Invest?!

Zhou Fangyuan pondered this question in his heart.

But for a while, to be honest, the idea came a little suddenly, and of course he couldn't have made up his mind like that.

What's more, investing in the field of toys is actually not a very good choice.

Because before Zhou Fangyuan's rebirth, there had just been a major earthquake in the toy field, and this earthquake affected almost all high-end toy manufacturers in the world - Toys "R"Us went bankrupt!

There were not many reports about this at the time. Toys"R"Us is losing its appeal in terms of convenience and affordability, while too many brick-and-mortar stores and debt-ridden problems are contributing to the collapse of the big toymaker's internet age. Toys"R"Us has symbolized childhood for 69 years, and like countless children, it has finally ushered in the troubles of growing up.

Just before Zhou Fangyuan's rebirth, not long after, news came from the Internet, saying that the famous Toys "R" Us officially filed for bankruptcy protection, which is also the largest bankruptcy case of a specialty store-style retailer in history. Traditional brands are in decline, and the prophecy of a "retail collapse" seems to be coming true. Of course, the reaction of domestic netizens is average, after all, the operation of this brand in China is not good, and not many people know it, but judging from the reaction of foreign netizens, many consumers still miss the good memories that this toy giant once brought, and the news of bankruptcy protection has made many people spontaneously mourn on the Internet.

Toys"R"Us announced the liquidation of the company's assets in the United States and the closure of all operations in the United States.

The most direct impact of this is that the performance of large toy companies such as Lego, Hasbro, and Mattel has declined to varying degrees. Among them, Hasbro's full-year net income in 2018 fell by 12%, and Lego's full-year revenue in 2018 increased compared with 2017, but it did not return to the level of 2016.

In fact, behind this impact is actually a change in the way children are entertained.

Toy companies such as Lego, Hasbro, and Mattel are mainly consumers of children, but with the popularity of mobile Internet devices such as smartphones, it is difficult for traditional toys to attract the attention of most children.

It is not only reflected in you and me, but also in China, this problem has long been a global problem. Market research agency Statista has released a data, data shows that the penetration rate of mobile phones and tablets and other devices among minors in the UK continues to increase with age, and the penetration rate of smartphones among 10-year-old children is close to 50%.

When children in the UK reach the age of 15, they basically have a smartphone.

And it's still a long time for minors to spend on their phones.

According to The Telegraph, children under the age of 14 now spend up to 3 hours and 18 minutes a day on their smartphones, with a total of 23 hours a week.

Prior to the collapse of Toys"R"Us market, NPD surveyed the sales of different toy categories and found that the sales of game/puzzle toys represented by Magic had the highest growth and the sales of assembly toys represented by Lego had the most severe decline. To some extent, this also reflects the changing tastes of toy consumers. Play/puzzle toys are more interactive, while assembly toys take a long time. This shows that today's consumers are looking for interactive toys and are becoming impatient.

In fact, it is the manifestation of fast food!

As mentioned above, the fast-food of online games is not limited to online games.

In the face of such a crisis, other toy companies have launched new toys to adapt to trends, such as Hasbro has stepped up its development of Magic and Monopoly, Mattel's "Mattel Games" brand is also launching interactive sex toys that are more suitable for parties, and Fanko, a trendy toy company, has also acquired a board game company this year in an attempt to enter this market. On the other hand, they are also actively transforming, launching games and content products with their own IP. Lego is no exception, actively transforming in this direction, but judging from the results before Zhou Fangyuan's rebirth, the effect is actually not good.

Lego is not quite the same as other toy companies, they created the category of "Lego bricks", and they only make "Lego bricks".

This makes it difficult for LEGO to achieve a breakthrough in the category because it has no experience in making other toys such as board games. But it is precisely because they have been focusing on the building block toy market for a long time that Lego has become synonymous with this type of product, and the image of the building block villain has been deeply rooted in the hearts of the people, which has become their advantage in creating their own IP.

However, in the annual report released by Lego in 2018, they did not get much income from IP licensing, only 530 million yuan, and the toy sales revenue that year reached 37.67 billion yuan, almost 72 times the revenue of IP licensing, and the two are completely incomparable.

