1 00:00:00,080 --> 00:00:09,959 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. I'm Caroline Hepker, and 2 00:00:10,000 --> 00:00:13,400 Speaker 1: this is Here's Why, where we take one news story 3 00:00:13,440 --> 00:00:15,760 Speaker 1: and explain it in just a few minutes with our 4 00:00:15,800 --> 00:00:17,440 Speaker 1: experts here at Bloomberg. 5 00:00:19,520 --> 00:00:22,320 Speaker 2: Things go viral on social media and they don't always 6 00:00:22,360 --> 00:00:22,880 Speaker 2: make sense. 7 00:00:23,239 --> 00:00:26,360 Speaker 1: La Boo Boo, the plush toy from China's PopMart, is 8 00:00:26,400 --> 00:00:28,680 Speaker 1: a social media darling in Hong Kong. 9 00:00:29,080 --> 00:00:31,800 Speaker 2: When you look at the investment bankers, like a lot 10 00:00:31,840 --> 00:00:34,839 Speaker 2: of the female bankers, they were wearing La Buobu key 11 00:00:34,960 --> 00:00:37,879 Speaker 2: chains along where they're working bags. We're also seeing a 12 00:00:37,920 --> 00:00:41,320 Speaker 2: lot of spending shifting towards what we call the happiness economy. 13 00:00:41,640 --> 00:00:45,600 Speaker 2: Collectibles experiences self expression. You know, adults are looking for 14 00:00:45,640 --> 00:00:48,280 Speaker 2: a little joy and they're finding it in the stuffed 15 00:00:48,360 --> 00:00:50,680 Speaker 2: animals that might cost, you know, twenty thirty dollars a pop. 16 00:00:51,280 --> 00:00:55,120 Speaker 1: The toy that's taken the world by storm, it's La Booboo, 17 00:00:55,520 --> 00:00:59,000 Speaker 1: the mischievous looking monster doll that has fueled a global 18 00:00:59,040 --> 00:01:02,880 Speaker 1: collecting create. Some are sold in mystery blind boxes, getting 19 00:01:02,920 --> 00:01:07,600 Speaker 1: buyers hooked on hunting down rare models and completing full sets. 20 00:01:08,120 --> 00:01:12,480 Speaker 1: Some additions fetch thousands of dollars on resale, and PopMart, 21 00:01:12,800 --> 00:01:15,959 Speaker 1: the Chinese maker of the toy, saw revenue jump over 22 00:01:16,080 --> 00:01:19,120 Speaker 1: two hundred percent in the first half of the year, 23 00:01:19,680 --> 00:01:23,760 Speaker 1: sending parents not unlike me, around the world hunting for 24 00:01:23,800 --> 00:01:27,720 Speaker 1: this hot toy. But there's a catch. Pop Marks stock 25 00:01:27,880 --> 00:01:32,800 Speaker 1: tumbled after a downbeat forecast, and analysts say toy crazes 26 00:01:32,959 --> 00:01:36,760 Speaker 1: usually burn out within two to three years, not unlike 27 00:01:36,920 --> 00:01:42,160 Speaker 1: beanie babies in the US three decades ago. So here's 28 00:01:42,200 --> 00:01:45,279 Speaker 1: why La Boo Boos may not be here to stay. 29 00:01:47,200 --> 00:01:50,320 Speaker 1: Our Asian Global Business Managing editor Rachel Chang joins us 30 00:01:50,360 --> 00:01:53,960 Speaker 1: Now for more on this. Rachel, what has made this 31 00:01:54,360 --> 00:01:59,160 Speaker 1: sharp toothed, fuzzy little doll a global obsession? Why do 32 00:01:59,280 --> 00:02:01,080 Speaker 1: people keep buying them? 33 00:02:02,120 --> 00:02:04,680 Speaker 2: To be honest, it's anyone's guess. I think the company 34 00:02:04,720 --> 00:02:07,400 Speaker 2: itself is a little bit mystified by it. I think 35 00:02:07,480 --> 00:02:11,960 Speaker 2: it's just some amount of nice designs, some amount of 36 00:02:12,000 --> 00:02:16,160 Speaker 2: celebrities spotting them. I think the original celebrity that