018, I had some doubts,” vice president of Pop Mart and president of Pop Mart International, Justin Moon, told Inside Retail during a video call from his offices in Beijing. “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 realised it had a lot of potential.”  After the pop-up store, Pop Mart participated in art and design conventions MCM London and DesignerCon UK. The first physical UK store opened last January at Shaftesbury Avenue in central London.  That UK story has led to more and more successful expansion – East and West – that has helped turn a retailer of various personal items into a global toy empire. The merchandise and the market Pop Mart, which describes itself as an “art toy store”, might seem an unusual concept to a Western consumer. Around 60 per cent of its product offer comprises blind boxes, sold in collections. In much the same way as buying a Kinder Surprise is all about the excitement of cracking open the chocolate egg to find out what’s inside, many collectors buy a Pop Mart blind box for the sense of mystery – some might go so far as to suggest it satisfies a craving.  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 $US12. A burgeoning resale market has developed as collectors trade pieces to build a full collection, with rarer items selling for up to 40 times their original price.  Prices in markets outside Mainland China run 15-50 per cent higher than in Mainland China, depending on local taxes and logistics costs.  The gender balance of Pop Mart customers is split 70:30 towards women, and the majority of purchasers are aged 16 to 35. Pop Mart has a huge following among the big-spending Gen Z and Millennial groups. A typical buyer is like 28-year-old Beijing lawyer Wu Ge, who spent RMB 5000 ($US766) over the 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.  It’s all about the toys When Ning Wang, 35 and now a billionaire, founded Pop Mart, the business was focused on small gifts, notebooks, candies and personal items like handheld mirrors. A decade ago, it might have been fair to liken it to Miniso, another Chinese retail brand pursuing rapid international growth. But not now.    Around 2012, Wang had already recognised the popularity of toys in his stores. Noting the vending machines toymaker Bandai popularised in Japan, which 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 the past decade, he has been building a pool of more than 100 trademarked characters.  Now, the knick-knacks and stationery have gone from store shelves and the focus is totally on collectable toys. The blind boxes are complemented with more expensive figurines and a new high-end range called Mega, launched last year, that runs up to 90cm tall and sells for up to $US1000. The first in that range was the Space Molly x SpongeBob crossover, which went viral immediately after launch. One figurine, limited to 3000 units, drew more than 1 million bidders in an online auction.  Pop Mart’s range now stretches to thousands of items, with three or four new collections launching each month. Typically, these collections are planned a year in advance of launch and take 10 months to develop. A design centre draws talent from all over China and abroad.  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.  Those partner – or licensed – brands include toy companies such as Disney and Nickelodeon, through to fashion labels including Moncler and Ray-Ban. Last year, the company partnered with brands as diverse as US pop culture artist Keith Haring’s foundation, KFC China, skincare brand Kiehl’s and the Argentinian football team.  “We plan to expand these collaborations globally,” Moon said. “I hope that as our brand awareness is increasing, we have many chances to work with more. We are very open to new partnerships.”   Looking beyond Mainland China At the end of last year, Pop Mart’s Mainland China retail network spanned 340 physical stores and more than 1000 vending machines, which it refers to as roboshops.  But outside the mainland, the company is deriving most of its growth at present. Pop Mart commenced its global foray only in 2019 and its first permanent overseas store opened in South Korea in September 2020. By the end of last year, it had 12 stores and 79 roboshops in 23 countries and markets outside Mainland China. It had also reached many more through its own global website and online partnerships with Amazon, Shopee, and AliExpress.  And that is just the beginning. The unequivocal data from the Westfield London pop-up store experience reflects the growing global appeal of the concept – Pop Mart’s marriage of creativity and collectability is quickly transcending cultural borders. The company is now committed to targeting “the mainstream and the Westerner”, Moon explained.  The unexpectedly universal appeal of Pop Mart across cultures as diverse as China, the US, and Australia is perhaps one of the reasons the 12-year-old company managed to raise $US676 million in an initial public offering in Hong Kong in December 2020, valuing it at around $US7 billion. The first day of open market share trading doubled that valuation.  In 2020, Pop Mart sold more than 50 million toys. Its revenue rose 49.3 per cent, year on year, to $US382 million. Last year, the company’s revenue grew 79 per cent, to $US704.6 million, and net profit attributable to shareholders grew 70 per cent, to $US157.2 million.   