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Aurora Word (Wulula World Co., Ltd., hereinafter referred to as Wulula), a leading enterprise of plush toys in South Korea, was founded in September 1981.

According to the company's consolidated financial data from 2015 to 2019, Aurora Word's sales have been increasing year by year over the past five years, but operating income and net profit have declined in 2018 and 2019. In 2019, its sales reached 924 million yuan and its net profit was 22 million yuan.

Unlike many local toy companies in South Korea, Aurora World derives most of its revenue from overseas markets such as Europe.

Founded in 1981, the company began to expand overseas markets nearly 10 years later, that is, in 1990, and has set up offices in Indonesia, China, the United States, the United Kingdom and other countries and regions to engage in toy production and sales.

In 2000, Aurora World has developed into a leading company in the field of plush toys in South Korea, with a market capitalization of 583 million yuan (99.1 billion won) at the end of the same year. The listing time is five years earlier than the listing of Sonokong, which is also a role company. (expanded reading: SonoKong, a South Korean toy company with annual sales of 4.2 billion yuan, looking for new business opportunities under the epidemic.)

From the perspective of business structure, Aurora World is a toy company integrating development, design, production and sales. At present, the company's business can be roughly divided into three stages-character image design, development, licensing and derivatives, expanding the scope of authorization.

As early as a long time ago, Aurora World understood that simply devoting to the design and development of roles can not maximize the commercial value of roles. Only by commercializing roles and obtaining more benefits through commercial forms such as licensing and derivative development can more benefits be obtained.

Driven by interests, many Korean role enterprises are more involved in the development and sale of derivative products of roles, and only a few enterprises will attach importance to the development, design and commercialization of a role, and then gain benefits through the development of licensing and derivative products.

And the one who has done most successfully in this respect isDisney. They are good at combining roles with multimedia, such as derivative film and television works, games, animation and so on, so as to further expand the commercial value of characters and gain benefits.

Aurora World also wants to replicate Walt Disney Company's success.

The sales volume of Q1 in 2020 is 207 million yuan, the challenge under the epidemic situation.

Aurora World, which started as an export industry, derives about 80 per cent of its revenue from overseas markets.

In terms of sales channels, 60 per cent of Aurora World's products (including toys, theme parks, theme stores, etc.) are traded through offline scenarios. As a result, the company's sales were significantly affected in the first quarter of 2020.

In the first quarter, the company's sales were about 207 million yuan, down 16.48 million yuan from the same period last year; gross profit was about 109 million yuan, down 4.529 million yuan from the same period last year; and net profit was about 2.224 million yuan, down 16.51 million yuan from the same period last year.

Among them, the revenue from the sale of goods was about 198 million yuan, a decrease of 2.3057 million yuan compared with the same period last year; under the influence of the increase in other interests, the overall revenue decreased by 1.647 million yuan.

From this, it can be seen that if there is no outbreak in the first quarter of 2020, Aurora World's revenue will achieve more growth.

From the perspective of geographical distribution, the US market, which accounts for 40% of the global role market, contributes the most to Aurora World, accounting for 119 million yuan, accounting for 57.5% of the total revenue ratio.

This was followed by income from South Korea, which was 51.9967 million yuan (25%).

Aurora World's third-largest market, Hong Kong, China, earned 21.3987 million yuan (10.30%) in the first quarter. The British brand came fourth, contributing 15.1462 million yuan (7.30%) in revenue. The total income in other areas is 379600 yuan (- 0.20%).

To be a Korean "Walt Disney Company": to do animation is to sell toys and enter the Chinese market to aim at the park business.

1. The linkage of toy and animation business

South Korean securities analysts say Aurora World's sales are expected to improve in the second quarter of 2020 as epidemic prevention in South Korea becomes regular. It is mainly driven by the launch of the third season of the animated series "Secret apartment" produced by Aurora World.

The third season of "mysterious apartment"Ghost the ball X6 predictions" has topped 6 per cent since its debut on tooniverse in March. As the animation is loved by the audience, the product sales of related characters are also gradually increasing. The booking event held with the start of the animation sold out only three hours after it was launched.

