Trendy toy and cultural creative stores are witnessing an "ice and fire" duality of starkly contrasting operating performances.

Unconsciously, a large number of trendy toy and cultural creativity stores have occupied the floors with the largest foot traffic in the core business districts of major cities. Brands including Pop Mart, TOP TOY, X11, Cooler Toys, The Green Party, 9UM, Copper Master, Zhu Bingren Copper and many others are competing on the same track.

Are these increasingly numerous and larger trendy toy and cultural creativity stores actually profitable? Except for Pop Mart, the absolute industry leader, and TOP TOY which is backed by Miniso, most of the remaining brands have unsatisfactory profit performance. Among them, 9UM, a subsidiary of Chenguang Stationery, lost more than 80 million yuan last year; Copper Master saw its performance plummet by over 95% in the first half of this year.

The root cause is that the lack of IP support has trapped most trendy toy and cultural creativity stores in the quagmire of homogeneous competition. For trendy toy and cultural creativity brands without IP resources, the more and larger stores they open, the more dangerous their situation will be.

The Rise of Trendy Toy Stores

The concept of trendy toys did not even exist until Pop Mart became a smash hit.

This cultural trend, which originated from Europe, the United States, Japan and South Korea and spread via Hong Kong, has given China's toy industry an opportunity for industrial upgrading since around 2010.

Before that, China's toy industry was mainly concentrated in areas such as Chenghai, Guangdong. Despite its large scale, the industry was dominated by OEM exports, which fell entirely under the category of manufacturing foreign trade with low industrial value.

With the support of the trendy toy concept, IP has elevated ordinary toys to a cultural and creative industry, rapidly expanding their market imagination space.

As a result, trendy toy brands such as Pop Mart, KaYou, 52TOYS, and Bloks have risen one after another. Pop Mart launched LABUBU after its iconic IP Molly. The public's craze for trendy toys was transmitted from the consumer market to the capital market, creating a market value myth of up to 450 billion Hong Kong dollars for Pop Mart.

Subsequently, a large number of offline stores focusing on trendy toys sprung up like mushrooms. Brands such as Cooler Toys and The Green Party rose rapidly, occupying the prime floors with the largest foot traffic in the core business districts of major core cities.

In addition, a large number of related industries, seeing the market potential of trendy toy and cultural creativity collection stores, have entered this sector one after another. TOP TOY under Miniso, X11 under KKV, 9UM under Chenguang Co., Ltd., and Yuanlong Yuanqi launched by Yuanlong Yatu all belong to this type of business.

Last year, Kelly Wang, daughter of the founder of Xincheng Holdings, launched MITAKI, a trendy toy collection store brand. With the capital and industrial support from the Xincheng business group, she quickly completed the three steps of brand creation, store opening and listing.

As for the small and medium-sized trendy toy and cultural creativity businesses backed by internet companies and consumer brands, there are even more of them. A casual count shows that giants such as Alibaba and Bilibili have already dabbled in this field.

When you walk into any shopping mall, you can run into a trendy toy and cultural creativity store every few steps. Then the question arises, can these large stores make money? The answer may be beyond everyone's expectation.

The Industry's Polarized Situation

As the absolute leader in the trendy toy industry, Pop Mart has maintained a high business growth rate and profitability in recent years.

In the first half of 2026, Pop Mart (09992.HK) recorded an operating revenue of 171.73 billion yuan, a year-on-year increase of 23.8%, a net profit of 51.00 billion yuan, a year-on-year increase of 8.9%, and a net profit margin of nearly 30%.

Although Pop Mart's performance growth rate was lower than market expectations, which led to a sharp drop in its stock price a few days ago, this level of profitability is still in a league of its own across the entire trendy toy market. At the very least, there is currently only one Pop Mart in the market.

Backed by Miniso's huge supply chain system, TOP TOY relied on mature store operation experience and IP operation capabilities to achieve a substantial revenue increase to 35.87 billion yuan last year, but its profitability is not strong, with a net profit of 101 million yuan in 2025 and a net profit margin of less than 3%.

Below Pop Mart and TOP TOY, the entire trendy toy and cultural creativity store track is almost in a state of widespread losses.

The most typical example is 9UM, which has more than 800 stores and lost 8451.04 million yuan in 2025, with its loss amount increasing significantly compared to 2024.

Constrained by the limited imagination space of stationery and office supplies business, Chenguang Co., Ltd. originally planned to expand its market imagination space through the trendy toy and cultural creativity business of 9UM, by upgrading its geographical location, target customer groups, shopping methods and SKU categories. Unexpectedly, this business has dragged down the overall performance of the listed company significantly.

In 2025, Chenguang Co., Ltd. achieved an operating revenue of 250.64 billion yuan, a year-on-year increase of 3.45%, and a net profit attributable to shareholders of 13.10 billion yuan, a year-on-year decrease of 6.12%.

