Key Takeaways:
- A Chinese toymaker is finding big profits by ditching premium pricing and selling licensed blind box toys for just $1.50
- KFC is introducing pizzas costing as little as $3.30, straying from its core chicken menu and highlighting a fierce price war to capture cautious consumers
image credit: Bamboo Works
We’re witnessing a couple of new so-called “races to the bottom” on China’s retail scene, driven by irrational competition, also known as “involution,” that’s quite common in the country. Whether it’s the trendy toy sector or the fast-food industry, companies are finding extreme ways to entice thrifty consumers. On one end, a toymaker called Bloks (0325.HK) has rolled out a new line of opaque blind boxes costing just 10 yuan, or about $1.50. On the other end, a much higher-profile name, Yum China (NYSE:YUMC) (9987.HK), has seen its flagship KFC chain roll out a new line of cheap pizzas for as little as 23 yuan. Both moves highlight how brands are frantically cutting prices to survive in a tough consumer market.
We’ll start with Bloks, which is one of a new generation of Chinese toymakers finding big business in their home market. Unlike the higher-profile Pop Mart (9992.HK), creator of the Labubu sensation, Bloks is decidedly focused on the lower end of the market. Pop Mart owns Labubu and most of its other characters, which it sells at premium prices. In contrast, Bloks licenses characters from other creators — including Transformers, Ultraman, and Disney (NYSE:DIS) properties like Toy Story and Zootopia — and sells them at rock-bottom prices.
This post was originally published here
