From a single shop in a mall in Beijing’s Haidian district to a group with 114 outlets and 825 vending machines across China, it took Pop Mart just a decade to become the biggest toy enterprise in the country. Recalling the company’s humble origins, Pop Mart design director Xuan Yilang, who joined two years after it was founded in 2010, says there were only about seven employees in the beginning. “Two of them went around China looking for interesting products, like phone cases and cups, to sell in the shop,” he says. “In 2012, one more shop opened. We didn’t design toys then. The two shops sold various kinds of bric-a-brac, like T-shirts and power banks with my drawings printed on them.” The breakthrough came in 2014 when the company started selling cherubic baby doll figurines from the Japanese series Sonny Angel. “We became their biggest distributor in China,” Xuan says. “In 2015, the products accounted for up to 40 per cent of our total sales. So we decided to cut out all the miscellaneous stuff and started looking for designer products like Sonny Angel.” Molly, designed by Hong Kong artist Kenny Wong, was the Midas touch for Pop Mart. Created in 2006, the doll, a little girl with upturned lips, blue eyes and an attitude, had initially generated lacklustre sales in Hong Kong. Blind boxes spawn multimillion dollar wealth, drawing calls for curbs In 2016, Wong signed an exclusive licensing agreement with Pop Mart, which developed a blind-box series containing various versions of Molly – with no indication on the box which version was inside. Sales exploded, and in 2019 Molly sales totalled 456 million yuan (nearly US$70 million), or 27 per cent of Pop Mart’s sales. Collaborations with other Hong Kong designers followed. Among them were Lung Kasing, whose Labubu is a mischievous-looking forest monster, and illustrator Pucky, who came up with a series of pastel-coloured baby sprites named after the designer. Pucky racked up 315 million yuan (US$48 million) in sales in 2019, accounting for 19 per cent of Pop Mart’s overall sales. There are now 85 brands in Pop Mart’s toy stable, 12 of them original designs. The company has also struck licensing deals with international toymakers including Disney, Bandai and Universal, turning their classic brands into toys for sale in China. Made of plastic, the small figurines are sold in blind boxes for over 50 yuan (US$7.60) apiece. Xuan describes the boxes as a more refined version of the egg-shaped capsule toys that have been around for decades. “Capsule toys are usually sold in convenience stores where people don’t bother to keep the change in coins after a purchase and use them to buy the toys,” he says. “But the consumer experience is not that good because the toys don’t come with much design. Our well-designed blind boxes keep the element of randomness and are sold in glossy shops in nice shopping malls. Our shops are designed by a Korean design firm.” This formula of selling figurines in blind boxes in modern shops located in new malls helped Pop Mart become the biggest toy enterprise in China. The country’s designer toy market stood at 20.7 billion yuan in 2019, with an average annual growth rate of 35 per cent, and is expected to reach 76 billion yuan in 2024, according to consulting company Frost & Sullivan. Pop Mart enjoys an 8.5 per cent market share in China’s designer toy market, bigger than that of any other company. Pop Mart’s net profit of 451 million yuan (US$69 million) last year represented a fourfold increase on its 2018 net profit. In the November, 11, 2019 Singles’ Day shopping festival on e-commerce platform Tmall, owned by Alibaba (which also owns the South China Morning Post ), Pop Mart sold two million toys, worth 82 million yuan, eclipsing Lego and Bandai for the first time in Tmall’s history. Shares of the designer toymaker more than doubled on their trading debut on the Hong Kong stock exchange on December 11 this year, after the company raised HK$5.2 billion (US$674 million) in an initial public offering . In April, Wang Ning, Pop Mart’s 33-year-old founder and chief executive, made the list of Fortune China’s top 40 entrepreneurs under the age of 40, alongside Zhang Yiming, founder of TikTok owner ByteDance, and Will Cheng Wei, founder and CEO of ride-hailing platform Didi. A designer first turns his ideas into a 2D draught. We then turn the 2D draught into a 3D figure for mould-making by 3D printers. The toys have intricate details that are too complicated to be handled by machines. So workers manually finish making them Xuan Yilang, Pop Mart’s design director A graduate in visual communication from Zhengzhou University, Xuan says his inspiration for designer toys came from Hong Kong artists. “There was an explosion of designer toys made by Hong Kong artists around 2006,” he says. “For a brand to be successful, it has to make an instant impression and resonate with people emotionally. “Like Molly: she has a distinct personality and reminds people of their kids, or the stubborn side of their own personality. Labubu reminds people of their childhood innocence. My design, Yuki, is a soft-looking figure hiding under a bedsheet. I want to show that people might sport a ferocious-looking exterior or force themselves to be strong on the outside, but they actually have a soft inner side.” Pop Mart has about 2,500 employees in China. Xuan now heads a team of over 130, including designers, quality controllers, merchandisers and logistics chain managers. “Among our designers, some were previously 3D video game developers and animators,” he says. “Most of them were born after 1990.” To train more toy designers domestically, the company collaborated with Disney in 2019 on a toy design competition. That year, Pop Mart also jointly organised a course on designer toys at the Central Academy of Fine Arts in Beijing. The enterprise also holds annual toy shows in Shanghai and Beijing. Basic production is outsourced to factories in Dongguan and Shenzhen in southern China, but Xuan says the final touches to each piece are done by hand. “A designer first turns his ideas into a 2D draught,” he says. “We then turn the 2D draught into a 3D figure for mould-making by 3D printers. The toys have intricate details that are too complicated to be handled by machines. So workers manually finish making them.” They hand-paint details on toys, assemble some components and package the finished product. While creators of the world’s most popular toys, including Disney characters and Bandai robots, produce movies and TV series, and build amusement parks to sustain the public’s interest in their toys, Pop Mart’s popular characters are yet to be backed by such resources. They might be in the future, however, given the company’s successful stock market listing. Wang told the media platform 36Kr last year that Pop Mart had the lofty goal of becoming the company most resembling Disney within five years. “We have produced some short videos and animations for Douyin,” he said, referring to China’s version of TikTok. “We are still thinking about whether Labubu will be turned into a movie. Miniature theme parks and toy museums are also under consideration.” More collaborations with fashionable brands outside the toy industry are also planned. There have already been joint promotions with Casio’s Baby G watches, YSL perfumes and Starbucks Coffee. “For the YSL perfumes, we made a series of Molly in the shape of an astronaut,” Xuan says. “Such products are not so much simple toys as collectibles.” In spite of its runaway success, Pop Mart’s sales are mostly confined to the domestic market, with the global toy industry dominated by Japanese and American players such as Mattel, Sanrio and Disney. Still, Xuan is convinced that Pop Mart’s large sales figures will attract more talent to join the toymaking industry. “Even now, the China market for children’s toys still mostly trades on imports from overseas because the domestic industry is not mature,” he says. “But our products are unique designer toys aimed at young people and adults. They have become a trend and a part of popular culture.”