【Local】Kids’ toys could be good investments
Hundreds of thousands of investors are now eyeing “toy investment” which could provide returns higher than investing in gold. For most people, buying toys is for children or personal interest but with growing popularity of the Internet, which provides online trading platforms and easy accessible information, more and more people are interested in this “unusual investment”.
With an aim to tap the toy market potential, Animes Pro, a local toyshop with 20 years of history in wholesale industry, has begun to develop retail business in recent years. Focusing on selling Japanese toy figures, the company generates about HK$60-70 million of annual revenues from retail business.
The value of LEGO sets, kept in pristine condition, has risen an average of 12 percent per year since 2000, higher than the 9.6 percent annual return from gold investment during the same period, according to Daily Telegraph.
It belongs to the International Love Heart 1000% series, which was launched in 2011.
The value has recorded at least a 3-fold growth to over HK$20,000 now.
Online channels bring most sales
“Online platform is the first step for contacting toy investors,” said Raymond Wong, the director of Toy Zone, a local toy store with accounts in various online sales platforms. The shop, which mainly sells second-hand toys, records about HK$500,000 gross profit per month. Thanks to social media platforms such as the Facebook group and Yahoo Auction, more investors can obtain product information easily.
Wong said most investors would contact his store via Facebook and asked for product information. If they really decided to purchase the toys, they would come to the store. “Most investors will not walk the streets but shop online,” he added.
The online platforms provided a clear track record, allowing sellers and buyers to set prices easily, Wong said. Online trading also changed the market mix because there is no way to know who are the market participants, whether they are individuals or stores. Potential buyers and sellers can contact each other directly and do not need a middleman, such as a store, for toy trading.
The Internet also connects worldwide investors, who are looking into the market of toys and figures. Global shopping platform eBay, one of the intangible markets for trading figures, has posted more than 1.25 million action figures online. “If investors want to collect rare figures or regional special editions, they can trade via eBay, instead of the Facebook group, which is more local-focused,” said Mung Wai-leong, the author of Alternative Investments.
Reasons behind the appreciation potential of toys
The strong purchasing desire from kidults, vital players in the industry, drives up the market. With strong purchasing power, they hope to get back the childhood memory through purchasing toys, said Mung. The market still had huge potential since some kidults did not know their favorite comics or animations had launched themed toys, Ray Chan, vice general manager of Animes Pro, said. When they know the information, some kidults would definitely acquire those toys.
Besides high demand, low supply can also boost the prices of toys. In 70s to 80s when many classical cartoons, movies and comics were published, there was an impressive boom the toys industry. Wong saw the toys produced in those years enjoying higher appreciation than toys launched in the recent years. Also, super fans purchased toys made in the past are unwilling to resell them now. Shrinking supply will lead to higher value of the toy.
Some classical and special editions of toys also have an unexpected appreciation value. Chan expected LEGO toys with the theme of well-known buildings would enjoy a higher mark-up value. Its value could increase by a few folds within years. Some special editions of Marvel Studio figures also enjoyed greater appreciation potential, such as the magnetic floating version of Iron Man, which was listed as the top ten must-buy toys by a famous media, said Chan.
However, remake editions have limited appreciation potential compared with the original ones, noted Wong. Because of the trend of playing figures and toys, some manufacturers launched the remake edition of the figures, usually with changes on the original ones. He explained many fans were more interested in the original work. “The remake edition will trigger off an upsurge in a short period of time while the original edition will have a long-term appreciation power,” Wong added.
Media is also a reason for price appreciation. People’s interest in Japanese and Western cultures, fanned by the media, has led the speculation of some movie-, comics- and animation-related toys or figures of sports celebrities.
Ray Chan, vice general manager of Animes Pro, said many toy makers launch the effect sets for the users to make the suitable scenes for their figures.
Popular toys as investment choices
For those movie-related figures, their value was driven by box office performance, Mung said. For example, Pepper Potts, one of the character in Iron Man, has launched different special editions to fulfill the plots and changes in the latest movies. They drew good responses by the market while the collection of Guardians of Galaxy, a not well-received Marvel Studios movie, has relatively limited appreciation potential.
Comics- and animation-related figures are also popular choices but they may not see an explosive appreciation. Different from the movie themed figures, animations and comics have usually launched for years. Chan said the sales of those related figures was relatively stable, as different from movie-related figures, whose sales would not be stimulated by film launching. For example, the Japanese comic One Piece, which has been published for more than 10 years, accumulates a large amount of readers who are potential buyers of those toy figures. But its price has remained steady.
Furthermore, another category of hot pick figures is basketball stars, such as Kobe Bryant and Michael Jordan. Earlier this year, basketball player Kobe Bryant retired and his figures appreciated remarkably. Some of the products were even out of stock. Mung said the value of these figures was definitely affected by the performance and activities of the famous players.
Who are the investors?
Most people believe toy market is dominated by males, who are the major fans of toys and figures. Actually, female also has a role in this toys investment market. Last month, the exhibition of Japanese comics’ character Masked Rider and the themed gaming zone lured female fans to visit. Female investors are more interested in feminine toys of some animations whose major audience are female, such as Sailormoon, said Ray Chan, the vice general manager of Animes Pro. Chan said the number of woman customers who liked to buy feminine and tiny toys such as the capsule toy of Japanese cartoons had been rising.
Raymond Wong said the ratio of collectors and users in the toy market might be half-half. Collectors for display and investment and users, who do play with toys would usually prefer a variation of toys. Wong said aiming at collecting and displaying, the collectors also tend to have first hand and static figures. Fond of engagement in playing the figures, users prefer to purchase action toys with different accessories such as effect sets and weapons of the character, which allow users to modify the figure.
Exihibition outside the Harbour City
Tips on Investing Figures
Most people concern about the conditions of figures as a good condition promise a higher value. Typically, humidity, dust and sunshine are major enemies of toys. Besides, investors could keep the toys with a box set for good conditions and easier for resale, Mung suggested. He also believed selling a whole collection of toys together would lead to a higher mark-up value. For instance, NBA player Shaquille O’Neal and Penny Hardaway are the outstanding partners during the matches. Investors can sell the two figures together at HK$600-700 while getting only HK$100-200 for a single figure. Investors should be much more careful for investing toys. Mung said this kind of unusual investment was easily affected by a short-term upsurge or trend. Without a fundamental knowledge on the toys culture, investors cannot gain any profit despite the high appreciation potential of toys.
BE@RBRICK has cross-over with many different cartoons.
Reporting by Koey Yip, Editing by Gloria Song
《The Young Financial Post 新報人財經》
【Property】Mixed reactions on HK’s new stamp duty
【E-Commerce】Online shopping opens window for locally-made food