LINE FRIENDS domestic offline stores all closed

LINE FRIENDS domestic offline stores all closed, February 10, 10 pm, LINE FRIENDS in the mainland China market, the last store in Chengdu store will be closed.LINE FRIENDS domestic offline stores all closed.

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February 10, 2022 at 10 pm, the international creative studio LINE FRIENDS Chengdu Ocean Express Taikoo Li store will be officially closed. This is also the last offline store of LINE FRIENDS in mainland China.

As a popular netroots carding place, LINE FRIENDS offline stores were once the brand's traffic entrance. For example, the LINE FRIENDS flagship store on Huaihai Road in Shanghai, which officially opened to the public in November 2016, is the first boutique in Shanghai themed on Brown Bear's sister, Choco (CHOCO). The store has nearly 800 square meters of upper and lower floors, with the LINE FRIENDS Cafe inside. CHOCO sitting on the eaves outside the store is quite eye-catching, and once attracted a lot of consumers to go to take pictures and shop. 2021, May, the store has announced the closure.

LINE FRIENDS side, the closed store initiative is from 2020 to start the overall strategic needs. In fact, in recent years, LINE FRIENDS brick-and-mortar business has been weak growth. DTZ Guangzhou commercial real estate department senior assistant director Zhou Jie has analyzed that: "LINE FRIENDS experience in the form of a single, only to provide IP cartoon image scene photo card, lack of interactivity; and peripheral products simple style, update frequency is slow and lack of innovation, resulting in a weak re-purchase rate, the user viscosity is not strong."

LINE FRIENDS originated in the South Korean Internet company NHN's Japanese subsidiary of the launch of the mobile chat tool "Line", and then derived from the related emoticon IP, game operations and other businesses, "Brown Bear", "Koni" and "Brownie". "In July 2014, LINE's operation in China was halted, and the development of its communication and game business was hindered. A few months later, LINE FRIENDS started its offline store business. At its peak, the brand had 12 stores operating in China.

After the offline store business closed, LINE FRIENDS shifted its focus to online retail and IP licensing. IP licenses have relatively high profit margins, and LINE FRIENDS will be able to reduce the pressure on its operating costs by cutting out asset-heavy businesses such as brick-and-mortar stores.

Li Yiyong, general manager of LINE FRIENDS China, introduced at the 2021 China Licensee Conference that in the first half of 2021, the overall business of LINE FRIENDS China market has achieved profitable growth, with e-commerce sales up 30% year-on-year, and revenue from licensing business up 20% year-on-year.

"While continuing to lay out online communication channels, offline spaces remain an important stronghold for brands to engage directly with consumers." LINE FRIENDS revealed that offline will carry out theme hotels, catering, small retail stores, unmanned retail and other multi-format offline experience space, providing fans with themed exhibitions, flash mobs, parties and other diversified interactive experiences. Interactive experience space experience scenes from different fields such as art and humanities, exquisite camping.

In 2022, the key direction of LINE FRIENDS also includes the development of the maternal and child market. Based on the gradual entry of some fans into the family and the future market potential of the mother and baby market, LINE FRIENDS officially announced its entry into the mother and baby market in 2021, and will continue to launch a series of mother and baby themed galleries and expand licensing cooperation. At the same time, the offline theme of the children's park will also be landing.

In fact, LINE FRIENDS popular in mainland China, the market is still relatively lack of such a fresh `Japanese IP image, people see or Doraemon or Hello Kitty. but with the passage of time, there are more and more new IP appeared, and further squeezed LINE FRIENDS living space.

In addition, the social network era, people's preferences are also changing rapidly, last month, we are still in Disneyland's Ling Na Baier cheering, and now began to queue up to buy the Beijing Winter Olympics mascot Ice Dun Dun. LINE FRIENDS a few images initially just a communication software emoticon, in the absence of a strong IP system and the story background to support the case, the overstaying of the welcome is a matter of time. Things.

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Due to the development of the new consumerism in recent years brought about by the change in consumer habits, LINE FRIENDS made the initiative to shift the focus of retail to online.

On February 10th at 10pm, LINE FRIENDS' last store in the Chinese mainland market, Chengdu, will close.

The first financial reporter learned that the above move to close the store is the company's overall strategic adjustment needs since 2020. Due to the changes in consumption habits brought about by the development of new consumerism in recent years, LINE FRIENDS has made the move to shift its retail focus to online.

In order to further create diversified interactive scenarios, LINE FRIENDS will carry out themed hotels, restaurants, small retail stores, unmanned retail and other multi-format offline experience spaces offline, providing fans with diversified interactive experiences such as themed exhibitions, flash mobs and parties.

In 2011, LINE FRIENDS was officially introduced to the public as a cartoon character for the cell phone chatting tool "LINE".

