further develop the fashion toys market and continuously increase its proportion in the domestic toy market.

The impact of the epidemic will gradually diminish

my country is the world's largest toy manufacturer and exporter, and is known as the "world toy factory". Over 70% of the products sold on the world toy market are made in China. The Tianyan Check shows that my country’s toy-related enterprises have increased by more than 1.2 million for two consecutive years.

However, due to the impact of the epidemic at home and abroad, the toy industry has reduced demand and reduced export orders, resulting in a decline in the sales revenue of some toy companies. In the first half of this year, Gaole's operating income was about 184 million yuan, a year-on-year decrease of 8.72%; affected by the increase in raw material prices and overseas epidemics, the net profit loss in the first half of the year was about 35.55 million yuan.

Since the outbreak of the new coronavirus in the country at the beginning of 2020, Gaole has established an emergency response team for the epidemic, fully implemented various measures for epidemic prevention and control, and steadily promoted the resumption of work and production. Although the new crown epidemic has been effectively controlled at home, the overseas epidemic is still severe. If the new crown epidemic continues to spread globally, it will have varying degrees of adverse effects on the production and operation of various industries around the world.

In the first half of 2021, the operating income of Gaole's toys and related businesses was 163 million yuan, an increase of 12.94% year-on-year, accounting for 88.70% of the company's total operating income; in the first half of 2021, due to the shortage of some electronic parts and the tightness of shipping, The income of the toy export business is 45.25 million yuan.

In the case of short-term obstacles to export business, Gaole actively explores the domestic market and seizes the trendy play track. In the first half of 2021, the domestic sales of the company’s toy business was 118 million yuan, an increase of 56.52% year-on-year; in the first half of 2021, the toy business The domestic sales revenue of the business accounted for 72.22% of the total revenue of the toy business; it fully demonstrated the good growth trend of the domestic market.

Gaole shares said that it is expected that the domestic toy sales business will maintain a relatively high growth rate throughout the year. In the future, the company will continue to grasp the hotspots of market consumption, launch high value-added toy products suitable for the market, and further enhance the profitability of the toy business.

At present, in addition to toy manufacturing, Gaole shares also part of the Internet education business. In this regard, Gaole shares said on the interactive platform that the new "Double Reduction Opinions" of the Ministry of Education has little impact on the current company's business. The company will take the initiative to assume social responsibility, fully cooperate with the school to carry out after-school services, and actively explore and carry out after-school related The service is mainly based on basic trusteeship services, combined with quality development services, to meet the diverse needs of students and promote their healthy growth.

Accelerate the layout of the blind box category

Chaowan Blind Box is naturally one of the directions for the transformation of toy companies. China's trendy toy retail market is still at an early stage, and there is a lot of room for growth in the future.

According to the Frost & Sullivan report, the market size of China's trendy toy retail increased from 6.3 billion yuan in 2015 to 20.7 billion yuan in 2019, with a compound annual growth rate of 34.6%. Driven by the rising popularity of trendy toys in China, the market size of trendy toys retail is expected to reach 76.3 billion yuan in 2024, with a compound annual growth rate of 29.8% since 2019.

At present, more than 95% of the consumer group in the trendy play industry in my country is 15 to 45 years old, and the age is generally low. More than half of Chaowan consumers will join the Chaowan community. E-commerce platforms, offline stores and vending machines are the three major purchase channels for customers. Approximately 70% of trendy consumers will buy blind boxes for a specific toy design more than three times.

One of the earliest domestic toy companies to go public, Gao Le shares, facing the impact of overseas epidemics and rising raw material prices, is seeking new growth areas. Gaole has been designing, producing and selling blind boxes since 2018, and once launched the Hua Mulan film blind box series to the market when the movie "Mulan" was released. At the same time, the company will closely follow the trend of the trendy play market and combine with the retail market situation to strengthen the development of puzzles, educational interactive, smart, competitive and trendy blind boxes, and enrich the products of animation IP image authorization.

But at the same time, the trendy play market is an extremely fragmented market. According to the statistics in 2019, even Bubble Mart, which is temporarily in the leading position, only occupies 8.5% of the market share, which is only second place. Leading 0.8%. More importantly, the total market share of the top 5 is only 22.8%. Such a low industry concentration means that various brands in this field are still in the period of market expansion and are far from reaching the zero-sum game stage. The knockout matches have just begun.

Although Frost & Sullivan did not disclose in the survey data which four companies are the second to fourth in the fashion industry, in fact, there are not many competitive players in this field. For example, they are committed to becoming a "China Creative Life" The No. 1 brand of groceries, "Kule Chaowan", 52toys, Aiman, which mainly produces animation and game derivatives, IP station, an IP promotion channel company, Meizai, a social platform that focuses more on e-commerce, and MINISO launched after its listing TOP TOY, the first trendy play brand, is a strong opponent in the industry.