"Guzi economy" is an emerging consumer phenomenon, mainly revolving around peripheral products derived from the second dimension IP (intellectual property), including badges (吧唧), posters, cards, pendants, standing plates, figurines, dolls, etc. This concept originates from the transliteration of the English word "Goods", widely used because of its resemblance to the pronunciation of "Guzi" in Japanese. The core of the Guzi economy lies not only in commodity trading but also in cultural and emotional exchange, where consumers express their love and loyalty to a specific IP through purchasing and collecting Guzi.

The market size of the Guzi economy has reached the billion level and is expected to continue growing in the coming years. According to iiMedia Research data, in 2023, the market size of China's second dimension industry reached 221.9 billion yuan, a year-on-year growth of 27.6%, with the peripheral and derivative market at 102.4 billion yuan. It is estimated that by 2029, the second dimension industry scale will increase from 221.9 billion yuan to 590 billion yuan, with a compound growth rate of 18%. iiMedia Research predicts that by 2026, the second dimension peripheral derivative industry market size will reach 160 billion yuan, with commodity authorization accounting for 130 billion yuan.

The main consumer group of the Guzi economy is primarily young people, especially post-2000s and post-2010s, who have a deep emotional connection and identification with the second dimension culture. This economic form not only drives the sales of related products but also stimulates innovation in commercial real estate and retail formats, such as creating second dimension consumer landmarks in core business districts and introducing second dimension elements in retail stores.

According to the Securities Times app, the Guzi industry has risen in 2022 and erupted in 2023, supporting the prosperous "Guzi" economy through the growth structure of the sports and entertainment products, significantly outpacing the overall social retail growth in 2023/2024. The IP authorization parties have also benefited, with Sanrio's Aliyu, Ultraman's parent company Tsuburaya Fields domestic authorization both seeing a 40%+ growth rate.

Mostly focusing on second dimension IP authorization, the competitive advantage lies mainly in the distribution channels. Compared to the leading comprehensive industrial layout in the fad industry (Pop Mart), there are fewer companies with a complete layout of the Guzi full industrial chain. Companies like Card Games and Guangbo Group mainly focus on product design and development in the middle of the industrial chain and distribution, acquiring IP authorization upstream, establishing their own supply chain to provide product manufacturing capabilities, connecting downstream distribution channels for monetization. However, self-operated store revenue contribution is still low but expanding the industrial chain.

Multiple brokerages have released "Guzi economy" related research reports, believing that the rise of "Gu Circle culture" has become an undeniable new consumer force, expected to support a market worth billions.

Guazi economy related industry chain Hong Kong stocks:

Pop Mart (09992): The company is the largest and fastest-growing enterprise in the toy industry. Pop Mart focuses on IP as its core, strategically arranges the entire industry chain, continuously improves its operational capabilities and consumer reach, and has a good brand reputation and visibility. Since 2021, the company has expanded into the overseas market, with a very successful international expansion, showing phenomenal revenue growth. By the first half of 2024, international revenue accounted for close to 30%, with stores established in over 20 countries/regions.

China Lit Group (00772): Continues the success of top-level IP sequels, establishing a synergistic IP industry chain linkage operation mechanism that integrates multiple platforms for IP development. Commercialization and monetization of IP: Card business breakthrough in the field of derivative products. China Lit has introduced blind boxes, action figures, soft toys, and a series of other works based on IPs such as 'Joy of Life,' 'The King's Avatar,' 'Lord of the Mysteries,' and 'Fight Break Sphere,' continuously expanding the authorized range and scale of IP derivative products. Exploration of new technologies and businesses: AI technology deeply empowers the overall ecosystem, and rapid progress is made in the short drama market.