Building production lines and buying big IP licenses, the replicability of this road has laid hidden dangers for the future development of Bruco. Author: Chandos Aoi Editor: Haruno Recently, Bruco, which went to Hong Kong for the second time to submit its form, has completed a reformation of its destiny. It was first recognized as the Chinese version of Lego, and had a magnificent start. Founder Zhu Weisong used to be a partner of Nomad Network, and after realizing financial freedom, he founded Bruco in 2014, and got 857 million yuan of financing in the angel round. But it wasn’t until 2022, when it embraced the IP leg and started selling Ultraman, Transformers and other building blocks, that its financials improved and it turned a profit by the end of 2023. This makes it look more like Bubble Mart. From blind box IP to earnings growth trends, there’s no shortage of commonalities between these two companies. However, Bruco has its own troubles. In the IP business, it chose to cooperate with well-known IP, from the release of the first Ultraman blind box to achieve half a year revenue of 1 billion yuan, it took only 2.5 years As a comparison, Bubble Mart from selling the first blind box Sonny Angel to half a year revenue of 1 billion yuan, it took 5 years. It looks like Brooke took a shortcut, but it sacrificed gross margins to do so. In the same period when it first achieved $1 billion in half-year revenue, Bruco’s gross margin in the first half of 2024 was 52 9 , while Bubble Mart’s gross margin in the second half of 2019 had been as high as 66 64 , and in the first half of 2024 it was still as high as 64 0 . In several dimensions, this reordering is not yet complete. 01 Crash Course Brooke is now often compared to Bubble Mart. On December 6, 2024, just two days before Bruker filed its prospectus, a lot of old people with white hair were at the 2024 Transformers Cybertron Transformers Transformers is the name of a planet at the annual meeting site, snapping up Bruker’s limited edition of pink Optimus Prime. Some netizens complained It was supposed to be one person one Limited to 400, they spent 150 yuan to hire a high-priced errand boy did not win the scene of the elderly. A generation has a generation of eggs, the previous generation to grab the eggs of this generation, or because of scalpers. A number of netizens who claimed to be at the scene spit The old man just bought and transferred to the scalper , the latter took a lot of Bruco bags in hand. I’m afraid the scalper’s earnings are not low. As early as two days before the launch, idle fish players put up a link to Bruco pink Optimus Prime, the original price of 99 yuan, marked 550 yuan. By the end of the launch, the price had risen to 650 yuan, like a stock going up. A similar situation occurred with Bubble Mart. Back in 2019, the original price of 59 yuan for the Bubble Mart Pantheon Christmas hidden model was speculated by scalpers to a high price of 2,350 yuan, a wild increase of 39 times. Today, a Bruco large hidden model Eternal Shine Triga was speculated to 5,555 yuan, and a small hidden model Galaxy First Rise, originally priced at 39 yuan, was speculated to 1,180 yuan, a 30-fold increase. This may be Zhu Weisong in 2014 when he founded the predecessor of Grape Technology Bruker, not envisioned the plot. As a father of Zhu Weisong, because of the choice of gifts for their own children and focus on Lego toys, so Bruker in the early standard is Lego, and on the basis of the latter made improvements Focused on children aged 1 6 years old, large particles arc more rounded. Zhu Weisong was already wealthy and free at that time, and had been listed on the 2016 Hurun 80s white-handed rich list with a 2.6 billion yuan fortune , and his connections in the investment circle were also very good, and Bruker got 857 million yuan in the angel round. Bruco grows very fast, during 2018 2020 to realize the first growth rate of block sales for three consecutive years, and the amount of operating income of the block section in 2021 is as high as 330 million yuan. But behind the high growth is a high amount of investment in advertising and promotional activities, Bruker’s total revenue in 2021 can not even cover the 390 million yuan of sales and distribution expenses. Change of life Begins in 2022. Tide play represented by the blind box is on fire. 2017 During 2021, Bubble Mart grew from annual revenue of 158 million yuan to 4,491 million yuan, an amount that has more than doubled by 20 times, becoming synonymous with high growth. Mingchuang Yuping set up TOPTOY Tide Play, even Starbucks Want Want Morning Glory are crossing the border to play co-branded blind boxes. Blind boxes directly replace architectural models LEGO Bruker where the track , to become China’s largest popular toy market segment. Bruco is also launching a transformation in 2022. It jumped out of the previous age group of 16 years old, expanding the user group, and successively released Ultraman, Transformers, Heroes Unlimited, and other IP block man blind box, as well as dolls. Different from the common market 4 5 cm and 15 cm block man, Bruker pioneered the 10 cm size, easy to hold, and 14 movable eyes light, more restore the IP character details. At the same time, it has increased its efforts in offline channels, including brands such as Mingchuang Youpin, Morning Glory’s Nine Wooden Miscellaneous Society, and Cool Tide Play, as well as stationery stores around the campus. At the beginning of 2021, Bruco had only 40 distributors nationwide. However, as of June 30, 2024, it had covered about 150,000 offline outlets, including all Tier 1 and Tier 2 cities and more than 80 of Tier 3 cities. In the first half of 2024, the share of revenue contributed by Bruco’s online channel decreased to 7 1 from 51 8 in 2022, and the share of revenue from the dealer’s offline channel soared wildly to 91 6 . These adjustments basically announce that Brocade doesn’t want to continue to be the Chinese version of Lego. After shedding this identity baggage, Bruco seems to be in acceleration mode. It’s even faster than Bubble Mart. From the release of the first Ultraman blind box in 2022 to the first half of 2024, revenue reached 1 billion yuan, Bruker only took two and a half years. As a comparison, it took five years for Bubble Mart to start distributing its first blind box, Sonny Angel, in 2014 and to achieve a half-year operating income of more than $1 billion by the end of 2019. Of course, Bruker’s fast has Bubble Mart’s credit. The latter took on the role of market education. In 2022, the year of Bruco’s transformation, the demolition of blind boxes has become a trend among young people, and it has tasted the sweetness of planting trees in the past and multiplying coolness in the future. 