Summary of Key Points
This news article discusses the dramatic reversal in the trendy toy industry within a year: Last year, Poppmart’s LABUBU vinyl plush toys were in such high demand that factories were working at full capacity, with sewing machines operating at peak efficiency. This year, however, an oversupply has occurred due to the large number of new factories entering the market. Nevertheless, leading trendy toy brands and high-end manufacturing facilities still have a surplus of orders. The industry is moving towards higher quality competition through innovations in materials and production processes, intelligent capacity upgrades, and the establishment of industry standards, shifting from being low-cost contract manufacturers to gaining more control over the industry.
Detailed Analysis
1. The Wild Ride of Vinyl Plush Toys: From Scarcity to Surplus
Last year, LABUBU sold 10 million units per month, leading to shortages, and there were doubts about whether Poppmart was controlling production or if capacity was insufficient. Wang Ning responded that demand exceeded supply. This year, small and medium-sized factories in Dongguan and Yangzhou have stated they are no longer producing vinyl plush toys due to the intense competition in the market.
Why such a rapid change? Firstly, the popularity of LABUBU faded in the second half of 2025. Secondly, too many new companies entered the trendy toy industry, leading to an oversupply.
However, high-end factories are still in demand because they can produce high-quality products and have the ability to select IP partners (such as Disney and Tencent). Some even expand production capacity when needed.
2. Innovation in Materials and Production Processes
Innovation in trendy toy materials doesn’t happen from scratch but often involves learning from other industries. Factories draw inspiration from the clothing and home textile sectors—for example, they upgraded from using mink fur to golden mink for long plush fabrics. They also provide feedback to suppliers about high-quality materials to better meet market demands.
IP demand has also driven innovation in production processes. For instance, the company Duolang Culture’s “Gululu Elf Deer” required real flowers to be embedded in its antlers. Traditional resin materials were brittle and expensive; after four months of experimentation with transparent ABS, they found a solution that allowed the flowers to bloom at high temperatures without cracking. Small brands are using traditional materials like denim and linen to create unique designs.
3. Improving Efficiency in Capacity Delivery
A major challenge in the trendy toy industry is the variety of non-standard products. Each toy has its own unique features, requiring new molds and production processes. Traditional factories struggle to keep up with the fast-paced demand. High-end factories are addressing this through automation, AI-assisted design, and flexible production systems. For example, a leading company in Dongguan invested 200 million yuan to build a smart factory that can quickly switch between producing different products using the same equipment, potentially generating an annual output of 500 million yuan.
4. From Following Others to Setting Rules: China’s Growing Influence in the Industry
Previously, Chinese trendy toy factories relied on foreign clients to set standards, often producing low-quality, inexpensive toys. Now, however, Dongguan has established industry standards that have impressed even demanding Japanese customers. Some factory owners refuse to produce low-quality products, saying that the quality of their work cannot be compromised anymore.
This marks a significant shift; Chinese trendy toy manufacturers are no longer just contract manufacturers but are starting to define industry norms—everything from materials and production processes to quality standards.
Conclusion
The competition in the trendy toy industry has shifted from focusing on low prices and speed to innovation and quality standards. While small and medium-sized factories face challenges due to imitation, leading companies and high-end facilities are driving the industry towards higher quality development. China’s trendy toy industry is transitioning from being a follower to a leader in the global market.