Investment Rating - The report does not explicitly state an investment rating for the building block toy industry Core Insights - The building block toy industry is experiencing high growth driven by innovative gameplay and IP integration, with local brands gaining market share against international leaders like LEGO [4][11][15] Summary by Sections Industry Overview - Building block toys are creative entertainment tools composed of multiple small parts, promoting various developmental skills and appealing to both children and adults [5][6] - The market is characterized by IP integration, innovative gameplay, a broad audience, and a gradual rise of local brands [11] Market Dynamics - The market size is expanding due to a solid foundation, the explosion of miscellaneous retail formats increasing exposure and accessibility, and a resonance between supply and demand [4][39] - Future changes are expected from the rise of niche categories and local brands, particularly character-based toys leading growth [40] Competitive Landscape - In 2023, the global market concentration (CR3) reached 84%, with LEGO holding a dominant 75% share, although its market share in China decreased by 8.5 percentage points [15][44] - Local brands like Blokus are capturing market share through competitive pricing and rapid market response, with Blokus achieving a 30.3% market share in the character toy segment [22][31] Consumer Trends - The consumer base is diversifying, with demand expanding from children to teenagers and adults, who seek personalized, high-quality, and creative products [14][34] - IP has become a core factor influencing consumer purchasing decisions, with 59% of LEGO's products being IP-based, leading to a 19% premium on these products [23][34] Supply Chain Analysis - The supply chain consists of raw material suppliers, IP licensors, manufacturers, and consumers, with a focus on cost reduction through standardized parts and efficient production paths [21][39] - The price of key raw materials like ABS plastic has decreased significantly, aiding manufacturers in lowering production costs [26] Future Outlook - The rise of character-based toys is expected to be a key growth driver, with local brands leveraging IP collaborations to enhance product appeal [40] - The market is anticipated to see increased competition as local brands continue to innovate and expand their reach into lower-tier markets [46]