Selling Dolls and Water NFT Authorized Products Pudgy Penguins and Ape Water Enter the Retail Industry

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Blue-chip NFT Merchandise Enters Retail Channels
Pudgy Penguins Targets the Children’s Toy Market, Collectors Have the Opportunity for Authorization
Bored Ape Can Water Now Available in Convenience Stores
Pudgy Penguin NFT Holders Profit from Physical Product Sales
Early Founders Exit, New Founder a Legendary Teenage Serial Entrepreneur
Strong Challenges in Entering Physical Channels
The NFT market has experienced a turbulent three years, with ups and downs and constant oscillation in a bear market filled with accusations of rug-pulling and teams being accused of scamming investors. The licensing and development of peripheral products for NFT avatars were once a hot topic, and currently, there are only two projects that have successfully produced and placed their products on mainstream retail shelves: Pudgy Penguins and Ape Water. The former has successfully entered the children and teenagers’ toy market, while the latter has placed its mineral water on the shelves of convenience stores.

Pudgy Penguins is considered an outlier in the NFT industry. While Bored Apes and other blue-chip NFT holders were busy staking their tokens to earn money, Pudgy Penguins shifted the market towards physical retail. Pudgy Penguins, as the name suggests, features cute and appealing penguin plush toys, which are highly attractive to children among the various avatar NFTs. The chubby and adorable penguin design, with its simple lines and casual clothing, is loved by both adults and children.

Pudgy Penguins’ plush penguin toys have been gradually stocked in Walmart, the largest retail chain in the United States. With a market value of $542 billion, Walmart is second only to e-commerce giant Amazon, which has a market value of $1.9 trillion. Pudgy Penguins announced last month that it would also be available at another US department store, Target (NYSE: TGT). Target has a market value of $67 billion and ranks 11th among US retail channels. The main customers of Pudgy Penguins are young people aged 16 to 24, both male and female, known as Y2K teenagers.

PMI Kids World, a toy manufacturer specializing in collaborations with gaming brands, has developed the second series of Pudgy Penguins toys, which are now stocked at Walmart and Target. Target recently added six different styles of Pudgy Toys to its shelves. The designs of these penguins are all authorized by NFT avatar holders. Each Pudgy Penguins toy contains a QR code that links to the penguin characters in the Pudgy World Web3 game. In addition, Pudgy World is an online adventure game developed by blockchain company zkSync Era. Players can customize their penguin characters and participate in various quests. The physical plush penguin toys from Pudgy Penguins have reportedly sold over 1 million units. They have also started collaborating with South Korea’s Lotte Market.

Ape Water recently joined the Thank Ape accelerator program, hoping to open the door for NFT licensed products in the food industry.

The once dominant Bored Ape series in the NFT community also began seeking ways to monetize their IP and enter the metaverse gaming market. However, the only company that successfully licensed and produced products featuring the ape avatar is Ape Water, a startup based in California. APE Water promotes its product as natural spring water from American mountains, with packaging and materials that are 100% made in the USA. Its distribution channels include 7 Eleven, Terrible’s, Green Valley Grocery, and others.

In terms of avatar designs, Bored Ape humanizes the ape, with expressions and accessories that may not be suitable for mass-market development. In contrast to the simple lines of Pudgy Penguins, the detailed representation of the ape in Bored Ape’s products poses a major challenge in packaging design.

Through the OverpassIP product licensing platform, Pudgy Penguin NFT holders can apply for NFT IP licenses to develop new Pudgy Toys production lines. Pudgy Penguin holders receive a 5% royalty from licensed plush penguin toys. Pudgy Penguin NFT holders not only own the NFTs but also receive continuous income from the real-world products.

The early founders of Pudgy Penguins were Cole Villemain and Clayton Patterson. Cole Villemain was accused of making empty promises and failed to deliver on token, gaming, and educational book projects while pocketing funds for himself. He was voted out and later sold his company shares to Luca Netz.

In April 2022, Luca Netz acquired Pudgy Penguins for 750 ETH (equivalent to $2.5 million at the time). This 25-year-old entrepreneur made the cover of Forbes magazine with the headline “Furry: Forget Bored Ape, Thanks to Walmart for Signing This Non-Flying Plush Bird, the 25-Year-Old Entrepreneur Created the Hottest and Cutest NFT Series in the World.”

Luca Netz’s rise to success is quite mysterious and inspirational. At the age of 16, he was homeless, sleeping on other people’s couches in Los Angeles. Coming from a poor family, he dropped out of high school but started his first company at 18, selling fake gold necklaces on Shopify, which made him a millionaire at 19. He invested in the Von Dutch leisure cap brand and has a good taste and experience in the retail market and e-commerce. Before taking over Pudgy Penguins, he served as the marketing director for Gel Blaster toys and has excellent PR skills, making it easier for him to enter retail channels.

As for the early founders who exited, what are they up to now? Cole Villemain (X @ColeThereum) recently announced on X that he is selling his penguins for $8 million.

The US retail industry is facing unprecedented inflationary pressures, with rising transportation, warehousing, and manufacturing costs. In recent years, due to poor security, many department stores have chosen to close their stores due to endless robberies. Combined with supply chain and product promotion issues, Pudgy Penguins founder Luca Netz is preparing to expand into the Korean and Japanese markets in Asia. He may face new challenges in these regional economies. The anime and toy markets in Japan and Korea have long-standing and loyal supporters. It remains to be seen whether Pudgy Penguins can establish a foothold in these markets.

Ape Water
Pudgy Penguins


Further Reading
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NFT Market Crashes Across the Board! Blue-chip Projects Decline Over 30% Monthly, KOLs Ask: Who’s Trading NFTs in a Bull Market?