In March, all eyes were on designer toys.
Pop Mart released its latest financial report, showing annual revenue breaking the RMB 10 billion (USD 1.4 billion) mark for the first time. Profits rose more than 180%, and its market capitalization hit a record high of over HKD 200 billion (USD 25.7 billion).
Meanwhile, Top Toy, a designer toy brand under Miniso, opened its first flagship store in a prime location on Shanghai’s Nanjing Road. At the same time, it announced a major global expansion strategy: to open more than 1,000 stores across the world’s top 100 commercial districts within the next five years.
“Cultural consumption and global cultural expansion are the direction for both Miniso and Top Toy,” said Ye Guofu, founder of Miniso.
Top Toy entered the market just a day after Pop Mart went public, and while it was a latecomer, momentum has been building. Last year, the company reported revenue of RMB 980 million (USD 137.2 million), a 45% increase year-on-year. It also turned a profit. The number of stores nearly doubled—from 148 to 276.
As for its international footprint, Top Toy has already opened five stores in Southeast Asia, in markets like Malaysia, Indonesia, and Thailand. Looking ahead, the company plans for overseas sales to account for more than half of its total business.
Naturally, comparisons surface as both companies vie for position in the same space. But when asked how Top Toy stacks up against Pop Mart, founder Sun Yuanwen told 36Kr he doesn’t view Pop Mart as a direct competitor. The two are diverging in approach: Pop Mart builds around its own original IP, while Top Toy focuses on derivative works licensed from major IPs.
Top Toy did initially attempt to follow Pop Mart’s path by developing original characters. But, as Sun put it, “We lost money in a way that was just ugly.” That chapter, he said, is closed.
“The golden window for original IPs has already passed, and it needs to find a new way forward,” Sun said. “At the time, we saw an opportunity in the blind box segment for major IPs—huge market potential, but no dominant players. So we made a decisive move into this space, focusing on derivative works of top-tier IPs.”
The following transcript has been edited and consolidated for brevity and clarity.
36Kr: You launched your first store just as Pop Mart went public. Its path had already been validated. Didn’t you consider copying that model?
Sun Yuanwen (SY): We did. In our first year, we developed our own original IPs—and it was a disaster financially. We lacked the capacity and the resolve to really pull off original IP development.
Over the past two to three years, we’ve opened many stores and tested a variety of IPs. Eventually, we realized we had to find a path that worked for us. That’s when we discovered derivative works based on major IPs—it actually worked.
So I’m not saying Pop Mart’s model is bad. It’s just that we wanted to play to our strengths and stick to our own ideas, rather than blindly following someone else’s path.
36Kr: Was the financial loss due to poor sales or high development costs?
SY: Both. Development costs were sky-high, and we didn’t have the capacity to meticulously craft the products or assemble a professional team to incubate and operate the IPs. Sales were indeed poor, too.
By that point, the market had already matured. Consumers were obsessing over a few established original IPs. So launching a new IP meant burning a ton of cash on marketing, with a long and uncertain return timeline.
Meanwhile, there was still a massive, relatively untapped market for blind boxes based on major IPs, and no leading players in that space. Given our strengths and efficiency, we decided to enter that lane and become a leader in derivative works based on top-tier IPs.
36Kr: Your focus is on derivative works of major IPs—like Disney and Sanrio. Aren’t licensing fees really high?
SY: Licensing terms from big IP holders are public and transparent—they don’t tailor terms to each licensee. What matters to them is whether you have the strength to execute. IP owners look for two things: your product development and operational capabilities, and your ability to move product—whether your creations can spread within and across communities.
Even if you offer more money, a company like Disney might still reject you if it doubts your ability to run with the IP. We’ve proven over the past few years that we’re capable of handling these properties.
36Kr: Are your derivative works of major IPs selling well because of your unique development and operations, or because the IPs themselves already have strong brand equity?
SY: We believe the uniqueness of the IP itself isn’t that important—it’s the uniqueness of the design that matters. So when we license big IPs, we don’t just use their existing image banks. We redesign everything from scratch.
We also really understand our consumers. We reimagine IPs in ways that resonate with them—that’s our entire logic.
36Kr: If the uniqueness of an IP isn’t important, why is everyone fighting to sign major IPs?
