The “millet economy” is an emerging consumer phenomenon. It mainly revolves around peripheral products derived from two-dimensional IP (intellectual property). These products include badges (bars), posters, cards, ornaments, standing cards, figurines, dolls, etc. This concept comes from the transliteration of the English word “Goods” and is widely used because of its similar pronunciation to “millet” in Japanese. The core of the millet economy is that it is not only a commodity transaction, but also a kind of cultural and emotional exchange. Consumers express their love and loyalty to an IP by purchasing and collecting millet.

The millet economy's market size has reached 100 billion and is expected to continue growing over the next few years. According to iResearch data, the market size of China's two-dimensional industry reached 221.9 billion yuan in 2023, an increase of 27.6% over the previous year, including the peripheral and derivative markets of 102.4 billion yuan. It is estimated that by 2029, the scale of the two-dimensional industry will grow from 221.9 billion yuan to 590 billion yuan, with a compound growth rate of 18%. Insight Consulting predicts that by 2026, the secondary derivatives market will reach 160 billion yuan, of which product licensing will account for 130 billion yuan.

The consumer groups in the millet economy are mainly young people, especially the post-00s and post-10s. They have deep feelings and recognition for two-dimensional culture. This economic model not only promotes sales of related products, but also drives innovation in commercial real estate and retail formats, such as creating two-dimensional consumer landmarks in core business districts and introducing two-dimensional elements into retail stores.

The Zhitong Finance App learned that the millet industry rose in '22 and exploded in '23. The zero-growth structure supports the “millet” economic boom: the growth rate of sports and entertainment products clearly outperformed Social Zero as a whole in 23/24. IP licensors also benefited. Sanrio's copyright holder Aliyu and Altman's parent company Tsuburaya Fields all had a 40% + increase in domestic licensing.

Most are mainly two-dimensional IP licensing, and the competitive advantage is mainly in channels. Compared with the trendy game industry, which has taken the lead in forming a complete industrial chain layout (Bubble Mart), there are few companies with a complete layout of the entire Juzi industry chain. Card Game and Guangbo Co., Ltd. mainly focus on product design, development and distribution in the middle of the industrial chain, obtain IP licenses upstream, and build their own supply chains to provide product production capacity+open up downstream distribution channels to complete monetization, but the revenue contribution of self-operated stores is still low, but they are expanding the industrial chain.

A number of brokerage firms have published research reports related to the “millet economy.” They believe that the rise of “valley culture” has become a new consumer force that cannot be ignored and will support the 100 billion dollar market in the future.

Hong Kong stocks in the industrial chain related to the millet economy:

Bubble Mart (09992): The company is the largest and fastest growing enterprise in the trendy game industry. With IP as the core, Bubble Mart lays out the entire industry chain. The level of operation and consumer reach capabilities continue to improve, and the brand awareness and reputation are good. Since 2021, the company has set up overseas channels. It has gone overseas very smoothly, and annual revenue continues to grow phenomenally. As of the first half of 2024, the share of overseas revenue was close to 30%, and stores have been opened in more than 20 countries.

Reading Group (00772): Successful renewal of top IP, establishing a joint operation mechanism for the entire IP industry chain with multi-terminal collaboration and integrated development. IP commercialization and monetization: Key breakthroughs in the card business in the derivatives sector. Reading has launched a series of IP works such as “Celebrating the Years”, “Full Time Master”, “Master of Secrets”, and “Fighting the Sky”, including Blind Box, Figure, and Soft Week, continuously expanding the scope and scale of IP derivatives licensing. New technology and new business exploration: AI technology deeply empowers the overall ecosystem, and the short drama market is progressing rapidly.