02 Different IP business Both are business models combining IP and blind boxes, but there are still differences between Bruco and Bubble Mart. The key lies in the type of IP. Currently, Brocade has more than 50 licensed IPs, including Ultraman, Transformers, Naruto, Little Yellow Man, Detective Conan, Kitty Cat and so on. Among them, many of the head IP itself has enough popularity that even if they have not bought a blind box, consumers will know that Ultraman has to protect the Earth, and that Optimus Prime and Megatron have changed from best friends to mortal enemies. Bruco’s own IP Heroes Unlimited also features Yang Jian, who splits the mountain to save his mother, and Nezha, who strips the dragon’s tendons, and Sun Wukong, who haunts the Heavenly Palace. Consumers are very familiar with the story behind the IP, and are able to quickly form a consensus for consumption. This is reflected in the data. Bruco launched a blind box of the first series of Ultraman Gunstar Edition in the first quarter of 2022, priced at $39, and sales exceeded 140,000 units in the first quarter after the release. That year, the Ultraman IP contributed over $100 million in revenue to Bruco, and the following year it topped $500 million. By the first half of 2024, that figure had climbed to $600 million. In the same period, just two major IPs, Ultraman and Transformers, provided 76 1 of Brooke’s revenue. Bubble Mart will also have blind box products for licensed IPs such as Ultraman Transformers, but they are not mainstream. It follows a similar path to IP picks . From Molly The Monsters Skullpanda, to Dimoo, all of these artist IPs came into the limelight and were sought after by consumers after partnering with Bubble Mart. In the first half of 2024, the eight IPs, Molly The Monster Skullpanda Dimoo Crybaby Hirono Zsiga Hacipupu, contributed $78.2 billion, $62.7 billion, $5.75 billion, $3.78 billion, $3.49 billion, $24.5 billion, $12.3 billion, and $0.95 of Bubble Mart’s revenues in the first half of 2024, accounting for $17 2 13 billion of Bubble Mart’s revenues in the same period, respectively. The eight IPs contributed 782 million yuan, 627 million yuan, 575 million yuan, 378 million yuan, 349 million yuan, 245 million yuan, 1 23 million yuan and 095 million yuan to Bubble Mart, respectively, accounting for 172.13%, 13.7% and 12.6% of Bubble Mart’s revenue for the same period, or 69.7%. It is easy to see that both the amount of revenue contributed by IPs and the percentage of revenue accounted for by IPs are extremely balanced. Bubble Mart did not rely on a single IP like Bruco did. However, most of these artist IPs only have images, not well known tumble stories For Bubble Mart, this itself has the element of opening a blind box. Turning a niche artwork into a star IP is a matter of great uncertainty. It’s as difficult as Lehua Entertainment finding another Wang Yibo and Jiaxing Entertainment cultivating another Yang Mi. The cost to Bubble Mart is extremely high For many years in a row, it has spent nearly 1 4 of its revenue on distribution and sales expenses. Of course, the rewards of winning the bet are equally impressive. For example, in Bubble Mart’s overseas business, the explosive Labubu is an important contributor, it directly drive Bubble Mart’s Hong Kong, Macao, Taiwan and overseas business operating income from 376 million yuan in the first half of 2023 to 1.35 billion yuan in the first half of 2024, a surge of more than three times. Relying on the uniqueness of these artists’ IPs, Bubble Mart has built up a moat, and then has the foundation to charge into a broader market. This is Bruco does not have the imagination at the moment. It has proactively avoided the risks of the blind box approach, choosing to pay a certain cost for a certain IP to make a certain amount of money. This has allowed it to achieve rapid revenue growth while controlling its cost of sales. in 2021, Blindbox’s distribution and selling expenses amounted to $389 million, which is higher than its revenue of $330 million for the same period. By the first half of 2024, Bruco, which sells blind boxes, had reduced this cost to $120 million, just 11 54 of its $1,046 million in revenue over the same period. At the end of 2023, the nine-year-old company finally turned a profit, paying the price of lower uniqueness. The replicability of the path of building production lines and buying big IP licenses has laid hidden dangers for Bruco’s future development. And the difficulty of the big IP license itself is not low. The prospectus shows that the IP license fee in the cost of Bruco’s proportion of the annual increase, from 7 3 in 2022 to 18 5 in the first half of 2024. Bruker did not openly complain about the IP licensee, but the same Harry Potter IP license Ye Guofu once said Harry Potter such a top IP, the requirements of the partner is very high, after years of investigation, 2024 before deciding to work with us. A business common sense is that the authorization of famous IP is extremely strict. According to the prospectus disclosure, Brooke got Hasbro Hasbro’s Transformers authorization, able to sell Transformers block man blind box hand puppet. However, the customer service of Bruker’s flagship store on Tmall said that the Transformers IP products sold in the store are not able to be transformed for the time being. It is inferred that Bruker may not have obtained the authorization for the transformation of the IP like LEGO. In addition, although Bruco recently got the popular IP such as Pokémon, but these IP authorization time is shorter, such as Naruto, Marvel, Infinity Legends and Little Spider and his magical sidekicks, Pokémon Masked Knights, Super Fighters, the authorization of the expiration of the 2025. If we deduct the time for design and production, the time left for Bruco to sell is extremely limited. Additionally, competition around popular IPs tends to be more intense. Just for the Ultraman IP that Bruco relies on, the licensing partners include Spirit Creation Wanda Nangong Meng Mingchuang Youpin TOP TOY Bandai and so on. This brings up another worry for Brooke It can only go to roll price. 