really 37 00:02:16,200 --> 00:02:19,560 Speaker 2: got them big was Lisa from Black Pink. And to 38 00:02:19,600 --> 00:02:22,200 Speaker 2: be honest, it's also a huge amount of luck because 39 00:02:22,240 --> 00:02:25,520 Speaker 2: there's so many of these little toy dolls around and 40 00:02:26,240 --> 00:02:30,240 Speaker 2: La Bogus somehow have managed to hit on a particular 41 00:02:30,680 --> 00:02:34,000 Speaker 2: mix in the culture right now that's really responding to 42 00:02:34,080 --> 00:02:35,440 Speaker 2: these creatures. 43 00:02:35,960 --> 00:02:39,399 Speaker 1: How much money then is flowing into La Booboos, both 44 00:02:39,480 --> 00:02:45,160 Speaker 1: from buyers and also into the maker pop mark a huge. 45 00:02:44,919 --> 00:02:47,519 Speaker 2: Amount of money, and I think that's been quite shocking 46 00:02:47,680 --> 00:02:51,840 Speaker 2: really for the company. The original toy itself are quite affordable. 47 00:02:52,240 --> 00:02:54,639 Speaker 2: The original version is something like less than one hundred 48 00:02:54,760 --> 00:02:59,120 Speaker 2: uns or that's about fourteen US dollars each, but on 49 00:02:59,160 --> 00:03:02,200 Speaker 2: the resale map it that price has just searched to 50 00:03:02,320 --> 00:03:05,480 Speaker 2: such high amounts. You see, laboog was going for hundreds 51 00:03:05,520 --> 00:03:08,400 Speaker 2: of dollars at the time. There was a record set 52 00:03:08,480 --> 00:03:12,120 Speaker 2: for a life sized La Boogu that went at auction 53 00:03:12,400 --> 00:03:15,880 Speaker 2: for one hundred and fifty thousand US dollars. And you know, 54 00:03:15,919 --> 00:03:18,959 Speaker 2: there's such a vibrant secondary market for it as well. 55 00:03:19,000 --> 00:03:22,280 Speaker 2: You know, there's this thriving business of outfits for La 56 00:03:22,320 --> 00:03:24,760 Speaker 2: boo boos. You know, a really famous recent example was 57 00:03:24,840 --> 00:03:28,160 Speaker 2: Naomi Osaka, the tennis pro who I think she reached 58 00:03:28,160 --> 00:03:31,200 Speaker 2: the semi finals of the US Open and every match 59 00:03:31,280 --> 00:03:34,840 Speaker 2: she had a different bijeweled La Boogu in a different 60 00:03:34,880 --> 00:03:37,520 Speaker 2: tennis outfit that matched her own. And you know, these 61 00:03:37,560 --> 00:03:40,480 Speaker 2: are like a whole industry of designers and makers that 62 00:03:40,520 --> 00:03:43,280 Speaker 2: create these outfits for La Booboos, which are making a 63 00:03:43,280 --> 00:03:46,200 Speaker 2: lot of money as well. So the original company has 64 00:03:46,320 --> 00:03:50,680 Speaker 2: really ballooned into a huge consumer company, you know. And 65 00:03:50,800 --> 00:03:53,760 Speaker 2: it's peak their market cap was something like fifty billion 66 00:03:53,840 --> 00:03:57,280 Speaker 2: US dollars, which made them really the most valuable a 67 00:03:57,360 --> 00:03:59,760 Speaker 2: toy company really in the world. But that's a lot 68 00:03:59,800 --> 00:04:03,360 Speaker 2: of situations there, and I think the stock has definitely overbought, 69 00:04:03,400 --> 00:04:06,400 Speaker 2: that has come down a little bit, but certainly for 70 00:04:06,480 --> 00:04:09,760 Speaker 2: a company with only a couple of famous toys, it's 71 00:04:09,800 --> 00:04:10,680 Speaker 2: quite incredible. 