“While the economy is sluggish, it continues to grow and generate consumption,” wrote Ivan Su, a senior equity analyst for Morningstar. “This increasing growth in China will help lead to the creation of and investment in more home-grown IPs.”
He said IPs were targeting consumers with rising incomes who desired social belonging and esteem. He added that consumers accustomed to spending on IPs made up a growing share of the population.
For toys, China’s IP sales were projected to grow at an annual rate of 17.2 per cent through 2029 after reaching 7.6 billion yuan (US$1 billion) in 2024, investment bank CICC said in a report last week, citing data from China Insights Consultancy.
Over the same time period, global IP growth was expected to reach 8 per cent a year after hitting 525.1 billion yuan in 2024, CICC said, adding that China and Southeast Asia were expected to contribute nearly half of the industry’s total growth over the next four years.
But analysts said the industry’s long-term momentum also depended on companies’ ability to keep their IPs hot after the initial buzz faded.
Pop Mart is an illustrative recent example. The Beijing-based toymaker behind the popular “Labubu” dolls saw its shares plunge nearly 15 per cent last week after restocking its latest Labubu 3.0 series. The move sent resale prices tumbling temporarily and raised concerns that the company’s rapid growth was cooling.
