China to regulate blind box market

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China to regulate blind box market

The new stipulations regulate prices, ban on sales to children under 8 years old.

In June, consumers check out blind box toys at an outlet in Shanghai. The State Administration for Market Regulation, China's top market regulator, said businesses should not sell blind boxes to minors under 8 years old, as part of broader efforts to regulate the country's billion-dollar blind box industry.

A blind box is a popular way of packaging toys and other products to keep their contents hidden. The Chinese Academy of Social Sciences estimated that the market size of China's trendy toys, mainly including blind boxes, is expected to hit 47.8 billion yuan $7.06 billion this year.

The guideline, which is open to public opinion, says businesses can only sell blind boxes to those aged 8 and above after getting the consent of their guardians.

The guideline said companies should not bid up prices and should reasonably determine prices of blind boxes based on production and operation costs as well as market supply and demand. It said blind box products should not have a big gap from that of non-blind box products of the same quality.

The guideline will regulate prices based on the value of the blind boxes. The prices of blind boxes are inconsistent with their value, said Chen Jianjie, a lawyer with Brighteous Law Firm.

In January, the China Consumers Association said that blind box consumption is growing in a disorderly manner, from pets to air tickets, and increasing problems are also arising, including illegal sales, unknown probabilities and consumption addiction.

China Media Group reported a case in which a blind box was priced at 800 yuan but the actual cost was only about 30 yuan. Some people spend more than 10,000 dollars to buy blind boxes in order to get a limited-edition toy.

It will prevent the sector from becoming a gambling tool that infringes on consumer rights, Chen said.

As some business operators sold blind boxes with pets inside, the SAMR draft guideline also clarified that live animals, drugs, medical devices, special cosmetics and unmarked express parcels cannot be sold in the form of blind boxes.

After the news, Pop Mart, China mainland's leading blind box company, started with a slight drop but closed with a 3.3 percent increase in the share price on the Hong Kong stock exchange.

The company said in a statement that the draft guideline is of positive significance and can give clear directions to companies to operate in a standardized way, which helps the sector create a better business environment.