BUSINESS

Korean toy market driven by animation success, parents’ pride

By 조정은

Sales of homegrown toys surpass foreign brands like Lego

  • Published : Jan 7, 2016 - 16:48
  • Updated : Jan 7, 2016 - 17:58

For Oh Soo-hyun, the mother of a 4-year-old boy in Seoul, last year was a nightmare.

“Turning Mecard,” she said. “I’ve been searching for this everywhere, almost every single day. But even though I get it one by one, the company keeps producing different models. … It has no end.”

Oh is one of many Korean parents pressured by their kids who are captivated by the hit TV animation series. The action-adventure series features dozens of minicars and main characters who control them with their mysterious cards. When touching a card, minicars transform into huge physical things, such as robots, animals and a vampire. 

Shoppers look at Turning Mecard products displayed at a supermarket chain in Seoul on Dec. 21, 2015. (Yonhap)

Sonokong, a local toy distributor and content developer, turned these main features of animation series into toys -- minicars transforming not by magic power but by magnetic force.

Packs consisted of mini cars and cards dominated the nation’s market scene here. On the back of the animation’s sensational popularity, Sonokong grabbed the No. 1 position, pushing foreign brands such as Lego out of the ring less than a year. Building toys like Lego have been losing ground to homegrown action characters like Turning Mecard, Tobot by another firm Young Toys, which was recently sold to a Hong Kong investor.

The firm’s third-quarter sales reached 77.6 billion won, with 6.7 billion won in operating profit, recording 290 percent growth on-year.

Sonokong’s share price peaked on June 18 –- when schools and kindergartens were temporarily closed amid fears over the Middle East respiratory syndrome -- at 8,750 won, up from 2,980 won on Jan. 2, last year. 

Market analysts estimate that Sonokong’s 2015 sales will surpass the 100 billion won mark, thanks to the brisk sales at the Christmas season. The size of the Korean toy market hovers around 1 trillion won and the sector remains less vulnerable to other negative economic factors due to Korean parents’ undying desire to satisfy their kids, they added.

Explaining the dramatic success of this small Korean company that has long been on the verge of collapse, analysts point to its marketing strategy.

“Before launching a new toy series, toy-makers usually produce and air relevant animated TV series or movies first to help familiarize consumers with the characters,” said Kim Nam-kuk, an analyst at Yuanta Securities. 

Evan, one of the Turning Mecard mini car products (Sonokong)

Japanese toy-maker Bandai launched a new animation series in July, along with other global firms, targeting the Christmas season. But none of them were strong enough to challenge Turning Mecard.

“Which toy sells the most depends on the relative success of the animated series,” he said.

Such strategy may have been used for many toy giants like Disney, Bandai or Lego. But the homegrown animations have touched the hearts of Korean kids because they relate to the stories and the characters’ features, said Han Ah-reum, a media representative of Sonokong.

The animation series has aired on KBS 2TV since February last year and also on cable channels. Toys were released in the following month to target the May 5 Children’s Day. 

But the demand for these tiny plastic toys has far exceeded supply, creating not-so-funny scenes like parents setting up tents outside of supermarket chains to get the products as soon as they arrive. In online markets, they have been traded at three or four times the regular price of 17,000 won. 

Oh’s strategy was to register herself at several online cafes so that she could get informed of where the new shipments came in. Oh’s son now has 25 minicars, out of 30 Turning Mecard shapes on the market.

“It was a must-have mission. I am sure that others may have felt the same that we, as parents, don’t want to see our kids looking upset for not having toys that others have,” she said. “But I hope the company stops making new things.”

Contrary to Oh’s wish, Sonokong plans to produce more series as well as a new line of toys in the New Year.

“I cannot talk in detail about the plan of producing the second season series of Turning Mecard, but I can say that Turning Mecard will be Sonokong’s main project for the next few years,” said Han.


By Cho Chung-un (christory@heraldcorp.com)



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