Hitcard, a trading card company founded in 2021, is moving ahead with its listing process and could become China’s first publicly traded card brand. The startup has carved out a niche in collectible cards for adult consumers, a segment that has expanded quickly alongside the broader collectibles market.
Since December 2021, Hitcard has attracted investment from NewMargin Ventures founder Feng Tao, as well as major backers including Pop Mart, HongShan’s seed fund, and China Literature. Earlier this year, founder Zhao Yunpeng told 36Kr that the company closed another financing round in the first half of 2024.
A serial entrepreneur in his early thirties, Zhao is also a longtime fan of designer toys and cards. Of the company’s five core team members, three have previously worked with him on other ventures.
According to Guosheng Securities, China’s trading card market reached RMB 26.3 billion (USD 3.7 billion) in 2024, making it the largest worldwide and the fastest-growing category within China’s consumer entertainment sector. The market is projected to expand to RMB 44.6 billion (USD 6.2 billion) by 2029.
Riding this growth and backed by capacity expansion, Hitcard generated RMB 400 million (USD 56 million) in revenue in 2023, an increase of more than 600% year-on-year. The company expects revenue to double again in 2024 while remaining profitable.
Analysts highlight three questions that will shape investor attention around Hitcard’s IPO:
- Who are the main buyers of trading cards?
- How can card makers reduce reliance on a single IP?
- And how can blind box sales be structured to remain compliant?
Taking a different path
Kayou, which controls more than 70% of China’s card market, rose quickly on the back of blockbuster IPs such as Ultraman, My Little Pony, and Ne Zha.
Hitcard has chosen a different approach. “Every IP has a rational limit of demand, and overproducing damages the brand,” Zhao said. Instead, the company signs a broad portfolio of IPs to spread risk while maintaining scarcity through limited runs and frequent product refreshes.
This year, Hitcard doubled its roster of licensed IPs to more than 60, approaching Kayou’s roughly 70. Its top-performing product in 2024 generated RMB 50 million (USD 7 million) in gross merchandise value, or about 6% of projected annual revenue, signaling a more diversified revenue base.
Its IP portfolio spans anime, designer toys, and film franchises, contributing about 40%, 40%, and 20% of sales, respectively. The company typically spends no more than three days developing a new product, caps production quantities on launch day, and rolls out about 10 new sets per month.
Craftsmanship is another point of emphasis. Four months ago, Hitcard introduced a 14-color printing press, surpassing the four-color machines used by most rivals. While some competitors use ten-color presses, few employ 14-color units for single-sided prints, giving Hitcard’s cards richer tones. It has also developed a plating process called “electroplated crystal gloss,” designed to enhance tactile and visual appeal.
To support this production model, Hitcard has built its own factories. It operates four plants in Longgang, Wenzhou, covering nearly 20,000 square meters and producing more than 95% of its output. Each plant cost between RMB 50 million and RMB 100 million (USD 7–14 million), making factory investment its largest expense, above licensing fees.
This craftsmanship has shaped its customer base. The core users are young women aged 18–28, overlapping with Pop Mart’s audience. By contrast, Kayou’s teen-focused lineup helped drive RMB 10 billion (USD 1.4 billion) in 2024 revenue, suggesting that Hitcard’s market may be more limited in scale.
Becoming the “Pop Mart of cards”?
A key driver of trading card demand has been live streams of blind box openings, where hosts reveal packs for viewers in real time, often triggering impulse purchases. Douyin has become the main channel for such streams, reportedly accounting for more than 60% of Hitcard’s sales.
Offline channels are also gaining ground. Key account retail partners now make up 40% of sales, up from about 25% last year. Zhao said this reflects a focus on customer experience, though he remains cautious about opening self-operated stores. “We’re not yet ready to design stores that meet our own expectations,” he told 36Kr.
Offline presence also matters for branding. Pop Mart, now synonymous with characters like Labubu, Molly, and Skullpanda, does not creates its own IPs but unifies its lineup through dedicated stores. If Hitcard wants similar staying power, it will need to weave its diverse IPs into a coherent brand story.
The company is also broadening its audience. In the second half of 2024, it introduced card products based on Renegade Immortal, Dao of the Bizarre Immortal, and Lord of Mysteries, which are popular with men aged 18–35.
Competition is intensifying, with bidding wars pushing up IP costs. While profitable, Hitcard’s high spending on design and production compresses margins, leaving less room to share revenue with licensors. To offset this, the company emphasizes its ability to reinterpret IPs and extend their relevance, which it argues strengthens its differentiation.
In 2024, Hitcard secured a licensing deal with Disney, becoming its largest card licensee of the year. Zhao said the agreement was possible thanks to the company’s cash reserves. The partnership underscores its overseas ambitions: while international sales are still in the single digits, Hitcard aims to lift their share above 10%.
It has also formed partnerships with CyberAgent, the parent firm of Cygames, as well as Akatsuki and Good Smile Company in Japan, and is now targeting North America. Both markets are among the most mature for cards worldwide.
Barely three years old, Hitcard has shown that selling cards to adult consumers can be a viable business. Its next test is to convince investors that the model can sustain long-term growth.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Lan Jie for 36Kr.