03 Unfulfilled Reordering Looking at product prices, it is clear that Bruco has embraced consumer downgrading. Brooke’s average selling price in 2021 Revenue over the same period Sales, which refers to the average price sold to customers such as distributors, was as high as $89, but during the first half of 2024, this figure has slipped to $19. In addition, it also launched the Transformers Star Edition, which is only 5 5 centimeters priced at $9 9 , in November 2024, which may further pull down the average selling price. Also licensed from the Transformers IP, LEGO’s products are basically priced in the triple digits. Bruco’s low price strategy is akin to Uniqlo’s move to introduce shaker in the first place. Low price is the road that Bruker has to take. From IP license, blind box form to sales channels, it does not have enough uniqueness. In other words, it lacks the bottom of the premium. In contrast, Bubble Mart is undergoing a brand upgrade. Products, Bubble Mart has launched ceramic texture paint warm color changing paint enamel resin dolls and other materials of the new products, pulling up the unit price of the product. For example, an enameled resin doll launched in October 2023 is priced at RMB 499, which is significantly higher than the pricing of RMB 399 for ordinary dolls. 2021 saw the launch of Mega, a high-end line, of which the pricing of the 1000 series is as high as RMB 5,999, and the launch of Bubble Mart has been a major step forward in the development of the brand. In terms of store locations, Bubble Mart favors opening its stores in shopping malls where luxury brands are concentrated in F1 prestigious streets. According to Winning Business’ data on shopping centers over 50,000 square meters nationwide as of July 2024, 70 of Bubble Mart’s domestic stores are located on the F1 floor, where luxury brands are concentrated. In overseas markets, Bubble Mart has opened stores in the heart of Oxford Street and near the Louvre in France. All these actions can strengthen the brand’s sense of high class. Comparing the two, it’s easy to see that Bubble Mart, which was transformed from a building block to a blind box, has just completed the first step to change its life. It has gained better sales figures and a broader market, and thus a basis for listing on the market. But it’s not a done deal. It still has a lot of specific worries How to improve the gross profit margin? In the first half of 2024, Brocade’s gross profit margin was 52 9, compared with Bubble Mart’s 64 in the same period, still a big gap Where is the next Ultraman? Listed companies are not like singers who can sing only one song in their lifetime. Currently, Brooke has the license for Ultraman IP until 2027, and the situation after the expiration is still uncertain. In a way, Brooke has original ideals. When it made the Chinese version of LEGO, it would improve its products by taking into account the actual needs of China’s younger children. After transforming into a blind box, it also once launched a national tide series, trying to convey the oriental aesthetics. But in the end, between Moon and Sixpence, it chose the latter. Money Tree Ottoman decided the direction for it. Another factor that pushed it to accelerate was perhaps the capitalists. It got 1.8 billion yuan in three rounds of financing before going public. According to the betting agreement, it needs to complete the listing by June 30, 2026. Ideally, perhaps, after completing the IPO milestone, Bruco could continue to take the second step of changing its fortunes. This is a path that Bubble Mart has traveled before. It used to be just an offline store selling toys in Beijing, and after finding a business model for the blind box, it quickly rose to the top and went public in December 2020, completing the first step of its rejuvenation. 3 years later, founder Wang Ning proposed to recreate another Bubble Mart overseas, and the overseas market laid out ahead of time has rapidly gained momentum, and ultimately, this goal was realized in 2024 a few months ahead of schedule. The excellent overseas performance helped Wang Ning to be listed in the 2024 Forbes Best CEOs list, and Bubble Mart also completed the second step of its rejuvenation. Can it continue to be Bubble Mart? This may determine the capital market’s attitude towards Bruco. Header image courtesy of AI Graphics
The replicability of the path of building production lines and buying big IP licenses has laid hidden dangers for Bruco’s future development.
Written by Chandor Aoi Edited by Haruno
Author Qandao Xiaoqui
Edited by Harano
Recently Bruco, which went to Hong Kong for the second time to submit its form, has accomplished a change of life. It was first recognized as China’s version of Lego, and had a magnificent start. Founder Zhu Weisong used to be a partner of Nomad Network, and after realizing financial freedom, he founded Bruco in 2014, and got 857 million yuan of financing in the angel round. But it wasn’t until 2022, when it embraced the IP leg and started selling Ultraman, Transformers and other building blocks, that its financials improved and it turned a profit by the end of 2023. This makes it look more like Bubble Mart. From blind box IP to earnings growth trends, there’s no shortage of common ground between these two companies. However, Bruco has its own troubles. In the IP business, it chose to cooperate with well-known IP, from the release of the first Ultraman blind box to achieve half a year revenue of 1 billion yuan, it took only 2.5 years As a comparison, Bubble Mart from selling the first blind box Sonny Angel to half a year revenue of 1 billion yuan, it took 5 years. It looks like Brooke took a shortcut, but it sacrificed gross margins to do so. In the same period when it first achieved $1 billion in half-year revenue, Bruco’s gross margin in the first half of 2024 was 52 9 , while Bubble Mart’s gross margin in the second half of 2019 had been as high as 66 64 , and in the first half of 2024 it was still as high as 64 0 . In a number of dimensions, this change of life is not yet complete.
Recently, Bruco, which went to Hong Kong for the second time to submit the form, has completed a change of life.