Since 2016, Line Friends has been expanding its offline territory, and by 2018, the company had opened***42 flagship stores in China, Japan, South Korea, and Thailand, among other countries and regions. For example, in 2018 the world's largest store area of Line Friends opened in Yintai in77 in Hangzhou, Zhejiang Province.

The research report of Northeast Securities shows that relying on Line Friends' integrated online and offline play, the company's revenue reached $177 million in 2018, up 59.19% year-on-year. However, in 2019, the company maintained the original strategy, insufficient innovation in product power, reduced offline exposure, and reduced IP heat, resulting in a 2% decline in revenue for the year, and 25 physical stores in Guangzhou, Shenzhen, and Shanghai closed down due to poor management.

Line Friends quickly became a big hit and disappeared because of the lack of product innovation and fan interaction in IP operations.

LINE FRIENDS has a long history of building IP with light content, but how the emoji IP has a long-term emotional connection with the user, and then maintain vitality, the flow of this type of IP operation and innovation is a major test of the ability of the content has become an important hand.

At the content level, the company, on the one hand, reaches out to different groups of people through rich and varied content to enhance the emotional link with people on different platforms; on the other hand, it continues to take root in the Chinese market with a strong platform and multiple forms through short videos.

As a creative studio, LINE FRIENDS is no longer limited to the existing retail sector, and is working with global partners such as Netflix, Tencent, Big Hit and others to launch a variety of media and entertainment content, gradually expanding the possibilities of cartoon image IP.

Data provided by LINE FRIENDS shows that in 2021, the company's overall business in the Chinese market to achieve profitable growth, the official flagship store sales increased by 30% year-on-year, licensing business revenue increased by 20% year-on-year.

With the rise of the Chinese economy, the disposable income of Chinese residents has continued to grow over the past decade. The increase in per capita disposable income has brought about significant changes in consumption patterns. Chinese consumers are now paying more and more attention to product quality and the emotional satisfaction it brings, and the interest characteristics and sense of belonging to the circle of Generation Z make it easier for them to pay for hobbies and other spiritual needs, which makes them an excellent target group for "grassroots shopping", the value economy, and IP consumption, and has greatly boosted the consumption of the trendy game market.

According to a report by Frost & Sullivan, the market size of trendy toy retail in China will increase from 6.3 billion yuan in 2015 to 20.7 billion yuan in 2019, with a CAGR of 34.6%, and will account for about 15% of the global trendy toy market. Driven by the rising popularity of trendy toys in China, the trendy toy retail market size is expected to reach 76.3 billion yuan by 2024.

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Recently, LINE FRIENDS officially closed the last store in the mainland China market, but as a single day store traffic broke 100,000 myth of the "Asian expression of the sky group", LINE FRIENDS said that the company will not withdraw from China, but will continue to deepen the market. The company's first step in the development of a new product line is to create a new product line that is more efficient, more effective, and more efficient.

All the physical stores are closed

On February 10th, LINE FRIENDS Chengdu Ocean Express Taikoo Li store was officially closed, so the international creative studio LINE FRIENDS in the mainland China market all offline physical stores are closed.

However, although the physical store closed, but this does not mean that LINE FRIENDS will withdraw from China, according to its overall strategic needs from 2020, the future focus of the company's retail will be shifted to online, and comprehensively carry out the strategic layout of digitalization, the development of content as the core of the digital assets, and actively establish local content centers, focusing on the incubation of original IP and the casting of new IP business. The company will also carry out a comprehensive digital strategy layout to develop content-centered digital assets, actively establish local content centers, and focus on original IP incubation as well as casting of new IP formats.

The data shows that as of November 2021, through digital transformation, LINE FRIENDS operates 14 online sales platforms globally.

In 2011, LINE FRIENDS officially met the public as the cartoon image of the cell phone chat tool "LINE", and became popular rapidly with original cartoon images such as BROWN & FRIENDS, BT21, ROY6, BRAWL STARS, etc. In 2015, LINE FRIENDS became one of the most popular mobile phone chat tools in the world. In January 2015, LINE FRIENDS became an independent company, expanding its business from traditional retail to a global creative studio. Subsequently, a total of 160 offline stores have been opened in 19 countries and regions around the world.

And 2016 had also been the fastest year for LINE FRIENDS to expand in the mainland market, with the brand opening stores in Guangzhou, Nanjing, Shenzhen, Beijing, Chengdu and other places. According to LINE FRIENDS previous WeChat public news, the peak period of the company's operation in the mainland has 12 stores.

It is worth noting that although the offline stores are all closed, but LINE FRIENDS does not intend to give up the offline channel, it is reported that the company will launch a retail sub-brand PLAY LINE FRIENDS, to take the self-supporting + licensed products of the integration of the retail mode of operation; in addition, the company is also actively exploring the unmanned retail model, and has stationed in Shanghai, including the main shopping centers in 14 cities. The company is also actively exploring the unmanned retail model and has entered major shopping centers in 14 cities including Shanghai.

