Summary of the Conference Call for Pop Mart Company Overview - **Company**: Pop Mart - **Industry**: Toy and Collectibles Key Points and Arguments 1. **Product Release and Stock Strategy**: In early 2025, the release of first and second-generation products led to a stock price drop, but the company's IP popularity remained unaffected, with prices recovering afterward. During the 618 shopping festival, the high premium on Labubu's third-generation products prompted the company to restock to combat scalping and stabilize prices through multiple pre-sales, benefiting long-term brand development [2][4] 2. **IP Popularity and Market Trends**: Pop Mart's IP exhibits cyclicality, but the sugar gel plush category has amplified its appeal, significantly increasing popularity. Labubu's success in Southeast Asia has mirrored in the Chinese market, with a surge in North American interest noted from April 2025, indicating substantial future growth potential [2][5] 3. **Global Market Performance**: Labubu has shown strong global attributes, performing well not only in North America but also in the Middle East and South America, with notable influence in the Russian online market. The demand for Labubu in Southeast Asia has been robust since late April 2024 [2][6] 4. **Diversification of IP**: To mitigate risks associated with reliance on a single IP, Pop Mart has diversified its offerings by introducing more IPs like Gudetama, Pacha Dog, and Kuromi. In 2024, Gudetama accounted for approximately 20% of revenue, expected to remain below 40% in 2025 [2][7] 5. **Emerging IPs**: The company is actively promoting new IPs such as Crybaby, Xiao Ye, and Newcomer, with Crybaby gaining acceptance overseas and Newcomer appealing to a broad audience, including women, men, and children [3][9] 6. **BJD Product Line Expansion**: Pop Mart is exploring new categories like BJD (Ball Jointed Doll) figures, with the recent launch of Spenda generating significant social media buzz, indicating successful product innovation [10] 7. **Third-Party IP Licensing**: The company has excelled in third-party IP licensing, with products like the Nezha blind box increasing foot traffic and diversifying customer demographics. Collaborations with brands like Luckin Coffee have also been successful [11] 8. **North American Market Expansion**: As of May 2025, Pop Mart operates nearly 40 stores in North America, with a strong monthly opening rate and plans to expand further into Malaysia, Indonesia, Vietnam, Japan, South Korea, and the UK [12] 9. **Southeast Asia and Europe Marketing Strategies**: In Southeast Asia, new marketing strategies have been implemented to enhance user engagement, while localized marketing activities in Europe aim to attract customers through unique experiences [13] 10. **2025 Performance Outlook**: The company anticipates a total revenue of approximately 9 billion RMB for 2025, with a strong performance expected in the first half and potential upward revisions to forecasts [14] Additional Important Insights - The cyclical nature of IPs is acknowledged, with historical data showing stable revenue prior to the introduction of new popular products [5] - The company’s proactive approach to restocking and managing market expectations is seen as beneficial for brand health [4] - The diversification strategy is crucial in avoiding over-reliance on any single IP, as demonstrated by past industry examples [7]

Summary of Key Points from Conference Call Records Industry Overview - The Japanese content IP industry utilizes a production committee model to distribute investment risks, ensuring exclusive rights during core window periods and maintaining long-term operations for popular IPs, contrasting with the single-company risk model prevalent in domestic markets [1][5][3]. Company Insights: Sanrio - Sanrio has experienced multiple business fluctuations but has achieved growth through international strategies and overseas licensing, particularly in North America. However, it faced challenges due to increased competition and operational issues until the new president's reforms [1][7]. - Under the new president, Sanrio implemented a multi-IP strategy, introduced a younger management team, established performance-oriented incentives, and adopted digital operations, resulting in an annual revenue growth rate of 30% to 40% [1][9][8]. - Sanrio employs a decision-making committee to select key characters for operation and promotes secondary characters through a "senior mentoring junior" approach, enhancing IP diversification [1][10]. Market Characteristics - The Japanese IP consumer market is characterized by its universality and wide penetration, with products sold across various retail formats, appealing to all age groups [2]. Key Success Factors - The unique production committee model in Japan is a critical success factor, allowing risk distribution among multiple stakeholders and creating a closed-loop ecosystem [3][4]. - Sanrio's historical growth trajectory includes significant international expansion, particularly in the 2010-2015 period, driven by cultural influences and strategic partnerships [6][7]. Competitive Landscape - Sanrio's overseas revenue became a major profit source by 2014, but from 2015 to 2021, it faced operational difficulties and increased competition in North America, leading to a decline in market position [8]. - The new president's leadership marked a turning point, with a focus on multi-IP strategies and operational reforms leading to a resurgence in performance [9][8]. Comparison with Pop Mart - Both Sanrio and Pop Mart emphasize diversification strategies, with Sanrio focusing on IP diversification and Pop Mart expanding product categories [11]. - Pop Mart's future growth potential is significant, with estimates suggesting a market value of 400 billion to 600 billion RMB, driven by its strong operational capabilities and social attributes [24][25]. Membership and Consumer Engagement - Sanrio has a robust membership operation, with approximately 2.5 million registered fans in Japan, while Pop Mart boasts over 50 million fans, indicating a deeper engagement strategy [21][22]. North American Market Performance - Sanrio has seen a recovery in North America, with operating profits turning positive in 2022 and revenue growth approaching 80-90% annually, attributed to increased IP consumption demand and strategic adjustments [23]. Future Outlook for Pop Mart - Pop Mart's market potential is vast, with projections indicating it could achieve annual revenues of 100 billion USD and profits of around 20 billion RMB, contingent on effective IP management and social engagement strategies [26][24]. Conclusion - The Japanese IP industry showcases a successful model of risk distribution and long-term engagement, with companies like Sanrio and Pop Mart exemplifying diverse strategies for growth and consumer loyalty. The ongoing evolution in management and operational strategies will be crucial for sustaining competitive advantages in both domestic and international markets [1][3][11].