But what many people don't know is that in fact, Lego's exploration of operating IP actually began very early.

Back in the last century, Lego tried to enter the video game market. In 1995, LEGO released a console game, Lego Fun to Build. In 1996, Lego formed the game publishing division "Lego Media". But the division had a rocky fate, and after a series of closures and reorganizations, it was acquired by Warner in 2007. As a result, Warner Bros. Interactive Entertainment has become the main licensor and producer of LEGO video games.

After mobile games became the mainstream of the industry, Lego and Warner and other producers launched more than 90 mobile games at one time, who can believe this number?

But it's a pity that the performance of these games is still far from the mainstream level in the industry. And these games are basically in a state of "free-range", and according to the update data recorded by Sensor Tower, most of the recent game updates were at least a year ago.

There is also a big movie, which was made by Warner, I remember that it seemed to be released around 2014, and the results are actually quite average. Of course, it made money, but it didn't make a big hit, but it was lucky that it didn't lose money......

Of course, it seems quite pitiful to say, but in fact, Lego's income is still quite considerable, and the bankruptcy and reorganization of R Us is not simply related to the toys themselves. R Us is more of a channel, just like Amazon, just like the domestic Maomao and Dongdong, R Us is doing offline retail. Unlike Lego, which is affected by video games such as computers and mobile phones, the online shopping model of the Internet is obviously more impactful to chain retailers like R Us .

Because while it represents the channel, it also represents the cost.

Transportation, Storefront, Labor...... These are all money-making, R Us wants to eat, thousands of employees up and down want to make money, and the price of products will naturally rise.

This is precisely the advantage of Internet shopping, first of all, I don't leave home, let the outside cost blow the sun, I blow a small air conditioner and drink a small coffee, Balabala swiped a few fingers to easily shop, and then directly to the home, there is no middleman to make the difference...... This is one of the important reasons why it killed R Us "". Of course, there are many other reasons for the bankruptcy and restructuring of Tel"R"Us and not just because of the popularity of online shopping. However, other reasons are not the point of discussion here, so I will not mention them.

From a global perspective, Toys "R" Us is not alone. Under the impact of Internet giants such as Amazon, more than a dozen large retailers around the world have filed for bankruptcy in recent years, including Payless Inc, Gymboree Corp, RadioShack, Perfumania, Rue21, and Sports Authority.

However, it does not mean that offline retail has no meaning at all.

First of all, traditional retailers should not just treat the mobile Internet as an after-dinner dessert, but also need to deeply integrate with the Internet. For example, Best Buy, since 2012, has vigorously developed its online business. Best Buy customers were able to compare prices at 19 online and local retailers, including hypermarkets such as Amazon, Walmart and Sears, when purchasing products. Best Buy users, on the other hand, can pick up their order in a designated store within a few hours of placing an order, which is faster than Amazon's one-day delivery.

It is precisely because of the courage to change that Best Buy, which was once looked down upon, has gradually improved its performance since 2016.

Then there's business transformation, and moving from product to service is another way out.

For example, Gymboree was founded in 1976 as an early education centre, and later developed a children's clothing business covering early childhood education courses, family education, clothing and games, with brands such as Gymboree, Janie and Jack and Crazy 8. On June 16, 2017, Gymboree announced bankruptcy protection, but the Gymboree early education business, which has long been spun off, has a good and stable financial situation and extremely promising development prospects.

On the other hand, Toys"R"Us can actually say that it is not toys that have fallen, but "cities" - cement cities without mice, touch screens and the Internet.

Traditional retailers who are half-pushed and half-pushed to embrace the mobile Internet and refuse to change and transform have only one way to "wait for death". Today, when the new economy is beginning to impact and replace the old economy, if you can't keep up, it means being eliminated, no matter how long your history is, it's useless.

As for the big toy manufacturers?

There's no denying that games do outshine toys.

