Editor's note: China has long been known as the "factory of the world," with the Made-in-China label often associated with cheap and low-quality products. However, this perception is now becoming a thing of the past. Driven by rising R&D investment and consumption upgrades, many Chinese manufacturers are advancing up the value chain and gaining ground in the high-end market. Xinhua hereby presents a series of three stories that examine upgrades in the country's manufacturing sector. The following is the first piece in the series that explores how the toy industry is reinventing itself to go global.

BEIJING - Paris' Louvre Museum has become the latest hot spot for toy collectors, with enthusiasts lining up for exclusive designer toys from Chinese pop culture brand POP MART, featuring its iconic characters like Labubu redesigned after Western art masterpieces such as the Mona Lisa, Van Gogh's self-portrait and Manet's The Fifer.

POP MART opened a 60-square-meter store near the museum last summer as part of its overseas market expansion, drawing fans from across Europe. Victoire, a POP MART fan from France, has been collecting the brand's blind box figurines for a year and a half.

"I'm quite fascinated with the concepts the blind boxes contain. They are incredibly adorable and colorful. They bring joy to the inner child within me," the lady in her 20s told Xinhua.

For decades, China has been known as the "factory of the world" for low-cost products. POP MART's designer toys stand as a prime example of a new wave of innovative Chinese products, revolutionizing global perspectives on "Made in China" within the toy industry.

DESIGNER TOY ON A ROLL

With its original intellectual property (IP) and innovative designs, Beijing-based POP MART has quickly risen in the burgeoning blind box market, where primarily young consumers are spending heavily on collectible figurines shrouded in mystery.

The brand operates over 500 retail stores and nearly 2,500 Robo Shops worldwide. With the help of these stores and e-commerce platforms, its products have been sold in nearly 100 countries and regions.

POP MART's revenue more than doubled last year to 13 billion yuan ($1.8 billion), and its adjusted net profit surged nearly 186 percent year-on-year to 3.4 billion yuan. Sales in Hong Kong, Macao and Taiwan, together with overseas markets, soared 375 percent to nearly 5.1 billion yuan.

Nan Fang, a Chinese artist based in Paris for over a decade, has witnessed firsthand the rise and the success of Chinese designer toys in the overseas market. "POP MART products are far more than merely toys. These items are, in essence, vibrant artworks imbued with life and spirit," she said.

Besides POP MART, WoFactory in China's southern city of Dongguan, China's toy manufacturing heartland, also witnessed success in the designer toy market.

It has so far received orders totaling over 100 million yuan for merchandise based on characters from "Ne Zha 2," the blockbuster animated sequel that has sparked a nationwide craze for IP derivatives and a surge in demand for Ne Zha-themed merchandise.

Following a strong start to the year, WoFactory president Sun Wenke expressed confidence that robust sales growth will continue throughout the rest of 2025.

Dongguan is home to over 4,000 manufacturers and nearly 1,500 supporting enterprises in the designer toy industry, producing nearly 85 percent of China's designer toys and a quarter of the global animation-related merchandise.

Nationwide, China's designer toy industry is poised for robust expansion in the coming years. Industrial data showed that the market size of China's designer toys is expected to exceed 110 billion yuan in 2026, nearly doubling from around 60 billion yuan in 2023 and taking up around 20 percent of the global designer toy market.

Sun Wenkai, a research fellow at Renmin University of China, believes that an efficient industrial chain, huge domestic demand, decades of production experience, and the rise of Chinese designers who understand cultural diversity are the key drivers behind the rapid development of China's designer toy industry.

EMBARKING ON AI WAVE

As China's technological capabilities expand with the rollout of more AI models, many toy makers are increasingly leveraging AI as a powerful tool to enhance product interactivity and overall appeal.

One of the companies riding the wave of AI innovation is Shanghai-based startup FoloToy. Using Chinese AI chips and the popular chatbot DeepSeek, FoloToy has turned fluffy animal-shaped toys into interactive English tutors and daily companions for children, according to Wang Le, the company's founder and CEO.

FoloToy started developing AI-integrated toys in 2023 and has sold more than 20,000 units through e-commerce platforms such as Tmall and Amazon in 2024.

In the city of Yiwu, East China's Zhejiang province, a major global trading hub for small commodities, toy retailers have also seen a surging demand for AI-powered toys.

"We've designed Arabic-speaking smart dolls for the Middle Eastern market, with about 70 percent of our recent orders coming from the region," said Sun Lijuan, owner and designer of a local toy store.

Yiwu's highly efficient industrial chain enables new products to move from concept to production in as little as a day, giving manufacturers a sharp competitive edge.

Thanks to mature industrial clusters, intellectual capital and the push for brand building, China has built a competitive edge in high-end manufacturing and brand operations, said An Zidong, professor of economics at Renmin University of China.

"Driven by structural changes in the labor force, consumption upgrades and technological progress, China's manufacturing industry is undergoing a profound transformation toward high-end, brand-oriented and intelligent development," An added.