iDreamSky collabs with Mighty Jaxx: a win-win?
Lately, the Singapore-based “future culture” company Mighty Jaxx has been on the rise. Earlier this month, the company raised $20 million in a series A+ funding led by East Ventures, and since then it has been gaining more investors, one of which is the Chinese company iDreamSky Technology Holdings Limited.
Mighty Jaxx was founded in 2012 by Jackson Aw. The company has collaborated with designers and big global brands such as Nickelodeon, Warner Brothers, and DC Comics to design and manufacture collectible products.
According to a report released by Market Decipher, the value of the global collectibles market was $412 billion in 2021, and is forecasted to reach $692.4 billion by 2032. Toy collectibles (also called designer/art toys), sports memorabilia, and NTFs are some of the fastest-growing segments of the industry.
Mighty Jaxx has a similar vision to its new investor, iDreamSky, and their collaboration does not stop at the shareholding association – the Chinese digital entertainment platform has also signed a deal to source and distribute the Singapore startup’s products in mainland China.
Formerly being a company focused on game distribution, iDreamSky has now strategically positioned itself as an intellectual property (IP) operator in a bid to expand its horizons beyond the gaming industry. iDreamSky powers its IP operations through digital technology, and is responsible for the entire life-cycle of a given IP operation – including IP curation, supply chain management, user acquisition, etc. iDreamSky has also defined its offline retail business as a secondary priority due to Tencent being the company’s shareholder.
The instant messaging platform QQ (formerly OICQ) is Tencent’s first product, whose penguin icon has evolved to become the tech giant’s official symbol. Tencent named its IP and collectibles segment the “QQ Family”, which offers digital collectibles like WeChat stickers and online comics, as well as real-life collectibles such as blind boxes, plush toys, etc. Consumers can get collectibles by purchasing or obtaining them for free online, and if they want real-life items, they can get them at the iDreamSky-operated QQ Family offline store.
The first flagship store in Shenzhen Source: QQ Family WeChat subscription account
In July 2021, the first QQ Family flagship store was opened in Shenzhen. It sells QQ Family collectibles, as well as ones of famous IPs, game consoles, and gaming experiences. Consumers can also book “game zone rooms”, where they get to enjoy hundreds of trendy console games.
There are currently four QQ Family flagship stores in Shenzhen, with another one located in Guangzhou. iDreamSky is planning to build another 40-50 QQ Family stores before 2023, covering the Guangdong–Hong Kong–Macau Greater Bay Area, as well as the Yangtze River Delta Megacity Region.
Figure of character Klee, credit: Genshin Impact Source: Tmall store of Genshin Impact
The modern cultural industry in China has started a trend of monetizing IPs by selling collectibles, and QQ Family is not an exception to the rule. Neither is APEX-TOYS, which produces collectibles for Riot Games, Supercell, bilibili, etc. The figurine above was produced by APEX-TOYS with Mihoyo’s authorization, and in 2021, Mihoyo invested in a collectible selling platform named Suplay.
Tencent’s investment in Mighty Jaxx is a bet on the latter company’s influence in Southeast Asia, North America, and China. The “future culture” company used to mainly sell collectibles in the US, which is a known and well-curated market for collectible hobbyists. However, Mighty Jaxx noticed a slow-down in its business growth, and took note of the enormous potential of the (at the time) unexplored Chinese market. In 2018, Mighty Jaxx entered the Chinese market through a collaboration with the IP operation company IPSTAR, and now, 60% of the company’s income comes from that very market.
Screenshots of Mighty Jaxx’s Tmall store, RED account, Douyin account
In China, Mighty Jaxx keeps on making its presence bigger in various online and offline channels. The company now operates its own official market accounts on mainstream platforms like Tmall, Douyin, and RED, and by the end of 2021, Chinese consumers can expect to be able to purchase Mighty Jaxx’s products from over 500 collectible in-site stores. The company is planning on building more than 1200 in-site stores before 2023 with the help of iDreamSky.
Frost & Sullivan has estimated that China’s designer toy market will exceed $11 billion by 2024. The industry consists of over 800 intertwined companies as of the end of 2020, and factories in Dongguan city, Guangdong Province, are said to produce over 80% of all collectibles for the entire country.
POP MART is one of the most prominent domestic IP curation companies. It has claimed to have a $710 million income in the financial year of 2021 alone, and yet, neither POP MART nor any other giants is entirely dominating the fast-growing industry in China as of right now.
Overall, the collectible market in China is quite fragmented, but companies like Mighty Jaxx and iDreamSky seem to be keen on forming a competitive alliance based on their shared faith in the potential of phygital experiences. We believe that Mighty Jaxx will undoubtedly become a key influence in China with the help of iDreamSky’s experience in the domestic market. Meanwhile, Chinese brands and IPs can benefit greatly from Mighty Jaxx’s knowledge of the Southeast Asian and the US markets in their quest of going global.
Photo by Jane Slack-Smith on Unsplash