China’s Trend Toy Market Enters New Era, IP Value Replaces Scale as Core Valuation Driver

Shanghai, June 10 — Trend toys have become social currency for Generation Z, with queues forming at vending machines in prime urban districts and related topics trending widely on social media. A major recent shareholding move by a high-profile investor in Pop Mart has drawn fresh attention to the sector, which is undergoing profound restructuring as intellectual property overtakes distribution scale as the key benchmark for corporate value.

The industry has moved beyond the earlier phase of rapid, unsustainable expansion. Market data from Frost & Sullivan shows China’s trend toy retail turnover rose from RMB 20.7 billion in 2019 to RMB 58.7 billion in 2024, representing a compound annual growth rate of 23.2%. Projections indicate a further CAGR of 20.9% between 2024 and 2030, with the market expected to reach RMB 213.3 billion by the end of the period.

Growth is highly uneven. Leading players report strong gains: Pop Mart’s first-quarter revenue growth stands at 75–80%, with domestic sales up 100–105% and steady expansion across overseas markets. TOP TOY’s filings show revenue rising from RMB 1.461 billion in 2023 to RMB 3.587 billion in 2025, while recorded 30% year-on-year growth to RMB 2.913 billion in 2025. Emerging brands such as also post rapid rises, with quarterly revenue of RMB 177 million, up 39.4% month on month.

Smaller studios face mounting pressure from rising development, licensing and marketing costs, prompting consolidation across the sector. Industry dynamics have shifted into three tiers: brands with proprietary IP control pricing and margins; retail platforms excel in distribution and supply chains; and smaller manufacturers rely on licensed IP and operate on thinner margins.

Heavy dependence on third-party licensing creates structural risks. For TOP TOY, licensed and external IP accounted for 94.3% of product sales in 2025, with licensing expenses rising steadily. Analysts note that many channel-focused operators lack equivalent strength in original IP creation, leaving a clear market gap for home-grown characters.

Overseas expansion has become a core strategic priority. Pop Mart now operates in more than 80 countries and regions, with international revenue exceeding 40% of its total in 2025. TOP TOY runs 355 global stores, including 39 overseas outlets, following the launch of its global strategy in late 2024.

Industry forecasts point to two further waves of growth: continued penetration in lower-tier domestic cities and sustained global expansion over the next three to five years. China is evolving from a manufacturing base into an IP exporter, with trend toys serving as a key vehicle for cultural outreach.

Investment activity has intensified. KPMG data records 20 financing deals in 2025, totalling approximately RMB 1.7 billion, with larger transactions becoming more frequent. Capital is favouring scaled, growth-oriented businesses, while advisers emphasise long-term value creation through digital transformation, organisational development and integrated IP and content strategies.