HW&MBX Ordering Rules

Ø Rule Content:

- Order quantities are tracked and managed independently by product code.  

Ø Rating System:

- Ratings are classified into three tiers: Low, Medium, and High.

- Customers can rate new products on the product details page.

- The system will assess the popularity of the products based on the order quantities and adjust the ratings accordingly.

Rules for Adjusting the Number of Long-Term Customers' Orders

The quantity of each dashes of orders from long-term customers will be dynamically adjusted based on the product rating:

Ø If the rating of the next dash is "low", the order quantity will be reduced to half of the previous dash;

Ø If the rating of the next dash is "medium", the order quantity will remain unchanged;

Ø If the rating of the next dash is "high", the order quantity will be doubled compared to the previous dash.

Ø The minimum order quantity is 160 pieces when determining the rating.

Notes:

Ø Each product code is evaluated independently;

Ø The order quantity can be halved step by step to the minimum value (for example: 640 pieces → 320 pieces → 160 pieces);

Ø If doubling exceeds the maximum quantity limit, then the maximum quantity shall be implemented;

Ø The new rules apply to the following product codes.

Requirements and rights protection for long-term customers:

1. Continuous ordering requirement

Long-term customers are required to continuously order every dashes of the products they are interested in. Taking FPY86 as an example, there are a total of 8 batches throughout the year, and each product code must be ordered consecutively. If a dash is missed, they will lose the qualification to order the subsequent dashes for that year and need to start ordering from the lower/middle dashes to regain the qualification. The minimum order quantity is 160 pieces.

2. Priority Ordering Right

We will introduce the "order protection period" mechanism on the website. When popular new products are launched, they will automatically enter a protection period. During this period, only long-term customers have the priority to order. The protection period will last until we complete negotiations with long-term customers and place orders. After that, temporary customers can view the commodity prices and place orders.

3. Priority Guarantee

For popular products, we will give priority to ensuring the order quantities of long-term customers, ensuring a stable supply.

4. Priority Right to Information

Furthermore, we will grant long-term customers the priority right to access the Mattel’s next year's plan, enabling them to obtain relevant information in advance and make appropriate plans.

5. More competitive prices

The prices of popular products for long-term customers will be approximately 20% lower than those for short-term customers, thereby more effectively safeguarding the rights and interests of long-term customers. The prices for general and unpopular goods, long-term customers and short-term customers are the same.