The company's representative toy products include CUBY ZOO, YooHoo and friends, animal doll Miyoni, etc., in which YooHoo and friends' series of animations have been serialized for many seasons, and the model associated with the animation and toy business has had a positive impact on both sides.

In addition to promoting content, operational Aurora World also has its own methodology. For example, Aurora World has also signed role licensing agreements with BT21, the darling of millennials, and Pengsoo, which has recently been popular with South Korean youth. BT21's plush toys will soon win over fans, and Pengsoo will make a lot of contribution to Wulula's sales.

Although most of Aurora World's revenue comes from overseas, in South Korea, even under the problem of fewer children, it still brings good revenue to the company.

This is because, despite the social problems of having fewer children in South Korea, every family has invested more in their children, giving rise to the new word "Gold Kids", which refers to a spoiled only child. By 2017, the size of South Korea's children's market has reached 235.28 billion yuan, seizing the children's market is something that many role enterprises are striving for.

In this competition, Aurora World has become South Korea's largest share of plush toy companies, ranking first.

Among them, the "Yoohoo and Friends" character toy produced in 2007 with five rare protected animal babies, desert fox, capuchin monkey, red squirrel and ring-tailed lemur as the main characters was animated in 2009. By 2018, the two seasons of animation have been shown in more than 70 countries around the world, with cumulative sales of more than 80 million character toys. It can be said that this is a representative role in South Korea.

In the third quarter of 2019, using 3D technology andNetflix IncCo-produced and distributed globally by Netflix Inc, it has been translated into more than 20 languages and broadcast in more than 190 countries around the world.

The story of the third season will mainly focus on the stories of five protagonists who have gone through hardships to save endangered animals. On the one hand, it is a good way to educate children about endangered animals, and on the other hand, it is a good way to have fun through lovely protagonists.

Aurora World carries out the characteristics of the role industry "One Source, Multi Use" and makes use of the success of "YooHoo and Friends" to actively lay out related role industries in Korea and overseas, and YooHoo Land, Toy Plus and Aurora Land have opened one after another.

Products authorized by the role of the host of the popular variety show "Running" are also welcomed by many children.

It can be said that Aurora World has mastered users of almost all ages in South Korea.

After Aurora World's financial data came out in the first quarter of 2020, analysts said that if the epidemic was brought under control in the second half of 2020, the company's annual sales were expected to grow 2.0% year-on-year to 946 million yuan (160.9 billion won), while operating profit would also rise 7% to 79.41 million yuan (13.5 billion won).

However, with the progress of technology and the increase of market role image, the sales market of plush toys has been impacted, and more and more enterprises are pouring in to carve up the cake. Aurora World has to invest more in operating costs to ensure revenue growth. At the same time, the company's net profit margin is also falling-to 2.4% from 9.1% in 2017.

Resting on your laurels will only bring you to a standstill. In 2018, Aurora World focused on the theme park.

In 2018, Aurora World signed a contract with Qingdao Publishing Group to enter the Chinese children's market.

Aurora World sells YooHoo and Friends comic books with the help of Qingdao Publishing Group's 14000 Xinhua bookstores across the country, as well as building YooHoo theme parks in super-first-tier cities such as Beijing and Shanghai, and then in second-tier cities such as Qingdao.

Under the impact of the epidemic, when most stores were closed, Aurora World's toy store, Toy Plus, officially opened in March.

In addition to selling Aurora World self-developed products, it also sells Lego and other well-known foreign toy brands.

In addition, as a role enterprise, the design, development and operation of role image is the source of the enterprise. Aurora World's investment in developing new roles is also growing.

Every year, Aurora World devotes 3% of its total sales to research and development of new roles. A total of 15.8814 million yuan was invested in 2016, 16.4696 million yuan in 2017 and 19.4106 million yuan in 2018.

Since 1999, Aurora World's Design Institute has developed more than 700 new characters every year, accumulating more than 70, 000 characters by 2019.

As the wind of the fourth-generation industrial revolution began to blow into the toy field, Wulula also began to develop intelligent toys using high and new technologies such as AI, AR, VR and so on.

* the above exchange rate is converted at RMB 1 yuan = 0.0059 won on June 25.