From content to consumption, the logic of IP co-branding has completely changed

In the current consumer market, IP co-branding has become an important means for brands to attract consumers. However, as consumers' preferences for IPs change and media channels diversify, the logic of IP co-branding is also undergoing a profound transformation. This article will explore the new trend of IP co-branding and analyze how brands can adapt to this change through more acute IP recognition capabilities and more flexible response mechanisms.

"The biggest beneficiary of the launch of Black Myth Wukong is Luckin Coffee." Although it was just a joke, the hot sales of Luckin Coffee's Black Myth co-branded products also indirectly reflects the importance of IP in current consumption.

The current consumer environment is moving towards the stock market, interest consumption and emotional consumption are gradually becoming the core driving force of consumption, and consumption + IP is becoming more and more the standard. In every link of the consumption logic, the influence of IP is deepening.

However, users' preferences for IPs are changing. With the diversification of media channels, there are more and more small IPs from various sources and circle culture IPs, and IPs that are shorter, more direct and emotional have become the new preference. For example, the butter bear, line dog, and chiikawa that must exist in your newly saved emoji package may have few people knowing their story backgrounds, but they have quickly become popular with their simple and straightforward emotional references.

The co-branded product Siam Lip launched by X11 in the first half of the year is an IP that started as an emoticon package

In this circle-based and fragmented content environment, the life cycle of IP has become shorter and the replacement speed of popular IPs has significantly accelerated.

IP is an important upstream element that gathers traffic and adds value to products. For downstream consumer goods, this trend of change has led to the previous "spokesperson" model no longer being a universal model, and it is necessary to attract consumers' continued attention through high-frequency iterations of popular IPs. This forces brands to have more acute IP recognition capabilities and more flexible response mechanisms.

For this reason, more and more companies have introduced the role of "IP buyer" into their business chain to search for potential IPs across borders and platforms.

The impact of changes in upstream IP on downstream consumer goods is multi-dimensional. The correlation between consumer goods and IP is divided into three levels from close to loose: direct derivatives, IP-enabled products, and marketing co-branded products. Direct derivatives include trendy toys and peripheral products; IP-enabled products give new value to products with certain functionality through IP, the most typical representative of which is MINISO; and the brand that does well in marketing co-branding is Luckin Coffee, and IP is mainly used to increase the exposure of a certain product or product line. Regardless of the level, IP changes will affect how it operates.

We believe that compared to the empowerment of IP to consumer products and the harvesting of IP traffic, direct derivatives that are closer to IP are most sensitive to changes in IP trends, and IP also has the most direct impact on its product sales. Therefore, we focus on the industry trends of IP in the trendy toy market from exploration, product production to sales and operation to understand the changing direction of the IP market.

1. Channel exit, IP product development

The trendy toy market has undergone a phased change from the breakthrough stage to the mature stage. Since 2018, the trendy toy market has expanded rapidly. Industry players have mainly achieved breakthroughs by creating popular and popular super categories, and quickly boosted sales. For example, blind boxes are a super category that led to the breakthrough of trendy toys a few years ago.

During the past few years, trendy toy collection stores such as Pop Mart, X11, and Trendy Toy Planet have attached great importance to opening flagship stores and other large stores, combining super categories with multiple popular IPs to achieve a traffic aggregation effect.

X11 (left) and Pop Mart (right) flagship stores

However, as the market gradually matures, the current trendy toy industry has entered a relatively stable stock market. As the stage of the industry changes, the channel strategy has also changed. Relying solely on high-profile flagship stores, popular IPs, homogeneous explosive product strategies and category strategies (such as blind boxes) is no longer sufficient to continuously attract user traffic.

In the stock market, channel operators need to use refined operations to capture more dispersed traffic. The trendy toy circle itself presents a highly vertical feature. From the perspective of IP, there are IPs with strong artistic qualities; IPs related to animation and film and television, which can be divided into Japanese, American, and ancient styles; and more popular light IPs such as LOOPY, chiikawa, etc. From the perspective of product form, there are "plastic man" model production with a higher threshold; there are also products with low audience thresholds such as plush and blind boxes. From the perspective of price, it ranges from affordable "Baji" badges and card packs to collectible figures worth tens of thousands of yuan. The audiences of each trendy toy circle vary greatly.

This is also the reason why pop-up stores are now very important. Compared with flagship stores with higher investment costs, pop-up stores can focus IP potential, sales capabilities, and crowd flow on one point, and stimulate "small" groups of people flexibly, frequently, and repeatedly. This summer, Jing'an Joy City held as many as eight pop-up stores at the same time, and "only top IPs can enter."

However, if channels want to carry out refined operations, they have higher requirements for the richness and differentiation of supply. For channels, it is difficult to achieve the richness and differentiation of supply under the previous purchasing mechanism that intervened from the product link. For those popular big IP derivatives, various competing channels will purchase and put them on the shelves, making it difficult to have exclusive competitiveness. Although small IPs are unique and targeted, their dispersion and instability make it difficult to form economies of scale. In addition, the overall market demand for product diversity and stability is getting higher and higher, and the supply problem has become the top problem that trendy play channels need to solve today.

