Original by BCC Global
October 15, 2024 | 9:30 AM
Introduction
Pop Mart’s first-quarter 2024 financial report indicates that the company’s overseas operations have become its second major growth driver. It is expected that by the end of 2024, over 30% of the company’s total revenue will come from international markets. As the company continues to expand globally, it is focusing on the Southeast Asian market, which is expected to provide significant growth opportunities. What are the key factors contributing to Pop Mart’s success in the region and why is it focusing on the Southeast Asian market?
Pop Mart’s Overseas Expansion
Pop Mart began exploring overseas markets in 2018 and accelerated the expansion of its retail network in 2022. This initiative has significantly boosted the company’s revenue. In 2023, Pop Mart’s international revenue reached RMB 1.066 billion, accounting for 16.9% of its total revenue. By the first half of 2024, global revenue soared to RMB 1.351 billion, a 260% year-on-year increase, bringing the overseas share of total revenue to 29.7%.
Pop Mart’s Stellar Performance in Southeast Asia
In the first half of 2024, Pop Mart’s revenue from the Southeast Asian market amounted to RMB 556 million, representing 41.1% of its total international revenue. Pop Mart now has stores in Singapore, Thailand, Vietnam, and Indonesia, with plans to open 20 more Southeast Asian locations by the end of 2024.
Pop Mart has excellent sales performance in Thailand, especially in Bangkok, where the company opened six stores within a year. The Labubu-themed store in MEGA BANGNA, Thailand’s largest shopping mall, achieved over RMB 10 million in sales on its first day of operation, setting a record for single-day overseas store sales.
Why Southeast Asia?
- Economic and Geographic Factors: Southeast Asia has a large and growing economy, with increasing income levels and a high urbanization rate. Its geographic proximity to China makes logistics and management easier.
- Consumer Demographics: The profile of Southeast Asian consumers, particularly those interested in collectible toys, closely mirrors that of China. Women make up about 65% of the market, with the majority aged between 20 and 35, aligning with Pop Mart’s target demographic in China.
- Cultural Affinity: Southeast Asia shares cultural similarities with China, making it easier for Pop Mart to adapt and promote its products in the region.
Success Factors in Southeast Asia
- Localized Product Strategy: Pop Mart has adopted a localization strategy for the Thai market, launching products tailored to local tastes. Collaborations with Thai artists have resulted in limited-edition items with regional appeal, such as the Crybaby figure co-created with Thai artist Molly.
- Localized Marketing: By leveraging platforms like Instagram and Facebook, Pop Mart has partnered with local influencers to boost brand recognition and favorability. For example, in April 2024, BLACKPINK’s Lisa showcased Labubu products on Instagram, triggering a buying frenzy.
- Omni channel Strategy: Pop Mart’s expansion in Southeast Asia began with Singapore as a starting point, gradually extending to neighboring countries. The company employs a comprehensive DTC (Direct-to-Consumer) strategy, opening physical stores, and vending machines, and expanding its online presence through platforms like Shopee.
- Limited Releases and Scarcity Marketing: Pop Mart uses scarcity marketing in Thailand by offering limited-edition products and flash sales, which create urgency and drive consumer demand.
- Overseas Supply Chain: In order to meet global demand, Pop Mart has established its first overseas factory in Vietnam. In Thailand, the company optimizes its supply chain by placing advance orders and scheduling regular restocks to address the high sell-out rates of popular items. Central warehouses replenish stores two to three times per week, and new products are released every Friday. Consumers can book store visits online.
Outlook for Pop Mart’s Overseas Growth
Pop Mart’s official account, “Pop Fan,” has revealed that by the fourth quarter of 2024, the company expects over 40% of its revenue to come from international markets. During the Christmas shopping season, international revenue could even surpass 50% in a single month. Looking ahead, Pop Mart plans to further expand its store network, not only in Southeast Asia but also in key regions like North America and Europe, to strengthen its global brand presence.
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