It was first thought to be the Chinese version of Lego, and got off to a magnificent start. Founder Zhu Weisong used to be a partner of Nomad Network, and after realizing financial freedom, he founded Bruco in 2014, and got 857 million yuan of financing in the angel round. But it wasn’t until 2022, when it embraced the IP thighs and started selling Ultraman, Transformers and other building blocks, that its financials improved and turned a profit by the end of 2023.
This makes it look more like Bubble Mart. From blind box IPs to earnings growth trends, there’s no shortage of things these two companies have in common.
However, Bruco has its own troubles.
In the IP business, it chose to cooperate with famous IPs, and it took only 2.5 years from releasing the first Ultraman blind box to realizing half-yearly revenue of 1 billion yuan As a comparison, Bubble Mart went five years from selling its first blind box, Sonny Angel, to half-yearly revenue of 1 billion yuan.
It looks like Brooke took a shortcut, but it sacrificed gross margins to do so. In the same period when it first achieved $1 billion in half-year revenue, Bruco’s gross margin in the first half of 2024 was 52 9 , while Bubble Mart’s gross margin in the second half of 2019 had been as high as 66 64 , and in the first half of 2024 it was still as high as 64 0 .
In a number of dimensions, this change of life is not yet complete.
01 Rapidly
Brooke is now often compared to Bubble Mart. December 6, 2024, just two days before Bruker filed its prospectus, many old people with white hair in the 2024 Transformers Cybertron Transformers in the name of a planet Annual Meeting site, snapping up Bruker’s limited pink Optimus Prime. Some netizens complained It was supposed to be one for each person Limited to 400, they spent 150 yuan to hire a high-priced errand boy did not win the scene of the elderly.
Bruker is now often compared to Bubble Mart.
On December 6, 2024, just two days before Bruker filed its prospectus, a lot of old people with white hair were at the 2024 Transformers Cybertron Transformers Transformers is the name of a planet annual meeting site, to grab Bruker’s limited pink Optimus Prime. Some netizens complained It was supposed to be one for each person Limited to 400, they spent 150 yuan to hire a high-priced errand boy did not win the scene of the elderly.
A generation has a generation of eggs, the previous generation to grab the eggs of this generation, or because of scalpers. A number of netizens who claimed to be at the scene spit The old man just bought and transferred to the scalper , the latter took a lot of Bruco bags in hand. I’m afraid the scalper’s earnings are not low. As early as two days before the launch, idle fish players put up a link to Bruco pink Optimus Prime, the original price of 99 yuan, marked 550 yuan. By the end of the launch, the price had risen to 650 yuan, like a stock going up. A similar situation occurred with Bubble Mart. Back in 2019, the original price of 59 yuan of Bubble Mart Pantheon Christmas hidden model was speculated by scalpers to a high price of 2,350 yuan, a wild 39 times. Today, a Bruco large hidden model Eternal Shine Triga was speculated to 5,555 yuan, and a small hidden model Galaxy First Rise, originally priced at 39 yuan, was speculated to 1,180 yuan, a 30-fold increase. This may be Zhu Weisong in 2014 when he founded the predecessor of Grape Technology Bruker, not envisioned the plot. As a father of Zhu Weisong, because of the choice of gifts for their own children and focus on Lego toys, so Bruker in the early standard is Lego, and on the basis of the latter made improvements Focused on children aged 1 6 years old, large particles arc more rounded. Zhu Weisong was already wealthy and free at that time, and had been listed on the 2016 Hurun 80s white-handed rich list with a 2.6 billion yuan fortune , and his connections in the investment circle were also very good, and Bruker got 857 million yuan in the angel round. Bruco grows very fast, during 2018 2020 to realize the first growth rate of block sales for three consecutive years, and the amount of operating income of the block section in 2021 is as high as 330 million yuan. But behind the high growth is a high amount of investment in advertising and promotional activities, Bruker’s total revenue in 2021 can not even cover the 390 million yuan of sales and distribution expenses. Change of life Begins in 2022. Tide play represented by the blind box is on fire. 2017 During 2021, Bubble Mart grew from annual revenue of 158 million yuan to 4,491 million yuan, an amount that has more than doubled by 20 times, becoming synonymous with high growth. Mingchuang Yuping set up TOPTOY Tide Play, even Starbucks Want Want Morning Glory are crossing the border to play co-branded blind boxes. Blind boxes directly replace architectural models LEGO Bruker where the track , to become China’s largest popular toy market segment. Bruco is also launching a transformation in 2022. It jumped out of the previous age group of 16 years old, expanding the user group, and successively released Ultraman, Transformers, Heroes Unlimited, and other IP block man blind box, as well as dolls. Different from the common 4.5 cm and 15 cm block man, Bruker pioneered the 10 cm size, easy to hold in hand, and 14 movable eyes light up, more restoration of IP character details.
A generation has a generation of eggs, the previous generation came to grab the eggs of this generation, or because of scalping. A number of netizens who claimed to be at the scene spit The old man just bought and transferred to the scalper , the latter hand took a lot of Bruco’s bag.
I’m afraid the scalper’s earnings are not low. As early as two days before the launch, idle fish players put up a link to Bruco pink Optimus Prime, the original price of 99 yuan, marked 550 yuan. By the end of the launch, the price had risen to 650 yuan, like a stock going up .
A similar situation occurred with Bubble Mart. Back in 2019, the original price of 59 yuan of Bubble Mart Pantheon Christmas hidden model was speculated by scalpers to a high price of 2,350 yuan, a wild 39 times. Today, a Bruco large hidden model Eternal Shine Triga was speculated to 5,555 yuan, and a small hidden model Galaxy First Rise, originally priced at 39 yuan, was speculated to 1,180 yuan, a 30-fold increase.
