After the closing on August 22nd, Beijing-based art toy company Pop Mart (HK:9992) unveiled its performance for the first half of 2023. During this reporting period, driven by exceptional sales of multiple new products and continued overseas expansion, the revenue increased by 19.3% to 2.81 billion yuan, and the net profit surged by 43.2% to 477 million yuan, surpassing the full-year net profit of the previous year (476 million yuan). Among them, the year-on-year growth rate of the Hong Kong, Macau, Taiwan, and overseas business reached 139.8%, with a revenue share of 13.4% (first half of 2022: 6.6%).
At the same time, as the pace of internationalization accelerated, changes occurred within the physical internal organizational structure. Currently, the group is divided into two reporting segments: Mainland China and Hong Kong, Macau, Taiwan, and Overseas. The group also disclosed the profit data for the Hong Kong, Macau, Taiwan, and overseas businesses for the first time:
- Gross Profit: Reached 236 million yuan in the first half, with a gross profit margin of 62.9%, compared to 89 million yuan and a gross profit margin of 57% in the same period last year.
- Operating Profit: Reached 79 million yuan in the first half, with an operating profit margin of 21%, compared to 28 million yuan and an operating profit margin of 17.8% in the same period last year.
This article, Luxeplace.com, will interpret the growth dynamics of Pop Mart’s Hong Kong, Macau, Taiwan, and overseas business from the perspectives of the market, channels, and marketing:
- Market: Settling in landmark shopping centers, opening the first offline stores in France and Malaysia.
- Channels: A staggering 392% increase in offline channels, continuous advancement of the DTC strategy.
- Promotion: Participation in exhibitions and hosting artist signing events to promote art toy culture.
Market: Settling in landmark shopping centers, opening the first offline stores in France and Malaysia.
Pop Mart officially embarked on globalization expansion in 2018. In the first half of 2022, the company’s Hong Kong, Macau, Taiwan, and overseas business had transformed from a B2B-focused model to a DTC (direct-to-consumer) dominant model. The brand has entered overseas countries including Japan, South Korea, Singapore, the United States, Australia, New Zealand, and the United Kingdom.
In February 2023, Pop Mart’s first store in France opened at the Paris Westfield Forum des Halles shopping center. This marked Pop Mart’s first directly operated store on the European continent. The French flagship store is located on the first floor of the Westfield Forum des Halles shopping center, near Rue Rambuteau street. The store mainly sells series of art toys including MOLLY, SKULLPANDA, DIMOO, THE MONSTERS, and HIRONO.
In May 2023, Pop Mart’s first store in Malaysia opened at Pavilion Kuala Lumpur, following Singapore as its second market expansion in Southeast Asia. The store is located at Pavilion Kuala Lumpur, a major commercial and entertainment hub in the area. The mall is situated in the heart of Kuala Lumpur’s Bukit Bintang district on Starlight Avenue, a prime location in the city’s Golden Triangle.
A staggering 392% increase in offline channels, continuous advancement of the DTC strategy
In terms of channels, the Hong Kong, Macau, Taiwan, and overseas business includes offline channels, online channels, wholesale, and other channels. Among them, offline revenue increased from 39 million yuan in the first half of 2022 to 190 million yuan in the first half of this year, a growth of 392.4%. The proportion also increased significantly from 24.7% in the same period last year to 50.7%.
The strong performance of offline channels is mainly due to the increase in the number of retail stores and robot stores: as of June 30, 2023, there are 38 retail stores, an increase of 27 since June 30, 2022; there are 106 robot stores, an increase of 81 since June 30, 2022.
In addition, the Hong Kong, Macau, Taiwan, and overseas business’s online channel revenue grew by 63.1% to 57 million yuan, with Pop Mart’s official website revenue decreasing from 16 million yuan in the first half of 2022 to 12 million yuan in the first half of this year. The group stated that this was mainly due to the continuous exploration of new online platforms, expansion into more countries and regions, and a reduction in advertising for existing online platforms.
Participation in exhibitions and hosting artist signing events to promote art toy culture
In January 2023, Pop Mart held designer signing events in China’s Taiwan and Tokyo for Japanese artists Hiroto Ohkubo and Yosuke Ueno, respectively. The events showcased the collaboration between the artists and Pop Mart, as well as the stories behind the creation of their IPs, attracting more overseas artists and IP licensors for collaborations.
In May and June 2023, Pop Mart participated in the UK MCM Comic Con, Melbourne OZ Comic Con, Jakarta Comic Con, and Malaysia IOI City Mall exhibition. The display of IP art toys like SKULLPANDA, MOLLY, DIMOO, THE MONSTERS, and Xiao Yan attracted a large number of local art toy enthusiasts.
The Hong Kong, Macau, Taiwan, and overseas markets have become important growth engines for Pop Mart. During the performance release conference in March of this year, Wen Deyi, the President of Pop Mart’s overseas business, stated that by the end of 2023, the number of overseas stores is expected to reach 80-90, and the number of robot stores is expected to reach 200. 70% of these stores will be located in East Asia and Southeast Asia, and 30% in Europe, America, and Australia.
At last year’s performance release conference, Pop Mart’s founder and CEO, Wang Ning, expressed the hope that overseas revenue would reach 50% of the overall revenue in the future.
| Source: Pop Mart financial report
| Image Credit: Pop Mart official website, Hiroto Ohkubo official Weibo
| Editor: LeZhi