According to the brand's 2022 development strategy, in the future, LINE FRIENDS will carry out themed hotels, catering, retail stores, unmanned retail and other offline experience spaces; in addition to shifting the focus of retailing to online, LINE FRIENDS will also pay more attention to the development of digital assets centered on content; furthermore, LINE FRIENDS LINE FRIENDS also announced that it will upgrade its mother and baby sub-brands to further expand the mother and baby market.

Licensing business is growing rapidly

After the explosion of cartoon images, LINE FRIENDS has earned 1.8 billion yuan a year from emoji packages, but from the point of view of revenue, the growth rate has slowed down in recent years.

Business performance, Northeast Securities research report shows that relying on Line Friends online and offline integrated play, the company's revenue reached $177 million in 2018, a year-on-year increase of 59.19%. However, in 2019, the company maintained the original strategy, insufficient innovation in product power, reduced offline exposure, and reduced IP heat, resulting in a 2% decline in revenue for the year, and 25 physical stores in Guangzhou, Shenzhen, and Shanghai closed down due to mismanagement.

As of the third quarter of 2020, LINE FRIENDS retail store revenue for the third quarter was 800 billion yen, down 43.5% year-on-year.

On the other hand, the licensing business has more potential in terms of the brand's growth in the country.

In fact, since the opening of the licensing business in mainland China, LINE FRIENDS has also maintained steady growth in revenue through co-branded licensing partnerships with hundreds of brands in a variety of fields, including apparel, home furnishings, beauty, accessories, toys, videos, pet supplies, bags, games, and digital.

According to LINE FRIENDS, the brand's authorization business in China began formal operation in 2018, and by 2019 the overall operating results of the LINE FRIENDS China market had increased by 38% compared to 2018, of which the authorization business increased by 80%.

In 2020, the turnover of LINE FRIENDS' IP-related business in the Chinese market reached RMB 1.7 billion, an increase of nearly 40 times compared to the beginning of its official character IP business in 2015.

In the first half of 2021, the overall business of LINE FRIENDS in the Chinese market achieved profitable growth, with official flagship store sales increasing by 30% year-on-year, of which the revenue from the licensing business increased by 20% year-on-year.

Is an IP-themed store fragrant or not?

Since LINE FRIENDS entered the Chinese market in 2016, B.Duck, Hello Kitty, Charlie Brown and other well-known IP have been in the domestic layout of the IP composite business theme stores, such as related theme cafes, experience stores, ramen halls and so on; but they have failed to stir up too much water.

So, the IP theme store in the end is still fragrant? The answer is yes.

In recent years, as the tide of the toy market continues to be hot, according to the Frost & Sullivan report, the market size of China's trendy toy retail has increased from 6.3 billion yuan in 2015 to 20.7 billion yuan in 2019, with a compound annual growth rate of 34.6%, occupying about 15% of the global tide of the toy market. Driven by the rising popularity of trendy toys in China, the trendy toy retail market size is expected to reach 76.3 billion yuan by 2024.

Against this backdrop, a new form of IP-themed store winds up again. Almost all major shopping malls across the country can be seen in the bubble Mart, cool fun, 53 TOYS and other trendy IP theme stores, which bubble Mart in the form of "blind box + IP" is a great harvest, and successfully landed on the Hong Kong Stock Exchange, becoming the first domestic trend of the first stock.

In terms of IP development and operation, Bubble Mart has more than 80 IPs, which is a leading position in the domestic tide game market. In terms of brand authorization, it is reported that Bubble Mart completed 25 brand authorization businesses last year***, covering clothing, food, housing, transportation, beauty, technology and other fields, such as GXG, H?agen-Dazs, Sephora, Lenovo and so on. Twelve of these licensed products in the double eleven period sales of nearly one hundred million.

However, there are industry insiders pointed out that the current domestic tide play market IP numerous, fierce competition, if only a thin IP output without the support of high-quality content, Bubble Mart may not be able to maintain sustained and stable growth. From the financial data, in recent years, although the bubble Mart revenue to maintain the growth trend, but the growth rate has slowed down.

LINE FRIENDS began to layout the construction of the Chinese market content center, and said: "The real super IP is not affected by the change of the times, can rely on their own values to continue to influence the consumers of each era, especially young people. And to do this, in addition to the image in line with the public aesthetic, content support is essential."

According to the brand's announcement at the 2021 China Licensee Conference, the company's first comic book project is about to start, with plans to launch the first anthropomorphic campus youth serial comic, and the animated series of LINE FRIENDS' local co-creator IP, ROY6, will be aired online at BILIBILI.