This may be the drama that Zhu Weisong had not envisioned when he founded the predecessor of GrapeTech Bruco in 2014.
As a father of Zhu Weisong, because of the choice of gifts for their own children and focus on LEGO toys, so Bruker in the early benchmark is LEGO, and on the basis of the latter made improvements Focus on children aged 1 6 years old, large particles arc more rounded.
Zhu Weisong has been wealth free at that time, had 2.6 billion yuan on the 2016 Hurun 80 rich list of white-handed entrepreneurs , in the investment circle of the network is also very good, Bruker in the angel round got 857 million yuan.
Bruco grows very fast, during 2018 2020 to realize the first growth rate of block sales for three consecutive years, and the amount of operating income of the block section in 2021 is as high as 330 million yuan. But behind the high growth is a high amount of investment in advertising and promotional activities, Bruker’s total revenue in 2021 can’t even cover the 390 million yuan of sales and distribution expenses.
Change of life Begins in 2022.
Tide play represented by the blind box is on fire. 2017 During 2021, Bubble Mart grew from annual revenue of 158 million yuan to 4,491 million yuan, an amount that has more than doubled by 20 times, becoming synonymous with high growth. Mingchuang Yuping set up TOPTOY Tide Play, even Starbucks Want Want Morning Glory are crossing the border to play co-branded blind boxes. Blind box directly replace the building model LEGO Bruko where the track , become China’s largest popular toy market segment.
Bruco also launched the transformation in 2022.
It jumped out of the previous age group of 1 6 years old, expanding the user group, and successively released a blind box of Ultraman, Transformers, Heroes Unlimited, and other IP block people as well as dolls. Differing from the common market 4 5 cm and 15 cm block man, Bruco pioneered the 10 cm size, easy to hold, and 14 movable eyes glowing, more reproduction of the IP character details.
At the same time, it has increased its efforts in offline channels, including brands such as Mingchuang Youpin, Morning Glory’s Nine Wooden Miscellaneous Society, and Cool Tide Play, as well as stationery stores around the campus. At the beginning of 2021, Bruco had only 40 distributors nationwide. However, as of June 30, 2024, it had covered about 150,000 offline outlets, including all Tier 1 and Tier 2 cities and more than 80 of Tier 3 cities. In the first half of 2024, the share of revenue contributed by Bruco’s online channel decreased to 7 1 from 51 8 in 2022, and the share of revenue from the dealer’s offline channel soared wildly to 91 6 . These adjustments basically announce that Brocade doesn’t want to continue to be the Chinese version of Lego. After shedding this identity baggage, Bruco seems to be in acceleration mode. It’s even faster than Bubble Mart. From the release of the first Ultraman blind box in 2022 to the first half of 2024, revenue reached 1 billion yuan, Bruker only took two and a half years. As a comparison, it took five years for Bubble Mart to start distributing its first blind box, Sonny Angel, in 2014 and to achieve a half-year operating income of more than $1 billion by the end of 2019.
At the same time, it has increased its efforts in the offline channel, including both brands such as Mingchuang Youpin Morning Glory’s Jiu Mu Miscellaneous Society Cool Tide Play, as well as stationery stores around the campus.
At the beginning of 2021, Brooke had only 40 distributors nationwide. However, as of June 30, 2024, it had covered about 150,000 offline outlets, including all Tier 1 and Tier 2 cities and more than 80 of Tier 3 cities. In the first half of 2024, the share of revenue contributed by Bruco’s online channel decreased to 7 1 from 51 8 in 2022, and the share of revenue from the dealer’s offline channel soared to 91 6 .
These adjustments basically announce that Bruco doesn’t want to be the Chinese version of Lego anymore.
After getting rid of this identity baggage, Brocade seems to be in acceleration mode.
It’s even faster than Bubble Mart.
From the release of the first Ultraman blind box in 2022 to the first half of 2024, when operating income reached 1 billion yuan, it took Bruker only two and a half years. As a comparison, it took five years for Bubble Mart to start distributing its first blind box, Sonny Angel, in 2014 and to achieve a half-year operating income of more than $1 billion by the end of 2019.
Of course, Bruker’s fast has Bubble Mart’s credit. The latter took on the role of market education. In 2022, the year of Bruco’s transformation, dismantling the blind box has become a trend among young people, and it has tasted the sweetness of planting trees in the past and multiplying coolness in the future.
02 Different IP business
Both are business models combining IP and blind boxes, but there are still differences between Bruco and Bubble Mart. The key lies in the type of IP. Currently, Brooke has more than 50 licensed IPs, including Ultraman, Transformers, Naruto, Little Yellow Man, Detective Conan, Kitty Cat, etc. Many of the headline IPs are well-known enough, even if they have not bought a blind box. Among them, many of the head IP itself has enough popularity, even if they have not bought a blind box, consumers will know that Ultraman to protect the Earth, know Optimus Prime and Megatron from close friends to mortal enemies.
Both are IP and blind box combination business model, Bruker and Bubble Mart still have differences.
The key is the type of IP.
Currently, Brooke has more than 50 licensed IPs, including Ultraman, Transformers, Naruto, Little Yellow Man, Detective Conan, Kitty Cat, etc. Many of these headline IPs are well known in their own right, even if they have never bought a blind box. Among them, many of the head IP itself has enough popularity, even if they have not bought a blind box, consumers will know that Ultraman to protect the Earth, know Optimus Prime and Megatron from close friends to mortal enemies.
