bally, Pop Mart now has more than 350 physical stores in 23 countries along with 2000 Roboshops, its own brand of cashless vending machines where consumers splurge on so-called blind boxes, a form of collectables, something akin to the baseball trading cards of eras past.  Consumers buy a box containing a character from a collection of their choice without knowing the piece inside. Some characters are less common than others and the brand has built a burgeoning online trading culture making some of the pieces a lucrative investment for the savvy collector: Some rarer items have been selling for up to 40 times their original price.  The figurines inside include “pool babies” from the elf-like Pucky range, Skullpanda, Dimoo, Hirono or variations of its most popular character, the Molly doll with its large bug eyes and round face. They sell for about $12, but prices in markets outside Mainland China run from 15 to 50 per cent higher than in Mainland China, depending on local taxes and logistics costs.  Those boxes account for about 60 per cent of the company’s sales worldwide, with the balance being more expensive ‘visible’ toys and a high-end range called Mega, with figurines that run up to 90cm tall and sell for up to $1000. The first of those was the Space Molly x SpongeBob crossover which went viral immediately after launch with one of that set, limited to 3000 units, drawing more than 1 million bidders in an online auction.  In 2020, Pop Mart sold more than 50 million toys. Its revenue rose 49.3 per cent year on year to $382 million. In 2021, the company’s revenue grew 79 per cent to $704.6 million and net profit attributable to shareholders grew by 70 per cent to $157.2 million.   Coming to America Pop Mart dipped its toe in the water in the US market in June last year, opening a temporary 2148sqft pop-up store inside the luxurious Californian shopping mall South Coast Plaza. The aim was to help build the brand’s profile in the US, which Pop Mart sees as a key market in a category Frost & Sullivan estimates will be worth $41.8 billion by next year.  Pop Mart only created an international division in 2018 and spent much of two years building a strategy before the first permanent offshore store began trading.   “When we first started the international business, I had some doubts,” Justin Moon, VP of Pop Mart and president of Pop Mart International, told Inside Retail via a video interview last year.  “We initially assumed it might not be easy to enter the UK market. But we tested the market with a local wholesaler and via e-commerce and we realized it had a lot of potential.”  As with its US debut, Pop Mart entered the UK with a pop-up store at a high-profile mall – London Westfield. It expected the Asian diaspora would be its largest potential market demographic and for the first few days, that was the case, with 90 per cent of sales to Asians. But within a few weeks, that figure had turned right around – the non-Asian population was accounting for 80 per cent of sales.  After the pop-up store, Pop Mart participated in art and design conventions MCM London and DesignerCon UK before opening its first physical store on the hip Shaftesbury Avenue in central London.  The importance of localization In North America, Moon said Pop Mart’s research has shown that consumers prefer to know which figure they will receive when they make a purchase – and most buy whole sets to avoid missing out on a piece, or on limited-edition figures.  “In contrast, our customers in Southeast Asia prefer the ‘chance’ aspect of buying blind boxes. Like Chinese consumers, many of them even look forward to trying their luck as an exciting part of the experience,” said Moon. That key difference means Pop Mart is likely to differentiate its North American strategy, as it does in other markets.  Localization is important in overseas markets – its mantra is to go global but think local.  Merchandise is curated for each region as Pop Mart adapts its offer to suit local consumer preferences. This includes licensed products where regional rights often apply.  “Since Pop Mart products combine cultural and artistic elements, we can’t target all overseas regions using the same approach. Culture, values, and perceptions of art vary in every corner of the world,” said Moon. “In this context, it is necessary to build a strategic plan to expand our reach.” And the brand considers it vital to tap into local trends and partner labels when it comes to building its range. “Many companies overlook localization when they do business overseas. We think the localization of a brand should include localization of management methods, manpower, and products.”  From a discount variety store to a $3.9 billion business Pop Mart was founded by Ning Wang, 36, a Chinese entrepreneur who is now a billionaire given the Hong Kong-listed company’s $3.9 billion company’s market value. He started out selling small gifts, notebooks, candies and personal items like handheld mirrors, a retail concept similar to another Chinese retailer Miniso.  Around 2012, Wang had already recognized the popularity of toys in his stores. Noting the vending machines popularized in Japan by toymaker Bandai, that sold Gashapon toys in capsules, he decided to take the concept a leap further. Working with artists, he created first characters, then different figurines of each, and for more than a decade has since been building a range of more than 100 trademarked characters. The knick-knacks and stationery have long since gone from the shelves of its Chinese stores. Pop Mart’s range now stretches to thousands of items with three or four new collections launched each month. Typically, these collections are planned a year in advance of the launch and take 10 months to develop. A design center draws talent from all over China and abroad.  The gender balance of Pop Mart customers is split 70/30 towards women, and the majority of purchasers are aged 16 to 35. Pop Mart has a huge following among the big-spending Gen Z and Millennial groups. A typical buyer is like 28-year-old Beijing lawyer Wu Ge, who has spent 5000 yuan (US$766) over three years before the company’s IPO, collecting 80 figurines. Displayed on clear plastic shelves in her bedroom, they range from cherubic dolls to characters from Japan’s Pokemon series.  About 70 per cent of Pop Mart’s figurines are based on its own characters, with 20 per cent in partnership with other brands. The balance is sourced from local artists in each market the company enters.  Partner – or licensed – brands include toy companies such as Disney and Nickelodeon through to fashion labels including Moncler and Rayban. The company has previously partnered with brands as diverse as US pop culture artist, Keith Haring, KFC China, Kiehl’s and the Argentinian football team.  “We plan to expand these collaborations globally. I hope that as our brand awareness is increasing, we have many chances to work with more. We are very open to new partnerships,” said Moon.   Is there a chance the concept may lose momentum or fall from favor? Based on the broad range of products, its own characters and its potential for partnerships with other brands, Moon thinks not.  “Many companies often measure the success of their overseas businesses by the growth in sales or sales figures. However, we think there are more important factors in doing business overseas than simply increasing the sales volume. For example, finding new growth opportunities in overseas markets, promoting the development of the local industries related to art and pop toys, and contributing to local communities by boosting local employment are also important missions for our brand,” he explained.  “Pop Mart’s dream is to become a leading global pop culture and entertainment company. To realize this long-term vision, we seek to make meaningful developments globally and bring all our customers around the world joy.” Doug Young, an analyst at Silver Spring, Maryland-based Bamboo Works, suggests that mantra is paying off. “Pop Mart is quite remarkable for its ability to turn ordinary toys into gold, while using a very cost-efficient distribution network that combines high-margin online and vending machine sales with costlier traditional brick-and-mortar stores,” he observed.  “It also uses a heavy social media element to get online communities buzzing about its latest gimmicky toys, facilitating trading in such items and also generating buzz about upcoming products.” Will the buzz prove contagious among American consumers? The Chinese company’s experiences in other markets around the world suggest it will. Time will tell.