Blind Box Craze: The Billion-Dollar Market Code from Trendy Toys to Luxury Goods

Blind boxes are one of the most expensive hobbies for Generation Z and Millennials, and the world of blind boxes hides a multi-billion dollar market among young people. This article takes you inside the world of blind boxes and explains why it's taking the world by storm and rapidly expanding in Southeast Asia.

Today's trend culture is dominated by Generation Z (born between 1997 and 2012) and Millennials (born between 1981 and 1996).

As the main force in the new-age consumer market, they are passionate about trendy goods and have fueled the flourishing of trend culture. Coupled with the rise of social media, the spread of trendy and cultural products has accelerated. Trendy toys like blind boxes have also become incredibly popular, becoming a sought-after trendy item among young people.

The concept of blind boxes itself is not new. As the name suggests, blind boxes involve placing items in opaque packaging, capitalizing on consumers' curiosity to sell the goods. Blind boxes originated from Japan's lucky bags, which supermarkets initially placed in opaque bags to dispose of unsold goods, creating a sense of uncertainty and luring customers to purchase.

In the 1970s and 1980s, a similar culture emerged in Japan called gashapon (Gashapon). Today, blind boxes have successfully replaced the fading gashapon culture and the nearly forgotten lucky bags in Singapore, capturing the hearts of young consumers with a vengeance.

In today's world where "everything can be blind-boxed," all manner of consumer goods, from model toys and stationery to clothing and cosmetics, hotels and air tickets, have jumped on the blind box economy.

In the region, China holds the largest market for blind boxes. According to market research firm Statista, blind boxes represented China's largest popular toy market segment in 2021, reaching approximately 9.7 billion RMB (approximately 1.852 billion SGD). Between 2017 and 2021, China's blind box market experienced significant growth, with a compound annual growth rate (CAGR) of nearly 130%. Statista predicts that China's popular toy industry will continue to grow in the coming years, exceeding 110 billion RMB by 2026.

In an exclusive interview, Li Jianggan, CEO of Momentum Works, stated, "Our research shows that the Southeast Asian blind box market is currently 6% to 7% of China's. We project a CAGR of 35% to 40% over the next three years. Pop Mart is the largest player in this market."

Li Jianggan believes that, just as capsule toy culture became popular in Japan as society became more affluent, the overall blind box market, including Pop Mart's, boom in China coincided with China's per capita GDP surpassing $10,000.

Blind boxes offer primarily emotional and social value to young consumers. Some consumers appreciate the design, some buy out of curiosity due to their online popularity, and some buy for collaborations with their favorite celebrities or brands. Anime-themed users, particularly those interested in Japanese anime, are more willing to pay for their favorite anime characters.

When discussing blind boxes, Pop Mart, the blind box giant, is a natural choice. It's currently the world's largest blind box supplier and recently opened a 40,000-square-meter blind box character theme park in Beijing, demonstrating its immense popularity.

In an interview, Zhang Jinglei, Head of Strategic Partnerships at Pop Mart, declined to disclose how many blind boxes Pop Mart sells daily, citing commercial reasons, but he did say that the company releases a new blind box series every week. He also shared his views on the popularity of blind boxes and the idea that "everything can be a blind box."

Zhang Jinglei attributes this market situation to several reasons. First, contemporary consumers, especially the younger generation, have a growing demand for personalized and novel experiences. Blind boxes, with their suspense and collectible value, satisfy young people's demand for unique experiences and instant gratification.

The rise of social media has also accelerated the spread of trendy and cultural products. Zhang Jinglei explained, "Young people are increasing social interaction by sharing unboxing videos and pictures, which has also fueled the popularity of blind box culture. Furthermore, other non-trend toy industries have also begun using blind boxes for promotional purposes, indirectly popularizing and mainstreaming the concept of trendy blind boxes."

Zhang Jinglei added, "The content and attributes of blind boxes transcend the boundaries of simple toys. The cultural, social, and emotional attributes they embody, along with intellectual property (IP) like Pop Mart, also imbue trendy toys with a higher emotional and social value."

Pop Mart has also collaborated with numerous artists and designers to launch diverse blind box series and other trendy toy products to cater to the preferences and collectible needs of consumers of all ages. Zhang Jinglei believes that this collaborative model not only enriches the IP lineup but also enhances the artistic and collectible value of the blind boxes.

Perhaps because its customer base is more heavily skewed towards Generation Z and millennials, Pop Mart has focused its promotions on social media platforms such as Weibo, TikTok, Instagram, and Facebook.

Amidst the booming blind box industry, Pop Mart achieved sales exceeding 100 million RMB for the first time in the fiscal year ending December 2018, with ten of its IPs exceeding 100 million RMB. These included the group's SKULLPANDA and MOLLY.

The "SKULLPANDA Temperature Series," launched by Pop Mart at the end of 2022, has cumulatively sold nearly 400,000 units. This blind box series remains on Pop Mart's best-selling list, demonstrating its longevity.

Pop Mart will continue to expand its presence in Southeast Asia and will open stores in more world-renowned neighborhoods. By the end of this year, Pop Mart plans to open 25 more stores globally, bringing its estimated overseas store count to 130 to 140.