The rise and fall of Guzidian is an example of insufficient continuous high-quality supply in the channel. Guzidian's IP and product categories are highly homogeneous, mainly focusing on several popular Japanese comics, two-dimensional games, and otome games in recent years. The categories are also mainly badges, card sets, comics and other products with low barriers to entry. This is because Guzidian mainly relies on purchasing from suppliers, and suppliers lack the motivation and ability to develop new IPs and new categories.

In this regard, trendy toy channels must be more deeply involved in the IP chain, and firmly grasp the ability to explore differentiated IPs and develop differentiated products. Among them, the core path for brands such as Pop Mart to deeply intervene in IP is to incubate their own IP.

Another way to deeply involve IP is that more and more trendy toy stores are personally involved and become "IP buyers". They not only act as sales terminals for IP products, but also intervene in IP procurement, product development, and online operations.

For example, many popular IPs such as Pingu, Line Puppy, Siamese Lip, Pink Rabbit, etc. were purchased by X11, a trendy toy collection brand under KK Group, in the form of "IP buyer" that deeply intervenes in the IP chain, develops products, and becomes popular through operations; in addition, trendy toy collection store brands such as 52toys and TOPTOY have also increased the depth of their involvement in the IP chain.

Incubating one's own IP and purchasing IP and deeply intervening in its development and operation have become two effective paths for IP development.

2. How to obtain valuable IP

In order to acquire valuable IP, we must also face up to a complex reality: with the fragmentation and circle-based evolution of the media environment, the IP landscape has also changed.

Big IPs that can influence mass society still exist, but their number is decreasing. This is because mass media are diverse and scattered, and people are more selective. The discussion and attention aroused by popular TV series and animations 20 years ago were universal. Today, even the hottest dramas are difficult to truly break through the circle.

The number of small IPs is increasing, but their sources and media are very scattered and diversified. This is because IPs that are shorter, more direct and emotional are easier to spread on social media, so the background of the characters and the plot are not so needed, which to a certain extent eliminates the barriers caused by culture and language. For example, the butter bear, the line dog and chiikawa that must exist in your newly saved emoji package may have few people knowing their original stories, but they quickly became popular with their simple and straightforward emotional references.

MINISO's chiikawa co-branded products

The changes in the IP landscape have also led to some new preferences in IP buyers' strategies for grabbing IPs. In terms of IP selection, IPs with obvious differentiation and scarcity are more valued. Among them, exclusive IPs have the highest priority.

However, for popular big IPs, the IP owners will not only give exclusive copyrights to the top channel dealers at certain stages, but also usually open the copyrights to multiple companies at the same time. For example, IPs such as Disney, Sanrio, and Doraemon already have various forms of products for sale in various channels on the market, making it difficult to differentiate themselves.

The limited number of large IPs is highly homogenized, while small IPs in different circles have become the source of channel differentiation and the focus of IP buyers. By using small IPs to capture the core population of each circle, the channel mindset is gradually expanded outward, and flash mobs and other operational activities are used to attract a larger population.

For this reason, IPs with high recognition and identification among certain groups of people are valued. For example, Pingu, the penguin IP developed by X11, is highly recognized overseas. Its target audience is young white-collar workers who have studied abroad, are over 20 years old, have a sense of the Internet and like to surf the Internet, which is the same as the target audience of high-quality trendy toys that X11 is targeting.

Therefore, based on these user tags, relevant products can be accurately developed and promoted to penetrate this circle. The plush blind box developed by Pingu was quickly sold out on the first day of the X11 Tmall flagship store, and ranked among the top 3 in the Tmall hot-selling list category, with cumulative sales of over 200,000 boxes.

The life cycle of IP is also a core consideration in selecting IP. Different IPs have different life cycles. Platform-based IPs have the longest life cycle, such as Lego; art collection IPs are second. Among the more popular IPs, generally speaking, except for a few masterpieces, the life cycle of comics and film and television IPs is relatively short, which is greatly affected by the update speed and popularity of the series itself; and image-based IPs are easier to stimulate IP vitality than film and television comics.

Therefore, there are many image-based IPs among the popular IPs in recent years, such as Butter Bear, Chiikawa, Loopy, Pingu, etc. You may have used Pingu's emoticons, but you probably haven't seen Pingu's original Swiss clay animation. Pingu's IP potential is that brand developers, operators, and users spontaneously give emotional meaning to this little penguin image.

From the perspective of IP source regions, at present, the top domestic IPs have been almost completely divided up, and more and more copyright operation companies have begun to search for potential IPs across borders, platforms, and media. For example, Thailand and South Korea are the markets that domestic practitioners pay the most attention to, as they have a more mature IP creation ecosystem and are also home to a large number of very capable creators and designers.

Because the competition for IPs is becoming increasingly fierce, IP copyright holders are placing higher and higher demands on IP buyers.

Among them, channel value and operational value have become the IP buyer's ability that IP copyright holders value, and have also become the core competitiveness of whether or not to acquire IP. Retail companies with stronger channel capabilities and offline chain stores can roll out IP products in the first place, boost IP popularity, and support various focused IP operation activities.