As the company’s sales and share price grow, its retail reach continues to expand around the globe. Pop Mart will debut in Auckland, New Zealand in April and in Tokyo’s hip retail district Omotesando in May. Fifty new stores are planned by the international division by year’s end. There really seems to be no stopping this collectables juggernaut.  “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 bricks-and-mortar stores,” analyst Doug Young of Bamboo Works 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.” Better expansion, step by step Key to the headline sales growth and rapid international expansion is a clever tactical approach to conquering new markets that Pop Mart has developed during the past four years. Localisation is important for success in overseas markets, and Pop Mart takes a systematic approach. Merchandise is curated for each region as the retailer adapts its offer to suit local consumer preferences.  “Many companies overlook localisation when they do business overseas. We think the localisation of a brand should include localisation of management methods, manpower, and products,” Moon said. Indeed, each new Pop Mart market entry is planned with multiple steps, usually beginning with participation in an exhibition, such as a comic con or toy fair. An online presence will follow, providing the company with data to help determine the best geographical locations for a roboshop or even a physical store.    For example, the company exhibited at the ToySoul exhibition in Hong Kong in November 2019, opened its first roboshop in August the following year and its first two physical stores – at Harbour City and K11 Art Mall in Hong Kong – at the end of last year. While the order of events – exhibitions, then online promotions followed by opening of roboshops – might change in some markets, the strategy is always the same: slowly build brand awareness, starting with Asian communities, then build the range, presence, and target demographic accordingly.  “Since Pop Mart products combine cultural and artistic elements, we can’t target all overseas regions using the same approach,” Moon explained. “Culture, values, and perceptions of art vary in every corner of the world. “In this context, it is necessary to build a strategic plan to expand our reach.” That strategy involves paying keen attention to cultural differences among markets. “I think Asians – especially Koreans, Japanese, and Southeast Asian people – have a similar culture and some Westerners have a totally different cultural background. So we assume Westerners like the big or unique figurines, while Asians mostly opt for the smaller and cheaper ones. So it is totally different, but it exceeded my expectations.” The popularity, or lack thereof, of blind boxes in different markets demonstrates the importance of this aspect of localisation. In North American and European markets where Pop Mart has planted its flag, 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,” Moon said. There are also distinct differences in the types of characters people prefer in different countries.  “Character-wise, Korean customers prefer Pucky, Disney, and Sanrio. Our Japanese customers love Yuki and Instinctoy; however, our fans in Southeast Asia are very similar to China in terms of character preferences – they prefer Dimoo, Skullpanda, and Disney.” About 70 per cent of Pop Mart’s overseas sales revenue comes from Asian markets, the balance from Western territories, Moon said.  “This year, we are proactively entering markets like the US and in Europe, like the UK and France, so I hope that next year, we can grow many stores [in those markets]. Our international business has the highest potential opportunity.” What comes next? Beyond existing countries where Pop Mart already has a presence, Moon sees opportunities in Southeast Asia especially, citing Vietnam, the Philippines and Thailand as strong growth drivers. Pop Mart’s partnership with Shopee means its products can be bought online in the Philippines and Thailand, and last year it collaborated with a Vietnamese artist on a range – all moves aimed at steadily building market awareness in advance of a physical presence. In Vietnam, Pop Mart has had preliminary talks with local conglomerate Vingroup, which owns multiple shopping centres in major cities, but Covid-19 has thwarted progress on that potential partnership.   Pop Mart’s aggressive international expansion program shows no signs of slowing. Besides opening in new territories each year, the company is also focusing on expanding its footprint in existing territories, both online and offline.  Is there a chance the concept may lose momentum or fall from favour? 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,” he explained. “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.  “Pop Mart’s dream is to become a leading global pop culture and entertainment company. To realise this long-term vision, we seek to make meaningful developments globally and bring all our customers around the world joy. “We are not afraid of failure. I don’t think we are successful enough yet. It is true that there is a long way to go and there are many risks to face. However, I think we’ll be able to overcome any difficulties.” Last year’s sales figure of US$704.6 million suggests he might be right.