Bruco’s own IP Heroes Unlimited also features Yang Jian, who splits the mountain to save his mother, and Nezha, who strips the dragon’s tendons, and Sun Wukong, who haunts the Heavenly Palace. Consumers are very familiar with the story behind the IP, and are able to quickly form a consensus for consumption. This is reflected in the data. Bruco launched a blind box of the first series of Ultraman Gunstar Edition in the first quarter of 2022, priced at $39, and sales exceeded 140,000 units in the first quarter after the release. That year, the Ultraman IP contributed over $100 million in revenue to Bruco, and the following year it topped $500 million. By the first half of 2024, that figure had climbed to $600 million. In the same period, just two major IPs, Ultraman and Transformers, provided 76 1 of Brooke’s revenue. Bubble Mart will also have blind box products for licensed IPs such as Ultraman Transformers, but they are not mainstream. It follows a similar path to IP picks . From Molly The Monsters Skullpanda, to Dimoo, all of these artist IPs came into the limelight and were sought after by consumers after partnering with Bubble Mart. In the first half of 2024, the eight IPs, Molly The Monster Skullpanda Dimoo Crybaby Hirono Zsiga Hacipupu, contributed $78.2 billion, $62.7 billion, $5.75 billion, $3.78 billion, $3.49 billion, $24.5 billion, $12.3 billion, and $0.95 of Bubble Mart’s revenues in the first half of 2024, accounting for $17 2 13 billion of Bubble Mart’s revenues in the same period, respectively. Matt’s revenue for the same period was 17 2 13 7 12 6 8 3 7 7 5 4 2 7 2 1 , totaling 69 7 .
Bruco’s own IP heroes are unlimited, among which the characters are also Yang Jian, who splits the mountain to save his mother, Nezha, who peels the dragon’s tendons, and Sun Wukong, who haunts the Heavenly Palace. Consumers are very familiar with the stories and characters behind the IPs, and are able to quickly form a consensus for consumption.
This is reflected in the data.
Bruco launched a blind box of the first series of Ultraman Gunstar Edition in the first quarter of 2022, priced at $39, and sales exceeded 140,000 units in the first quarter after the release. That year, the Ultraman IP contributed over $100 million in revenue to Bruco, and the following year it topped $500 million. By the first half of 2024, that figure had climbed to $600 million. In the same period, just two major IPs, Ultraman and Transformers, provided 76 1 of Bruco’s revenue.
Bubble Mart will also have blind box products for licensed IPs such as Ultraman Transformers, but they are not mainstream.
It follows a similar path to IP picks . From Molly The Monsters Skullpanda, to Dimoo, all of these artist IPs came into the limelight and were sought after by consumers after working with Bubble Mart.
In the first half of 2024, the eight IPs, Molly The Monster Skullpanda Dimoo Crybaby Hirono Zsiga Hacipupu, contributed $78.2 billion, $62.7 billion, $5.75 billion, $3.78 billion, $3.49 billion, $24.5 billion, $12.3 billion, and $0.95 of Bubble Mart’s revenues in the first half of 2024, accounting for $17 2 13 billion of Bubble Mart’s revenues in the same period, respectively. Matt’s revenue for the same period was 17 2 13 7 12 6 8 3 7 7 5 4 2 7 2 1 , totaling 69 7 .
It is easy to see that both the amount of revenue contributed by IPs and the percentage of revenue accounted for by IPs are extremely balanced. Bubble Mart did not rely on a single IP like Bruco did. However, most of these artist IPs only have images, not well known tumble stories For Bubble Mart, this itself has the element of opening a blind box. Turning a niche artwork into a star IP is a matter of great uncertainty. It’s as difficult as Lehua Entertainment finding another Wang Yibo and Jiaxing Entertainment cultivating another Yang Mi. The cost to Bubble Mart is extremely high For many years in a row, it has spent nearly 1 4 of its revenue on distribution and sales expenses. Of course, the rewards of winning the bet are equally impressive. For example, in Bubble Mart’s overseas business, the explosive Labubu is an important contributor, it directly drive Bubble Mart’s Hong Kong, Macao, Taiwan and overseas business operating income from 376 million yuan in the first half of 2023 to 1.35 billion yuan in the first half of 2024, a surge of more than three times. Relying on the uniqueness of these artists’ IPs, Bubble Mart has built up a moat, and then has the foundation to charge into a broader market. This is Bruco does not have the imagination at the moment. It has proactively avoided the risks of the blind box approach, choosing to pay a certain cost for a certain IP to make a certain amount of money. This has allowed it to achieve rapid revenue growth while controlling its cost of sales. in 2021, Bloco’s distribution and selling expenses amounted to $389 million, which is higher than its revenue of $330 million for the same period. By the first half of 2024, Bruco, which sells blind boxes, had reduced this cost to $120 million, just 11 54 of its $1,046 million in revenue over the same period.
It is easy to see that both the amount of revenue contributed by IP and the share of revenue are extremely well balanced. Bubble Mart is not as dependent on a single IP as Bruco.
However, most of these artist IPs are only images, not well-known tumbledown stories For Bubble Mart, there’s an element of opening a blind box in itself.
The matter of turning niche artwork into celebrity IP is highly uncertain. It’s as difficult as Lehua Entertainment finding another Wang Yibo and Jiaxing Entertainment cultivating another Yang Mi. Bubble Mart pays extremely high costs For many consecutive years, it has spent nearly 1 4 of its revenue on distribution and sales expenses.
Of course, the rewards of winning the bet are equally impressive. For example, in Bubble Mart’s overseas business, the pop-up Labubu is an important contributor, which directly drove Bubble Mart’s Hong Kong, Macao, Taiwan and overseas business revenue from 376 million yuan in the first half of 2023 to 1.35 billion yuan in the first half of 2024, a surge of more than three times.