In many cases, toys are just a substitute for when you don't have a chance to play games. Nowadays, the most popular "toys" for children have slowly changed from all kinds of Transformers, cars, and Lego toys to iPads and game consoles. The dynamic game effect is more attractive than static toys, and 3D, VR, AR games, several children can resist. And for parents, it seems easier to let their children play games. But toys will not disappear completely, and toys have been around since the beginning of human history.

Products that can be used for people's play, especially children's play, have a long history.

Ancient Egyptian artifacts dating back more than 5,000 years already include dolls made of clay, wood, animal bones and ivory, and small drinking utensils and household utensils in children's tombs.

Persian artifacts dating back about 3,000 years have been found in towing toys with round wheels.

Ancient Greece used sounding spinning tops and toys with animal figures that were activated by strings. Ancient Roman tombs have unearthed ivory figures with movable limbs.

In the 18th century, Nuremberg, Germany, became the center of toy production in Europe. The doll is stamped and has mechanical parts inside the body, which can perform actions such as crying and walking. It also produces musical toys and wind-up toys.

In the 19th century, new scientific and technological achievements were applied to the design and production of toys, which led to the development of toy production, and optical toys such as movable paintings, dioramas, and slide lanterns appeared.

In 1878, the Chinese scientist Thomas Edison used the phonograph mechanism to make a talking and singing doll. In the 90s of the 19th century, the United States successively produced electric fans and railroad electric trains.

Toys in our country also have a long history. About 5,500 years ago, small pottery pigs were found at the Dawenkou site in Ningyang, Shandong. There are also pottery toys and bells among the cultural relics of the Qi family, which date back about 3,800 years. Kite and ball games are also more than 2,000 years old. Bamboo, windmill, rolling ring, tangram, nine rings, etc. have become traditional Chinese folk toys, and after the 20th century, the toy manufacturing industry has become an important industry. In the 30s, Germany ranked first in the world in the production and export of toys. In the 40s, the production of toys in the United States developed rapidly, and the production, consumption and imports jumped to the top of the world. In the 50s, Japan's toy industry rose, and exports caught up with Germany. At the end of the 50s, China's toy industry was formed, with Beijing and Shanghai as the main production areas. There are more than 7,000 varieties of toys. In the 60s, the toy industry in Hong Kong rose, and after the 80s, the toy industry in Baodao also developed greatly.

So, toys can be lonely, but they will never disappear.

This kind of entertainment product has existed since the beginning of human thought and history, and has been in existence for thousands of years, witnessing the changes of the entire human history. It is undeniable that with the further development of the Internet and electronic products, toys will be replaced to a greater extent, but even so, toys will not disappear completely. What's more, in fact, some people have begun to reflect on the harm of electronic products since a long time ago, many times, in fact, it is not that parents do not understand these truths, but on the one hand, they have no time to take care of them, on the other hand, they are too noisy and must be appeased, not to mention, when everyone is exposed to electronic products early, whose children go against the grain, but will be regarded as an outlier, as a model of backwardness.

But how long will this last? If a certain age group, an entire generation, wears thick glasses and suffers from the dangers of too much use of electronics too early, there will inevitably be a greater wave of reflection.

What toy manufacturers need to do is to persist in this period of disorderly development of electronic products as much as possible. In the case of wild growth, it is indeed prone to the current situation. But as long as you persevere, you can still see the light of day after all, of course, other means are sometimes necessary, but this requires special treatment in special circumstances.

I have thought about it a lot, but there is still only one core problem...... That is, whether to invest or not?

When it comes to investment, Lego is actually a good choice because it is famous enough. And in the domestic market, the degree of development of Lego is obviously far from enough, that is to say, as long as it continues to develop, it is only the domestic market, and it is estimated that Lego will be able to eat enough and eat fat. Of course, there are also problems, at least in terms of Lego, are they willing to let others take shares? After so many years, the head of Lego has basically not changed, and it is difficult to say whether they want more companies to enter Lego.

So for the time being, this is just an idea, just like the acquisition of MG, it is not a simple thing, if you want to do it, of course, as long as you have money, any company can be acquired, but to measure whether it is worth it, there are actually a lot of troubles in it.