SY: Because major IPs come with built-in audiences, applications, and a degree of certainty that original IPs just don’t offer. That’s a completely different logic from uniqueness.
And precisely because uniqueness isn’t the main factor, many players can work with the same IP. We don’t have exclusive rights to a big IP, but during the development process, we rely on our own design, supply chain, and distribution channels to execute better than anyone else.
It’s like being on a grassland—you don’t need to be the lion. Be the fastest antelope. Even if others are working with the same IP, we aim to do it best. That’s more aligned with where we are in our growth phase.
Original IP development, on the other hand, is a totally different route—Pop Mart has stuck with that story all along.
36Kr: So have you succeeded in doing it best?
SY: Over the past two to three years, our strong sales have validated this approach. It’s what turned us from lossmaking to profitable.
36Kr: Have you developed a playbook?
SY: We’ve built out a robust database and consumer profiling system, and we have a steady stream of returning customers. That gives us a big edge over individual studios or brands.
36Kr: But Pop Mart has those too.
SY: Sure, and in many ways, it’s executing really well across the board. Like I said before, it is focused on original IP. If we just followed Pop Mart’s lead, we wouldn’t be differentiated enough.
36Kr: What does it take to make an original IP go viral?
SY: There’s no formula—it’s almost metaphysical. You need a deep bench of original designs, the ability to incubate and operate the IP, and you have to test it in the market. All of that requires huge investment, with way too many unknowns. We’d rather chase something more certain.
36Kr: Is there also uncertainty in whether derivative works of big IPs will succeed?
SY: Much less. Take Disney and Sanrio—they have been operating for decades. So when a new product format enters the market, there’s an opportunity window. It’s just a matter of who moves first. Not many people were doing new product formats for mature IPs, so we jumped in early and reaped the first wave of returns.
36Kr: Back when you were trying to build original IPs, was Ye Guofu involved in the decision-making?
SY: He was involved every step of the way. All decisions were made jointly. At the time, we were just entering the designer toy space—it was all trial and error.
36Kr: Was Pop Mart’s IPO a factor in your decision to enter the market?
SY: We’d been preparing to open our first store for six months to a year. Back then, blind boxes and figurines were still niche. I made the pitch saying that, as a kid from the 1990s, I don’t know anyone who doesn’t like figurines. But the market was relatively blank, so we wanted to launch a store. We were already working on blind boxes too. When Pop Mart went public, the market exploded overnight. That wasn’t something we anticipated.
36Kr: With no clear benchmark, how did you convince Ye Guofu?
SY: I made a proper business plan. I mean, if you’re going to pitch for money, you’ve got to show something [laughs].
36Kr: Did he have doubts?
SY: His biggest question was whether this would become a significant industry or remain a niche business. At the time, it looked like a small opportunity. In my pitch deck, I didn’t even mention Pop Mart—I used Bandai’s toy stores in Japan as a reference instead.
When I made the pitch, Pop Mart wasn’t yet public and only had fewer than 100 stores. Meanwhile, Miniso had 3,000 stores in China alone. To Ye, Pop Mart seemed small. But after it went public, suddenly everyone thought blind boxes were the next big thing. So honestly, both the industry and we ourselves owe Pop Mart a thank you.
36Kr: Did Pop Mart’s performance after the IPO influence or motivate you?
SY: It proved that blind boxes were going to become a major category. So we doubled down—allocating more shelf space and increasing sales focus.
We were actually the first company to realize blind boxes would become a dominant product type. When we opened our first store the day after Pop Mart listed, blind boxes weren’t our main focus—we also had figurines, statues, and other categories. But soon after, we realized blind boxes could be the core product of the designer toy world.
36Kr: Back in 2021, you said 70% of the product mix was developed in-house and 30% was sourced externally. What’s the ratio now?
SY: It’s 50-50 now. But we’re aiming for a 70-30 split again. That 30% provides variety—we want to keep exploring new IPs and product categories by partnering with other outstanding brands. We don’t want to lock ourselves in a bubble. Otherwise, the industry won’t scale.
36Kr: Why reduce the share of externally sourced products?