Relying on the uniqueness of these artists’ IPs, Bubble Mart has built up a moat, and then has the foundation to charge into a broader market.
This is Bruco does not have the imagination at the moment.
It actively avoids the risks of the blind box approach, choosing to pay a certain cost, buy a certain IP and make a certain amount of money.
This has allowed it to achieve rapid revenue growth while controlling its cost of sales. in 2021, Bloc’s distribution and selling expenses amounted to a whopping $389 million, which was higher than the $330 million in revenue for the same period. By the first half of 2024, Bruco, which sells blind boxes, had reduced this cost to $120 million, just 11 54 of its $1,046 million in revenue over the same period.
At the end of 2023, the nine-year-old company finally turned a profit, paying the price of lower uniqueness. The replicability of the path of building production lines and buying big IP licenses has laid hidden dangers for Bruco’s future development. And the difficulty of the big IP license itself is not low. The prospectus shows that the IP license fee in the cost of Bruco’s proportion of the annual increase, from 7 3 in 2022 to 18 5 in the first half of 2024. Bruker did not openly complain about the IP licensee, but the same Harry Potter IP license Ye Guofu once said Harry Potter such a top IP, the requirements of the partner is very high, after years of investigation, 2024 before deciding to work with us. A business common sense is that the authorization of famous IP is extremely strict. According to the prospectus disclosure, Brooke got Hasbro Hasbro’s Transformers authorization, able to sell Transformers block man blind box hand puppet. However, the customer service of Bruker’s flagship store on Tmall said that the Transformers IP products sold in the store are not able to be transformed for the time being. It is inferred that Bruker may not have obtained the authorization for the transformation of the IP like LEGO. In addition, although Bruco recently got the popular IP such as Pokémon, but these IP authorization time is shorter, such as Naruto, Marvel, Infinity Legends and Little Spider and his magical sidekicks, Pokémon Masked Knights, Super Fighters, the authorization of the expiration of the 2025. If we deduct the time for design and production, the time left for Bruco to sell is extremely limited. Additionally, competition around popular IPs tends to be more intense. Just for the Ultraman IP that Bruco relies on, the licensing partners include Spirit Creation Wanda Nangong Meng Mingchuang Youpin TOP TOY Bandai and so on. Which brings us to another of Brooke’s troubles It can only go on a price roll.
At the end of 2023, the nine-year-old company finally turned a profit, paying the price of lower uniqueness. The replicability of the road of building production lines and buying big IP licenses has laid hidden dangers for the future development of Bruco.
And the difficulty of the big IP license itself is not low.
Prospectus shows that IP licensing costs in the cost of Bruco’s share of the year-on-year increase, from 7 3 in 2022 rose to 18 5 in the first half of 2024.
Bruker did not openly complain about the IP licensee, but also for the Harry Potter IP authorization Ye Guofu once said Harry Potter such a top IP, the requirements of the partner is very high, after years of investigation, 2024 before deciding to work with us.
It is common sense that the licensing of famous IPs is extremely strict.
According to the prospectus disclosure, Brooke got Hasbro Hasbro’s Transformers authorization, able to sell Transformers block man blind box hand puppet. However, the customer service of Bruco’s flagship store on Tmall said that the Transformers IP products sold in the store are not able to be transformed for the time being, so it is inferred that Bruco may not have obtained the authorization for the transformation of the IP like LEGO.
In addition, although Bruco recently got the popular IP such as Pokémon, but these IP authorization time is shorter, such as Naruto, Marvel, Infinity Legends and Little Spider and his magical sidekicks, Pokémon Masked Knights, Super Fighters, the authorization of the expiration of the 2025. If we deduct the time for design and production, the time left for Bruco to sell is extremely limited.
Additionally, competition around popular IPs tends to be more intense. For the Ultraman IP alone, on which Bruker relies, licensees include Spirit Creative, Wanda Nangong Meng, Mechatronics, TOP TOY, Bandai, and others.
Which brings us to another of Brooke’s troubles It can only go on a price roll.
03 Unfinished Reordering
Looking at product prices, it’s clear that Brooke has embraced consumer downgrading. Brooke’s average selling price in 2021 Revenue over the same period Sales, which refers to the average price sold to customers such as dealers, was a whopping $89, but during the first half of 2024, that figure had slipped to $19. In addition, it also launched the Transformers Star Edition in November 2024, which is only 5 5 centimeters Priced at $9 9 , which may further pull down the average selling price.
In terms of product pricing, Bruco is clearly embracing consumer downgrades.
Bruco’s average selling price in 2021 Revenue over the same period Sales, which refers to the average price sold to customers such as resellers, was as high as $89, but during the first half of 2024, this figure has slipped to $19. In addition, it also launched the Transformers Star Edition in November 2024, which is only 5 5 centimeters Priced at $9 9 , which may further pull down the average selling price.