Last year, Pop Mart's store presence in East Asia, Southeast Asia, Europe, North America, and Australia was approximately 7:3. In three to four years, this ratio may reach a near-half-50 balance.

In addition to plans to open stores in Europe and the United States, such as in Milan, Italy, and near the Louvre in Paris, France, Pop Mart is also expanding into Southeast Asia, where it is expanding at its fastest pace, particularly in Thailand.

This year, Pop Mart plans to fully expand into countries such as Indonesia, Vietnam, and the Philippines. In Singapore, it will open two additional stores. Currently, Pop Mart has three stores in Singapore.

This year, Pop Mart also plans to open more flagship stores in various countries, including the United Kingdom, France, the United States, Japan, and South Korea. In the future, the public will be able to see Pop Mart stores in many world-renowned neighborhoods.

In addition to Pop Mart, another company actively developing the blind box business is Miniso. Its chief marketing officer Liu Xiaobin revealed when sharing the group's blind box business with reporters that Miniso's global blind box sales exceeded 20 million boxes last year.

Facing favorable market conditions, MINISO opened its first blind box specialty store in Indonesia at the end of last year. During the festive season, 48 MINISO stores in Indonesia broke single-day sales records, and 91 broke monthly sales records.

MINISO held a global blind box carnival in December of last year and January of this year. "On the opening day of the carnival, MINISO's blind box sales in Hangzhou, China, surged 156.6%," said Liu Xiaobin. "MINISO's blind box sales at its New York store also increased by 64% during the first week of the carnival, and blind box sales in the Indonesian market soared by a whopping 683%.

Overall, trendy toys, through the intriguing presentation format of blind boxes, have become a new form of spiritual and cultural consumer goods, satisfying the social and emotional needs of modern consumers. Zhang Jinglei explained that after a busy day, the brief seconds of opening a box offer a brief moment of relaxation and enjoyment, making it a convenient outlet for modern people to decompress and release their emotions.

In an interview, Singaporean blind box enthusiast, Xuan Weijun said, "I've loved collecting toy figures since I was a child. I think it started with McDonald's toys. In 2009, when I became fascinated with Tokidoki, Funko mystery minis, and Lego minifigures, I became deeply involved with blind boxes."

 Xuan Weijun explained that a typical blind box series contains 12 different figures, plus a "surprise Easter egg version." To collect the entire series, people can choose to buy individual blind boxes (priced between S$13.90 and S$15.90) or a large box containing all 12 blind boxes. Buying a large box might give you the full set of 12 figures, or 11 different figures plus a "surprise Easter egg."

"I love the element of surprise and excitement, especially when I open the box and get the toy figure I really want. The excitement and sense of accomplishment are indescribable. If I can open the 'surprise Easter egg' in the blind box series, it will be even more exciting!"

Not counting the models not on display, there are now 730 blind box toy models on  Xuan Weijun's display cabinet alone. She spends about 200 to 300 yuan a month on blind boxes, which is her largest monthly entertainment expense.

 Xuan Weijun said, "Blind boxes are actually a small investment." She cited the recent Crybaby x Powerpuff Girls collection launched by Pop Mart as an example, which was incredibly popular and sold out immediately. Singer Jackson Wang and Pop Mart also collaborated on a series of action figure blind boxes, which were also very popular.

She explained that the resale price of a blind box typically increases if it's sold out or discontinued. A standard blind box typically retails for 15.90 yuan, but the resale price can go up to around 20 yuan. However, if it's a "secret figure" item, the resale price can range from 90 to 150 yuan.

Nowadays, everything can be sold as a blind box, and even luxury goods are jumping on the bandwagon.

HEAT, a luxury fashion blind box retailer founded in 2019, sells luxury blind boxes on Instagram and YouTube through partnerships with over 100 luxury brands, including Givenchy, Prada, Bottega Veneta, Off-White, Balenciaga, and Palm Angels.

During its first Black Friday sales event, HEAT sold 1,000 blind boxes of luxury fashion goods in just 20 minutes. HEAT's main target audience is Generation Z.During its first Black Friday sales event, HEAT sold 1,000 blind boxes of luxury fashion goods in just 20 minutes. HEAT's main target audience is Generation Z.

HEAT's business model hasn't been rejected by luxury brands. In fact, last year, the company secured $5 million in seed funding led by LVMH Luxury Ventures, the parent company of Louis Vuitton, and Antler, a venture capital firm.

HEAT's other angel investors include the Hermès family, Stefano Rosso, a board member of OTB Group, the parent company of luxury brands like Maison Margiela and Marni, and Sven Ahrens, director of Spotify.

In its initial stages, HEAT offered blind boxes at two price points: a $400 blind box (containing two or three items, with a market value of $675) and a $675 blind box (containing two to four items, with a market value of $1,200). In 2020 and 2021 alone, HEAT sold a total of 20,000 blind boxes.

Last year, after securing investment and funding from these luxury brands, HEAT expanded its luxury product pipeline. Consequently, it launched Superbrands blind boxes, priced in the thousands of dollars. These boxes feature high-end leather goods, sought-after handbags, cashmere items, and more.

HEAT's business model also addresses a major issue for luxury brands: excess inventory of international goods. Through the blind box concept, HEAT sparks consumer curiosity and purchasing desire, bringing unsold luxury goods back into the market.