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2-Cent Rant

Are Hello Kitty Plush Toys A Good Investment In Singapore?

Here is why Hello Kitty plush toys could easily outperforms SGX stocks in the short-run

 

The Hello Kitty mania is back on our shores with the opening of the 24/7 Hello Kitty Orchid Garden Café at Changi Airport. A limited edition Hello Kitty mascot was specially made for the Singapore outlet. Fans, as well as the curious, will be clamoring for the 500 Hello Kitty plush toys, which dons a purple dress with polka dots and – gasp – it is the only edition in the world with two bows.

To no one’s surprise, the Facebook page of the café announced on Thursday, just hours after the opening of the café, that all plush toys were sold out. It left many Singaporeans heartbroken and even incurred the wrath of some diehard fans, but definitely delighted scalpers.

Having observed the Hello Kitty craze periods over the past few years, we are starting to seriously consider flipping Hello Kitty toys instead of properties, and master the fine art of Hello Kitty trading.

FB Page Hello KittySource

Before we add Hello Kitty plush toys into our portfolio, we have to weigh the pros and cons of this investment.

Market Disequilibrium

On Carousell, people who managed to get their hands on the plush toy for its retail price of $49.90 are already starting to look for keen buyers to exploit cash in.

Currently, the selling price range from $120 – $250, while buyers hope to buy them at a range of $60 – $90. This discrepancy (between how much buyers are willing to pay and how much sellers are willing to sell) will tend to leave buyers with empty pockets. Being limited edition and marketed as the only Hello Kitty in the world with two ribbons, a premium markup price would most certainly have to be placed on the plush toys that is likely to end up with your other collected Hello Kitty toys from McDonald’s in the storage boxes of your store room.

Possible Cash Cat Cow for Scalpers

Source

The management of Hello Kitty Café Singapore stated explicitly that there are “no plans to restock the existing Hello Kitty plush toy”. This is good news for scalpers but bad news for genuine fans.

By restricting the supply of this plush toy (possibly the first of its range), collectors who missed out on the opportunity to buy it would have to pay a lot more initially, and possibly cover them up should they be lucky enough to attain a complete set in future. No doubt, scalpers would be laughing their way to the bank. Now that gives us an idea to earn a few more blue Yusof Ishaks!

Since management has already hinted at a possible range of “upcoming new designs”, we are sure that the long queue outside the café will form whenever a new design comes in, creating a seasonal craze. Scalpers and genuine collectors will be keeping their eyes peeled on news of the next plush toy.

Will It Really Bring in Significant ROI (Return On Investment)?

The market for collectibles hinges on emotions like nostalgia. Collectibles are priced based on their market value (what keen buyers are willing to pay), instead of their intrinsic value (how much they are truly worth).

In other words, high prices are usually based on sentiment projected upon it by interested buyers, which differentiates the collectible from a pile of junk. The tricky part of ensuring that the Hello Kitty plush toy remains valuable is the maintenance of it. If the box is damaged, stain found on the plush toy, or a hole in the purple polka dot dress, the value of the toy would diminish.

How Does This Compare to McDonald’s Hello Kitty Craze in 2013?

To get a gauge of how crazy this Hello Kitty craze could get, let’s take a look at a previous craze back in 2013.

Cost of McDonald’s Hello Kitty during craze (2013) $5
Typical range of resale price of McDonald’s Hello Kitty during craze (2013) $70 – $300
Price of McDonald’s Hello Kitty on Carousell (Today) $8 – $10

 

Cost of Orchid Garden Hello Kitty (Today) $49.90

 

Price of Orchid Garden Hello Kitty on Carousell (Today) $120 – $250

 

Future price of Orchid Garden Hello Kitty

 

???

 

It seems braving the elements (i.e. the heat and haze) to queue for 4 hours to purchase Hello Kitty from McDonald’s was a waste of time for those who did not cash in immediately when the craze was at its prime. Ultimately, whether the limited edition Hello Kitty plush toy(s) can become valuable collectibles in future will depend on its rarity and appeal in the market. Collectibles should be kept if there is genuine interest.

For the time being, we will stick to more conventional methods of investing. But we remain cautiously optimistic about adding “Hello Kitty” into our portfolio in the future.

Top Image Source: DollarsAndSense.sg

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