Take pop-up stores as an example. Unlike a collection store that covers various IPs, a pop-up store can focus on a single IP and launch more peripheral categories around this IP. For example, in the recent pop-up event that X11 cooperated with the strategy RPG game "Back to the Future: 1999", the surplus goods in the pop-up store can be returned to various stores, thereby reducing product loss.

3. How to “not consume” IP and make it more vital

For trendy toy stores, choosing and acquiring IPs with the potential to become a hit is only the first step. The success of an IP increasingly tests a series of capabilities, from product development to channel operations (including offline flash sales, online promotion and user interaction).

In terms of product development, high-quality products can stimulate new purchasing needs, and the uniqueness and innovation of products are the key to attracting users. As mentioned above, it is often difficult for a collection store brand to have an exclusive hit IP, but as a collection store, it must cover the periphery of the hit IP. Therefore, when faced with some hit IPs that must be involved, industry players need to seek differentiation in product development.

For example, the line puppy blind box developed by X11 is a differentiated product with a certain manufacturing threshold, which is a mainstream product in the market, namely acrylic stand with low cost and simple production. The development cost of blind boxes is high, and it is difficult for studios or small channels to participate. Only channels such as X11, which have both supply chain and sales capabilities, can produce such threshold products.

In addition, some clever design ideas can also enhance the charm of an IP. For example, among the small animals in the Siam Lip IP, there is a beagle puppy. When X11 launched the regular badge category, it added two small light bulbs to the beagle puppy's eyes, making it a "electric eye puppy" and differentiating it from the regular category.

Siamese Lippu puppy with electric eyes

It is worth noting that the development pace of IP peripheral products in trendy toy collection stores is different from that in fast-moving consumer goods stores.

Under the logic of fast-moving consumer goods, the number and breadth of product development and the speed of IP iteration are faster. This is because the primary purpose of fast-moving consumer goods brands is to sell products. They need to seize the most popular period of IP and quickly reflect the IP potential on the products. In terms of specific operations, the IP is widely used in various products and sold in batches.

For example, MINISO’s Barbie series took full advantage of the popularity of the Barbie IP during and after the release of the Barbie movie, and opened many Barbie theme stores. Afterwards, MINISO continued to hit LOOPY, Chiikawa and other IPs that were more popular than Barbie.

But the downside is that IP, as a consumer product with strong spiritual attributes, needs to follow the principles of scarcity and finiteness. The more popular and large-scale the channel, the greater the consumption of the IP life cycle.

Unlike fast-moving consumer goods, the pace of product development for trendy toys is relatively restrained. The essence of trendy toys is IP, so industry players tend to build IP in the form of super single products to extend the life cycle of a single IP as much as possible.

Pop Mart’s creation of Mega Space Molly follows the idea of ​​a super single product.

More importantly, as a non-essential consumable, the most taboo thing for trendy toys is oversupply. It is necessary to adopt a product strategy of fewer but better products to create product differentiation while controlling the balance of supply and demand as much as possible. This especially tests the industry players' precise control of the target users' demand preferences, so as to control the supply and demand relationship.

Among them, diversified channel operation is one of the key factors in IP supply and demand control. For example, before product development, trendy toy stores can screen out accurate hot products through pop-up stores, online testing, etc., and then mass-produce and release them to national channels.

For example, X11 launched the "X11's 1001 IP Sharing" on Xiaohongshu, in which it listed many dog ​​IPs, rabbit IPs, and cat IPs, including those that have been developed and those that have not been developed. The next IP with the potential to become a hit can be selected based on the enthusiasm of user feedback in the comments.

IP Insights in Column Operation

In addition to products, content operations based on community discussions, which give IPs unique personality and emotional labels, have also become very important. For example, the image conveyed by the butter bear is naughty and "naughty", while the emotions of the striped dog are healing, happy, and sunny. The operators promote the further widespread dissemination of these IP images on social platforms through online secondary creations such as emoticons, short videos, and memes around the IP, and drive the emotional resonance of users, thereby amplifying the influence of the IP.

At the same time, combining carefully planned products with continuous content operations can inject new vitality into IP and extend the life cycle of IP. For example, traditional IP development usually just prints patterns on clothes and cups, and such peripherals are more of a consumption for IP. Today's trendy toy products create more dissemination scenarios and sharing opportunities through unique shapes and interactivity, allowing IP to maintain long-term appeal among users.

For example, X11's Pingu plush series and blind box series have launched many original actions and expressions that make today's young people feel more involved. Through active operations and spontaneous secondary creation by users, photos of these plush blind box products have become new materials for emoticon packages.

Pingu emoticon package

Because of this, even many large traditional brands such as IKEA and McDonald's have strengthened their operations on content platforms, especially the cultivation of UGC content.

The trendy toy collection stores discussed in this article create IPs. On the one hand, they need to create IPs themselves, and on the other hand, they have stronger channel capabilities, which they can use as an advantage to enter IP negotiations and product development.

As more and more players in various aspects of consumption participate in the entire IP war with their respective advantages, the competition will lie in how to create a deep emotional resonance between IP and consumers.