A Profitability Analysis of Purchasing Secret Edition in Blind Boxes: A Case Study of Pop Mart’s Hirono Echo Series

Abstract

This study conducts a profitability simulation of purchasing blind boxes by taking an example of a series called Hirono Echo in Pop Mart. This simulation analyzes the probability of drawing the secret edition in the blind boxes. Using geometric distribution to simulate the experiment, this study simulates the profit and cost of consumers who purchase the blind boxes. The result of this simulation indicates that the expected spending of getting one secret edition is around 10000 RMB and the corresponding expected trials that consumers need is 144. But the expected market value of this secret edition is only 491.885 RMB which is quiet less than the expected spending. 95.24% people overpay the secret edition, and the top 10% people account for 33.3% of total revenue. This study highlights the economic inefficiency of blind boxes market and the irrational behavior of consumers. And this study doubts the perception of “luck” associated with blind boxes purchasing. The limitations of this study contain the lack of thinking the situation the consumers want to collect the whole set of this series and the different behaviors in the real life. This analysis provides insights into consumer psychology and the financial dynamics of the booming blind box market.