72 00:04:11,200 --> 00:04:14,200 Speaker 1: Even counterfeit Laboo Boos have their own name, don't they. 73 00:04:14,240 --> 00:04:18,560 Speaker 1: Fakes are called Lafufus. What do analysts then say about 74 00:04:18,720 --> 00:04:20,600 Speaker 1: similar toy frenzies? 75 00:04:21,839 --> 00:04:26,680 Speaker 2: So the Laboogoo frenzy has definitely spread to other similar toys. 76 00:04:26,720 --> 00:04:30,800 Speaker 2: So Potmat itself is launching a lot of other toy 77 00:04:30,920 --> 00:04:34,279 Speaker 2: rangers and hoping that some of that demand carries through 78 00:04:34,320 --> 00:04:37,080 Speaker 2: to their other toys. We also did quite a nice 79 00:04:37,080 --> 00:04:41,839 Speaker 2: story around a Japanese monkey like creature similar to La 80 00:04:41,960 --> 00:04:45,320 Speaker 2: Boogles called one Chi Cheese. So Lisa from Black Pink 81 00:04:45,360 --> 00:04:47,440 Speaker 2: has been spotted wearing One che Cheese as well. It 82 00:04:47,440 --> 00:04:49,680 Speaker 2: has been spotted shopping in a mon Chichi shop, and 83 00:04:50,120 --> 00:04:52,599 Speaker 2: that company, the Japanese company behind One Che Cheese, which 84 00:04:52,640 --> 00:04:55,480 Speaker 2: is like a twenty year old toy, has also seen 85 00:04:55,720 --> 00:04:58,559 Speaker 2: a huge growth and demand and much more visibility thanks 86 00:04:58,560 --> 00:05:02,960 Speaker 2: to the Labugu. So it does seem as if the 87 00:05:03,040 --> 00:05:06,359 Speaker 2: laboos are ushering a wave of demand for you know, 88 00:05:06,480 --> 00:05:11,360 Speaker 2: particular animal looking toys that can essentially be attached the 89 00:05:11,400 --> 00:05:15,839 Speaker 2: accessories of bags. There's almost really a conspicuous consumption sort 90 00:05:15,839 --> 00:05:16,320 Speaker 2: of item. 91 00:05:17,360 --> 00:05:21,640 Speaker 1: So is Pop Marked's success sustainable. I've heard the idea 92 00:05:21,800 --> 00:05:26,080 Speaker 1: maybe of building out its intellectual property going further. 93 00:05:27,000 --> 00:05:29,640 Speaker 2: I think that is really the question that is on 94 00:05:29,680 --> 00:05:32,840 Speaker 2: everyone's mind right now. And the company, from talking to them, 95 00:05:33,120 --> 00:05:36,400 Speaker 2: are well aware of this issue because you know, they're 96 00:05:36,480 --> 00:05:39,400 Speaker 2: they're coming onto the scene just really with a toy, right. 97 00:05:39,440 --> 00:05:42,640 Speaker 2: It's not there's no ip attached to it. It's not 98 00:05:42,680 --> 00:05:45,400 Speaker 2: like it's not like Disney, where you know there are movies, 99 00:05:45,480 --> 00:05:49,240 Speaker 2: their narratives, their stories and theme parks. This is just 100 00:05:49,279 --> 00:05:52,480 Speaker 2: a toy. Nobody knows the backstory, nobody knows the characters. 101 00:05:52,880 --> 00:05:56,159 Speaker 2: I think there has been some concern recently that, you know, 102 00:05:56,200 --> 00:05:58,280 Speaker 2: with the release of the new mini La Boo Boo 103 00:05:58,480 --> 00:06:02,240 Speaker 2: and a restocking of supply available, the prices in the 104 00:06:02,279 --> 00:06:04,880 Speaker 2: resale market have dropped quite a bit as well. It 105 00:06:04,920 --> 00:06:07,760 Speaker 2: does feel as if the peak of the frenzy has passed, 106 00:06:08,040 --> 00:06:11,599 Speaker 2: and we do see those sorts of surges and declients 107 00:06:11,680 --> 00:06:14,800 Speaker 2: quite often with some of these consumer goods, right for example, 108 00:06:15,000 --> 00:06:17,839 Speaker 2: limited edition sneakers, you know, those used to be so expensive. 