Copper Master belongs to a niche category in the trendy toy and cultural creativity market, and it was listed as early as March this year relying on its differentiated advantages. Unexpectedly, the profit warning disclosed a few days ago shows that the company's net profit in the first half of the year was 100-150 million yuan, a sharp drop of more than 95% compared with 30.2 million yuan in the same period of the previous year.

Yuanlong Yatu has suffered losses for several consecutive years, which has little to do with its trendy toy and cultural creativity store Yuanlong Yuanqi, and is mainly caused by the decline of its traditional cultural creativity business.

Chuangyuan Co., Ltd. plans to acquire Cooler Toys, but it will not acquire the whole company. Instead, it will include 31 profitable stores out of Cooler Toys' 300 stores in the planned acquisition scope. This special acquisition method can reflect the overall operating situation of Cooler Toys.

In the trendy toy and cultural creativity collection store industry, even the leading players are in such a situation, so the survival status of small and medium-sized brands is naturally not any better.

The Larger the Store, the Harder It Is to Make Profit

Looking back at the rise path of Pop Mart, the channel model of robot vending machines, which features low cost and wide layout, has made indelible contributions. It was not until recent years, from the perspective of brand development and user service, that Pop Mart set up a number of offline flagship stores in addition to its robot stores and e-commerce channels.

Among trendy toy brands, 52TOYS, which is the most similar to Pop Mart, has also generally adopted this channel strategy. After receiving investment from Ruyi Pictures last year, 52TOYS will get access to Wanda Cinema Line, a high-quality light channel resource.

However, trendy toy and cultural creativity collection stores prefer to open large stores in core cities and core business districts. With large store area and prime locations, low sales per unit area and high rent have become the biggest obstacles on the way to profitability for these brands.

In the early stage, trendy toy and cultural creativity collection stores had their own characteristics: Cooler Toys focused on trendy toys, The Green Party focused on accessories, and 9UM focused on stationery and cultural creative products.

But now, you can hardly see any differentiation when you walk into any trendy toy and cultural creativity collection store. They have similar store decoration styles, with several rows of shelves at the entrance filled with figurines and plush dolls, and many products may even come from the same brand or the same production line.

The rise of the trendy toy and cultural creativity market is mainly driven by its ability to meet the emotional value needs of young users. But emotional value is vulnerable to aesthetic fatigue. High homogeneity cannot arouse any desire to purchase.

Therefore, when you enter these spacious trendy toy and cultural creativity collection stores, you may occasionally see people taking photos and checking in, but the "bag-carrying rate" (the proportion of customers who make purchases) is not high, and the checkout counters are often empty.

Some people say that offline stores are mainly used to seize the brand's ecological niche, and sales are mainly completed online. It is undeniable that this is the case for Pop Mart and the Miniso + TOP TOY system. But the products of ordinary trendy toy and cultural creativity stores are more likely to be drowned out on the internet.

Once the store inventory cannot be cleared in time, it will not only affect the operating efficiency and reduce the value of inventory, but also damage profitability. Although trendy toy and cultural creative products are not short-life products, the popularity of IP fades quickly. Yuanlong Yatu stated in its financial report that the value of some cultural creative products declined due to the expiration of event IPs, which affected the performance of the listed company.

IP Is the Core

In just over a decade, the trendy toy and cultural creativity market has gone through the whole process from birth, rise, frenzy to decline rapidly with the support of IP and capital.

After the bubble burst, the problem that the market should face up to is that in the large trendy toy market, what is the core of competition? It is not products, not channels, not even brands. There is only one core — IP.

For people who do not know about LABUBU, it is just an ordinary plush toy. With the current supply chain level, a large number of OEM factories can easily replicate such products.

As long as you own top-tier IP, products can be sold easily. Whether you have sufficient channels seems not that important in the trendy toy market. This is the fundamental reason why many top trendy toy brands can build their own channels entirely on their own capabilities.

For Pop Mart, the market pays more attention to how long Molly and LABUBU can remain popular, and what the next hit IP will be. As for the company, it can indeed rely on its industrial accumulation and IP reserve pool to improve the success rate of creating hit products, but this is not always effective, and there are still many uncertainties.

The reason why trendy toys are different from ordinary toys lies in IP. Therefore, the entire trendy toy market should shift its focus to the core element of IP.

Even if most companies cannot incubate IP independently like Pop Mart, as long as they can rely on licensed IP such as Ultraman, My Little Pony, and Disney series like KaYou, Bloks and 52TOYS do, they can also gain a firm foothold and accumulate strength to invest in self-developed IP in the long run.

The stores of Miniso and TOP TOY are filled with products of various licensed IPs, but they have never stopped exploring mature IP operation experience, nor have they given up the cultivation of self-owned IP.

The biggest strategic misjudgment in this market is to put the business focus on opening stores. For trendy toy and cultural creativity stores that lack IP capabilities, the more stores they open and the larger their scale is, the faster they will collapse.

This article is from the WeChat Official Account "Zebra Consumer" (ID: banmaxiaofei), written by Chen Biting, and published with authorization from 36Kr.