Also licensed from the Transformers IP, LEGO’s products are basically priced in the triple digits. Bruco’s low price strategy is akin to Uniqlo’s move to introduce shaker in the first place. Low price is the road that Bruker has to take. From IP license, blind box form to sales channels, it does not have enough uniqueness. In other words, it lacks the bottom of the premium. In contrast, Bubble Mart is undergoing a brand upgrade. Products, Bubble Mart has launched ceramic texture paint warm color changing paint enamel resin dolls and other materials of the new products, pulling up the unit price of the product. For example, an enameled resin doll launched in October 2023 is priced at RMB 499, which is significantly higher than the pricing of RMB 399 for ordinary dolls. 2021 saw the launch of Mega, a high-end line, of which the pricing of the 1000 series is as high as RMB 5,999, and the launch of Bubble Mart has been a major step forward in the development of the brand. In terms of store locations, Bubble Mart favors opening its stores in shopping malls where luxury brands are concentrated in F1 prestigious streets. According to Winning Business’ data on shopping centers over 50,000 square meters nationwide as of July 2024, 70 of Bubble Mart’s domestic stores are located on the F1 floor, where luxury brands are concentrated. In overseas markets, Bubble Mart has opened stores in the heart of Oxford Street and near the Louvre in France. All these actions can strengthen the brand’s sense of high class. Comparing the two, it’s easy to see that Bubble Mart, which was transformed from a building block to a blind box, has just completed the first step of changing its destiny. It has gained better sales figures and a broader market, and thus a basis for listing on the market. But it’s not a done deal. It still has a lot of specific worries. How to improve the gross profit margin? In the first half of 2024, Bruco’s gross profit margin was 52.9, compared to Bubble Mart’s 64 in the same period, which is still a big gap.
The same Transformers IP license, LEGO’s products are basically priced in the triple digits. Bruco’s low-priced strategy is like Uniqlo’s move to launch shaker fleece in the first place.
Low price is the road that Brooke has to take. From the IP license Blind box form to sales channels, it does not have enough uniqueness.
In other words, it lacks the bottom of the premium.
In contrast, Bubble Mart is undergoing a brand upgrade.
Products, Bubble Mart has launched ceramic texture paint warm color-changing paint enamel resin dolls and other materials of new products, pulling up the unit price of the product. For example, an enamel doll launched in October 2023, priced at 499 yuan, significantly higher than the ordinary doll pricing of 399 yuan. 2021 launched the high-end line Mega, of which the 1000 series pricing is as high as 5999 yuan.
In terms of store locations, Bubble Mart favors opening its stores in shopping malls where luxury brands are concentrated in F1 prestigious streets. According to Winning Business’ data on shopping centers with more than 50,000 square meters in China as of July 2024, 70 of Bubble Mart’s domestic stores are located on the F1 floor of malls with a high concentration of luxury brands.
In overseas markets, Bubble Mart has opened stores in the heart of Oxford Street and near the Louvre in France. All these actions can strengthen the brand’s sense of premium.
Comparing the two, it’s easy to see that by transforming from building blocks to a blind box, Bubble Mart is just the first step in the process of changing its destiny. It has gained better sales figures and a wider market, which gives it the basis to go public.
But it’s not a done deal. It still had a lot of specific problems.
In the first half of 2024, Bruco’s gross margin was 52.9%, which is still far from Bubble Mart’s 64% in the same period.
Where is the next Altman? Listed companies are not like singers who can sing only one song for the rest of their lives. Currently Brooke got the license of Ultraman IP is until 2027, after the expiration of the situation, there is still a large uncertainty.
In a way, Brooke has original ideals. When it made the Chinese version of LEGO, it would improve its products by taking into account the actual needs of China’s younger children. After transforming into a blind box, it also once launched a national tide series, trying to convey the oriental aesthetics. But in the end, between Moon and Sixpence, it chose the latter. Money Tree Ottoman decided the direction for it. Another factor that pushed it to accelerate was perhaps the capitalists. It got 1.8 billion yuan in three rounds of financing before going public. According to the betting agreement, it needs to complete the listing by June 30, 2026. Ideally, perhaps, after completing the IPO milestone, Bruco could continue to take the second step of changing its fortunes. This is a path that Bubble Mart has traveled before. It used to be just an offline store selling toys in Beijing, and after finding a business model for the blind box, it quickly rose to the top and went public in December 2020, completing the first step of its rejuvenation. 3 years later, founder Wang Ning proposed to recreate another Bubble Mart overseas, and the overseas market laid out ahead of time has rapidly gained momentum, and ultimately, this goal was realized in 2024 a few months ahead of schedule. The excellent overseas performance helped Wang Ning to be listed in the 2024 Forbes Best CEOs list, and Bubble Mart completed the second step of its rejuvenation. Can it continue to be Bubble Mart? That may determine the capital market’s attitude toward Brooke.
In a way, Bruco has an original vision. When it made the Chinese version of LEGO, it would take into account the actual needs of China’s younger children and improve its products. After transforming into a blind box, it also once launched a national wave series, trying to convey oriental aesthetics. But in the end, between the moon and sixpence, it chose the latter.
Money Tree Ottoman decided the direction for it. Another factor that pushed it to accelerate was perhaps the capitalists. It got 1.8 billion yuan in three rounds of financing before going public. It needs to complete its IPO by June 30, 2026, according to the betting agreement.
Ideally, perhaps, after completing the IPO milestone, Bruco could continue to take the second step of changing its fortunes.
This is the path that Bubble Mart has traveled before.
It used to be just an offline store selling toys in Beijing, and after finding the business model of the blind box, it quickly rose to the top and went public in December 2020, completing the first step of its rejuvenation. 3 years later, founder Wang Ning proposed to recreate another Bubble Mart overseas, and the overseas market laid out in advance made rapid progress, and ultimately, this goal was realized a few months ahead of schedule in 2024, and the outstanding performance of the company helped it to be selected for the 2024 Fortune 500 Award. Wang Ning’s outstanding overseas performance has helped him to be selected as one of the best CEOs in the Forbes 2024 list, and Bubble Mart has also completed the second step of its rejuvenation.
Can it continue to be Bubble Mart? That may determine the capital market’s attitude toward Brooke.
Header image courtesy of AI Graphics
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