109 00:06:17,920 --> 00:06:20,840 Speaker 2: Now the prices come back down. So for pop Back 110 00:06:20,880 --> 00:06:24,520 Speaker 2: now it really is about how do they extend this 111 00:06:24,720 --> 00:06:28,839 Speaker 2: moment into a real business story, And they have talked 112 00:06:28,839 --> 00:06:32,359 Speaker 2: about taking it slow and developing IP and working on 113 00:06:32,440 --> 00:06:34,520 Speaker 2: theme packs, and they do have a lot of ideas, 114 00:06:34,560 --> 00:06:36,840 Speaker 2: but there is a big question around whether or not 115 00:06:36,920 --> 00:06:38,880 Speaker 2: this moment will continue. 116 00:06:39,480 --> 00:06:42,960 Speaker 1: Are their clues suggesting the hype may already be fading 117 00:06:43,080 --> 00:06:43,960 Speaker 1: or cooling off? 118 00:06:45,080 --> 00:06:47,479 Speaker 2: There definitely are so with the launch of the Mini 119 00:06:47,560 --> 00:06:50,159 Speaker 2: La Boo Boos, which I think was last month, after 120 00:06:50,200 --> 00:06:53,960 Speaker 2: that initial search of demand around it and resale prices 121 00:06:54,000 --> 00:06:56,760 Speaker 2: for the Boo Boos have come down at least about 122 00:06:56,760 --> 00:06:59,880 Speaker 2: twenty to thirty percent. And it does seem like in 123 00:07:00,080 --> 00:07:02,640 Speaker 2: the culture, you know, as I mentioned Lisa from Blackpain, 124 00:07:02,760 --> 00:07:06,360 Speaker 2: different celebrities. They're now being spotted with other sorts of toys, right, 125 00:07:06,440 --> 00:07:08,920 Speaker 2: not just so, it does feel as if the peak 126 00:07:09,240 --> 00:07:11,840 Speaker 2: is passing, and you know, a lot of people are 127 00:07:11,920 --> 00:07:15,440 Speaker 2: drawing comparisons, for example, the Benie Baby toys, which were 128 00:07:15,680 --> 00:07:18,040 Speaker 2: crazy in the US about three decades ago in the 129 00:07:18,120 --> 00:07:21,960 Speaker 2: nineteen nineties. At that time, we saw resale prices, parents 130 00:07:22,000 --> 00:07:24,800 Speaker 2: really going crazy trying to get these toys for their kids. 131 00:07:25,120 --> 00:07:28,239 Speaker 2: We saw resale prices really search of these Benie Baby 132 00:07:28,240 --> 00:07:32,960 Speaker 2: toys before pretty much fading within about four years. We're 133 00:07:33,000 --> 00:07:34,880 Speaker 2: not really sure what the future level WOO is, but 134 00:07:34,920 --> 00:07:38,000 Speaker 2: definitely there are signs that that's fading now. The question 135 00:07:38,120 --> 00:07:41,160 Speaker 2: is can they become one of those toys that essentially 136 00:07:41,160 --> 00:07:44,640 Speaker 2: can keep going for example Barbie dolls right or even 137 00:07:44,920 --> 00:07:48,760 Speaker 2: IP connected toys like Star Wars figurines where the demand 138 00:07:48,840 --> 00:07:49,840 Speaker 2: can just keep going. 139 00:07:50,640 --> 00:07:54,720 Speaker 1: Rachel Chang, our Asia Global Business Managing Editor. Thank you 140 00:07:55,280 --> 00:07:58,160 Speaker 1: for more explanations like this from our team of three 141 00:07:58,200 --> 00:08:00,880 Speaker 1: thousand journalists and analysts around the world. World go to 142 00:08:00,920 --> 00:08:06,960 Speaker 1: Bloomberg dot com slash explainers. I'm Caroline Hepgar. This is 143 00:08:07,080 --> 00:08:10,200 Speaker 1: here's why we'll be back next week with more thanks 144 00:08:10,200 --> 00:08:10,760 Speaker 1: for listening.