A shopper takes a snapshot of MarveLab's collectible toys at an outlet in Beijing. [Photo/China Daily]

As China's collectible toy market continues to gain momentum, the sector is expected to approach a turning point where artificial intelligence is poised to redefine how consumers engage with trendy toys, said an industry executive.

"Past collectible toys relied on aesthetics and scarcity to make people willing to buy, share and collect them," said Jing Linyan, cofounder of domestic AI collectible toy manufacturer MarveLab.

"But we believe future collectible toys will take a different path. They won't just make you happy in a single moment. More important, they will keep you engaged, interacting and looking forward to what comes next over a much longer period of time," Jing said.

The year 2025 is being talked about as a banner year for trendy toys, with brands such as Pop Mart enjoying heavy exposure on social media platforms.

Data from market research company AskCI Consulting show that China's collectible toy market expanded rapidly to 76.3 billion yuan ($11.03 billion) in 2024 from 22.9 billion yuan in 2020, a compound annual growth rate of 35.11 percent. Figures from Frost & Sullivan also estimate that the market size would have further grown to 92.6 billion yuan in 2025.

According to Jing, the experience offered by traditional collectible toys often peaks at the very beginning — when consumers unbox the product, take photos and share them online — before the item settles into the role of a static display.

"Static figurines or accessories are perfectly valid, and many people like them. But as collectible toys become more abundant, users' expectations are shifting from 'looking' to 'playing', and from 'owning' to 'interacting'," he said.

As a result, the limitations of traditional collectible toys are becoming more apparent. "It's difficult for them to extend the user experience over time," Jing said.

"So we believe that static collectible toys have reached their ceiling, and AI collectible toys represent the second half of the industry."

In contrast, Jing argued that AI collectible toys will help address a different question: whether users will grow tired of them.

"AI collectible toys can combine trendy aesthetics and strong IPs, while using AI to give characters personality, memory and the ability to grow," he said. "This allows collectible toys to evolve from static objects into living characters that can interact with users over the long term.

"In the past, repurchase was driven by scarcity. In the future, it will be driven by the vitality of the character itself."

Official data show that China's AI toy market reached about 24.6 billion yuan in 2024 and is expected to have grown to 29 billion yuan in 2025. The growth is further supported by a central government action plan released in November, which listed collectible toys as a priority consumption category for the first time, targeting the segment to exceed 100 billion yuan by 2027.

"AI collectible toys are by no means about simply layering AI functions onto static figurines; they are about enriching the entire content ecosystem," Jing said, adding that rather than treating AI as a stand-alone function, the company positions it as the engine behind a character.

"If a product is described as 'like a real person', with its own temper and personality, that is the experience collectible toy users truly expect," Jing said.

"Moving AI away from a singular focus on efficiency and toward giving characters vitality is why we talk about AI collectible toys, not AI hardware," he added.

The company recently completed an angel funding round, led by Jinqiu Capital, with co-investment from Shoucheng Holdings. Wave Capital acted as the exclusive financial adviser.

The company said the funds will be primarily used to further build out its content ecosystem through regular content updates, and to expand its product portfolio around its core character, RAGUS & WHITE, by exploring diversified product forms, gameplay innovations and potential collaborations with established artists to enrich its character network.