Data company Market Decipher says the booming growth of the toy collectables market is attributable to it offering a better return than gold, art, and financial securities. Certain collectable toys have a high rate of return, which has attracted a lot of investors to this market.  A burgeoning resale market has developed online as collectors trade pieces to build full collections, with rarer items selling for up to 40 times their original price. According to Global Times, during the pandemic, Japanese collectible toy brand Bearbrick saw prices surging from a few thousand RMB per unit to as much as hundreds of thousands due to the logistics disruption.  Competition ramps up One of the world’s largest retailers of collectable toys, Pop Mart, has rapidly accelerated its expansion plan outside of China during the past year, launching its first stores in the US, New Zealand, and Europe.  Despite being the leading collectable toy retailer in China, Pop Mart is not the only major player in the burgeoning market. Rivals are turning up the heat. Multi-brand beauty retailer The Colorist’s owner, KK Group, joined the toy market in 2020 with a private brand dubbed X11, opening the first store in Shanghai and two other flagship stores in less than a year.  X11 Shanghai flagship facade Last year, the company opened a five-storey global flagship store in Shanghai, which it described as China’s largest collectible toy store yet, housing a diverse range of product categories. A 100m-long queue of customers formed outside the door prior to opening.  Despite being reasonably new to the market, X11 quickly captured its young customers and distinguished itself from other players through innovative promotions and store designs that embrace futuristic themes and traditional architecture.  Earlier this year, another collectible toy brand called 52Toys closed a Series C financing round, raising US$62.8 million. The company says it will deploy the funds in expanding its IP design capabilities, research and development, and supply chain access, as it aims to become a big player in the collectible toys industry. 52Toys plans to roll out 100 stores by the end of next year to further secure its position in the competitive market – a 10-fold increase on its current network.   Discount variety retailer Miniso has created a sub-brand called Top Toy, joining the sector two years ago. About 70 per cent of Top Toy’s products are based on famous anime characters, while the balance are its own characters or collaborations. The company has struck partnership agreements with more than 200 brands to capture the second tier of the art toy segment.  Other growing Chinese collectible toy brands include Alpha Group and IPStation.  X11 store with traditional design Eyes on other Asian markets On top of the heated competition, companies are facing disruption from China’s crippling zero-Covid policy which has resulted in the government imposing multiple lockdowns since the beginning of this year.  Pop Mart has been struggling in its home market during the past few months as lockdowns forced it to close some of its offline stores and online orders were impacted by the suspension of delivery services. This month, its stock price hit a record low, more than 70 per cent below its value in December 2020 when it made its IPO debut, at that time reaching a market value of US$7 billion.  While Pop Mart’s home market prospects are somewhat gloomy so long as Covid restrictions endure, there is room for expansion in other markets where collecting toys is starting to gain popularity among millennials and Gen Z, yet there are few retail platforms for their sale.  A report dubbed ‘2021 China Collectible Toy Industry Market Insight’ by Analysys concluded that the current trend in China is now at a similar point to the US and Japan markets several decades ago, citing similar per capita GDP growth rates; the higher the GDP, the higher collectors’ consumption.  When the US and Japan’s per capita GDP exceed US$10,000 in 1978 and 1908s, the collectable toy market in both countries experienced a boom and has become increasingly lucrative ever since. The report projects the Chinese collectable toy market will likely enter an “explosive phase” since the per capita GDP in China surpassed $10,000 in 2019. In response to the changing market landscape, Pop Mart has rapidly increased its footprint outside China. Following forays into the US, UK, Japan and New Zealand, the company last month opened its first global flagship store in South Korea, followed by another in the bustling Tokyo district of Harajuku. Justin Moon, VP of Pop Mart and president of Pop Mart International, told Inside Retail Asia earlier this year the company is now looking into opportunities to expand into Southeast Asia, in particular in Vietnam and the Philippines.  “Many companies often measure the success of their overseas businesses by the growth in sales or sales figures,” he said. “However, we think there are more important factors in doing business overseas than simply increasing the sales volume. “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.” The metaverse’s future influence The report also noted the role that the rise of the metaverse and digital fashion will play as a key driver of growth in the collectible toys industry.  Jack Aw, the owner of a multi-million dollar Singapore-based toy company producing collectible toys, Mighty Jaxx, has recently incorporated blockchain technology into his products. Aw said in an interview with CNBC that through blockchain, the platform provides and validates tamperproof certificates for every product. He also noted that providing both digital and physical assets will generate higher value for a product.  Aw said the company plans to expand its IP collaborations into the metaverse as well. Earlier this year, the company secured $220 million in its Series A+ funding, which increased Mighty Jaxx’s valuation to more than $200 million.  Such influence from the metaverse – combined with the rising income of Asia’s middle class and an increasing array of brands and retailers in the toy space – looks set to ensure this collectibles boom is anything but a short-term fad.