SY: Because we need strong financial metrics. We’ll still empower valuable original IPs, domestic IPs, and innovative studios—we want to serve consumer demand. But pure reselling leads to homogenization and competition on sameness. From a brand standpoint, if you can’t attract consumers into your stores, you’re done.
36Kr: So is profitability the top goal?
SY: Not exactly. Our top goal is global brand recognition—to open 100 stores in the world’s top 100 malls.
We’re still investing heavily, and we don’t really care whether profits are at 10% or 15%. But we do need to be profitable—we’re part of a publicly listed company and have to be accountable to shareholders. So while profit isn’t the main goal, a company that never turns a profit just isn’t viable.
36Kr: Is that something Ye Guofu has demanded?
SY: No. That’s just my own understanding of how a business should work. If you’re not making money, you can’t reinvest. How do you open 100 stores if you’re always bleeding cash? The group has supported us for four or five years—we can’t keep relying on that. It’s undignified. Now we’ve got our own cash flow and we’re profitable.
36Kr: Store openings are expensive. How do you know your model is sustainable?
SY: We’re big enough now to cover those costs. Of course, there was a painful transition from small to large scale. In year one, yes, costs were high because we didn’t have enough stores. But we’ve turned that corner. We’re near 300 stores now, and last year’s revenue hit nearly RMB 1 billion. Going forward, our marginal costs will shrink. That’s a good sign.
36Kr: You once said your strengths and weaknesses are both very clear?
SY: Our strengths are in store operations and supply chain. In those areas, we’re neck and neck with Pop Mart—or even better when it comes to international expansion, because our group already has years of overseas experience.
Our weaknesses are the lack of a first-mover advantage and strong original IPs. Pop Mart is the market leader, and its brand assets are stronger than ours.
But look—they have been at this for 15 years. We’ve only been around for four. That’s fair. Over the next five to ten years, we’ll continue closing the gap.
36Kr: Who do you consider your main competitor now?
SY: Honestly, we don’t see anyone as our direct competitor.
36Kr: But you kept mentioning Pop Mart in your product launch presentation.
SY: People care about it, so I have to address it. But Pop Mart isn’t really our rival. I actually love having stores next to theirs. It helps grow the entire market. I’d love to see a third or fourth big player enter the space—that’s the only way to prove this market is really big.
Pop Mart is like the iOS closed-loop system—it controls everything in-house. We’re more like Android—we’re building a platform that accommodates third-party products and IPs.
36Kr: When your plushies or blind boxes are on shelves next to Pop Mart’s, why would consumers choose yours?
SY: That’s not quite how it works. This is fan-driven. If you’re a Wang Yibo fan, you’re not buying a Xiao Zhan concert ticket. Our buyers are fans of specific IPs—if they love Disney or Sanrio, they’ll buy our stuff. If they love Labubu plushies, they will buy Pop Mart’s.
People follow the IPs they love. If the product is good, they’ll buy it. If not, they will complain.
36Kr: But fan culture still has different tiers—like Wang Yibo versus Jay Chou.
SY: Same with IPs. Some stay hot for decades—like Jay Chou for 20 years, or Wang Yibo for seven to eight years. But the nature of their fame differs. Some IPs succeed through content, others through design. You have to find the most fitting way to convey each IP’s vibe.
36Kr: How do you identify the right “vibe” during IP development?
SY: We’re in constant contact with consumers. We gather a lot of user feedback and data to identify common emotional denominators.
36Kr: What’s the most important thing for Top Toy in the next one to three years? And what are you most curious about regarding competitors?
SY: The most important thing is store openings and product development. Keep signing IPs, designing products, engaging with users, and exploring new formats. You’ve got to plant seeds to grow trees. You can’t expect a tree to sprout if you don’t even plant a seed. That seed might die, or it might grow into a sapling—or it could thrive. But first, you’ve got to plant.
As for competitors—I’m most curious about what product category they will bet on next.
36Kr: Is there a common fear across the industry?
SY: That consumers might lose interest in designer toys. What if people get tired of the category? Look at sportswear—it’s booming now because more people are exercising. But what if people stop working out someday? The same fear exists for us—what if consumers lose interest in designer toys? That’s something we all have to face.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Li Xiaoxia for 36Kr.