Toy craze pays a high price

Victor Zhong

Chinese "blind box" toymaker Pop Mart International (9992) fell up to 15 percent after being criticized by state media regarding a boom in its mystery boxes.

Pop Mart generates most of its profits from "blind box" toys - a mystery box containing a collectible figurine.

The boxes contain a range of figurines and are drawn by luck, which sometimes leads to people getting several of the same model or their favorite or hidden ones.

State media Xinhua News Agency said over the weekend that the boxes are causing overspending among the young.

It indicated that the boxes are leading to addiction and gambling problems, and called for further regulation of the business model in a recently published article.

This came before the company's share price dropped by 9.92 percent to HK$77.65 yesterday, even though it was not named in the Xinhua article.

The price of a box ranges between 49 yuan (HK$58.19) and over 100 yuan.

Data from a research company showed that the value of the market in the mainland has exceeded 2.5 billion yuan and the compound annual growth rate from 2014 to 2018 was 15.6 percent, indicating that it has set off a trend in the mainland, Xinhua reported.

Each box holds a figurine that may be a branded product or character, including the popular Sonny Angel or Molly figurines.

Other than the common models, some boxes contain hidden or rare figurines, which are harder to find.

For example, a set of Molly series boxes produced by Pop Mart usually has 12 regular models as well as one hidden model, with the odds of getting the hidden one coming in at one chance in 144.

In order to get the hidden toys, many players have bought multiple boxes, with some spending thousands on whole cartons in order to get the rare models.

A couple reportedly spent 200,000 yuan in four months, while a 60-year-old buyer spent 700,000 yuan in a year.

Speculation has also contributed to the trend, as more than 300,000 box players traded their holdings online in mid-2019, according to Xianyu, the Chinese version of eBay.

The price of the most-wanted box reportedly soared as much as 39 times.

A museum in the central province of Henan recently launched archeology boxes containing miniature relics for between 70 and 90 yuan.

It allows the buyers to participate in and understand the process of archeological excavation.

The boxes reported a revenue of over 500,000 yuan via the online channel in five days, the museum's data showed.