After crossing the river with LABUBU, Qimeng Island has "come ashore" and opened a store.

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On the B1 level of Beijing Hopson One, Qimeng Island's first offline store has recently opened.

Qimeng Island is one of the most vocally aggressive players entering the trendy toy and soft vinyl plush market this year, and is also, apart from Pop Mart, the only listed trendy toy company in the capital market centered around IP creation and operation, figurines, and soft vinyl plush.

The change originated from a business transformation of a US-listed company.

In March this year, adult interest online learning service provider “QuantaSing” announced its acquisition investment in trendy toy brand Letsvan, acquiring 61% of its equity for 235 million yuan and completing consolidation.

Subsequently, at the end of August, the company achieved full ownership of Letsvan and simultaneously refreshed its Chinese brand name to “Qimeng Island.”

In November, the company officially announced its divestiture from the online education business and changed the listed company’s name to “HERE Qimeng Island,” marking its formal all-in on trendy toys.

The trendy toy market is still highly fragmented and continues to grow, with competition not being a zero-sum game. For example, Pop Mart, the leader, only holds 10% market share in China’s toy market.

There is still plenty of room for exploration beneath LABUBU.

In the third quarter, Qimeng Island’s trendy toy-related revenue was 127 million yuan, a quarter-on-quarter increase of 93.3%, exceeding previous performance guidance, with gross margin rising by 6.5 percentage points to 41.2%.

As the industry’s recognition of IP value deepens, channel partners and manufacturers are also striving to develop their own IPs, making competition increasingly fierce.

For newcomers represented by WAKUKU, after achieving breakthroughs from scratch, they still face a long and arduous growth journey.

Trendy Toy Playbook

From an external perspective, QuantaSing’s transformation to Qimeng Island seems swift and aggressive. But if you review the past year’s developments, every step of the deal was built upon phased achievements.

In 2024, Letsvan launched the WAKUKU IP for the first time.

This “wild” little boy with freckles, an irrepressible smile, and joined eyebrows has been viewed by outsiders as similar to the popular LABUBU in terms of appearance, marketing path, and even its "ABB" style name.

This attracted QuantaSing, which had already been seeking transformation opportunities within major consumer categories. When the WAKUKU’s first soft vinyl plush product was launched, both sides reached a partnership.

QuantaSing’s then-CFO, now Qimeng Island CFO Xie Dong, told Xinfeng, “Back then we signed a 'minority equity investment + acquisition option' transaction structure.”

He further explained: “At the time, we considered that, if it went beyond our capabilities, we shouldn’t hinder the team or add burdens. If the team could find better resources, we as minority shareholders would welcome it.”

However, operationally, Chairman Li Peng quickly secured support from Lehua Entertainment founder Du Hua.

In December 2024, Lehua-affiliated companies and Letsvan jointly established the joint venture “Yuhuadongxing (Beijing) Cultural Development Co., Ltd.,” with each holding 51% and 49% respectively.

Afterward, WAKUKU gained massive exposure through a series of celebrity collaborations: products placed in the hit drama “Evernight Galaxy,” lead actress Yu Shuxin published an unboxing video, Ding Yuxi recommended it on Weibo, and Jia Nailiang's daughter Tianxin sang the namesake children’s song.

Celebrities such as Zhang Ruonan, Qi Wei, Cheng Xiao, Wu Xuanyi, as well as Olympic champions Quan Hongchan, Chen Meng, all shared related content. Du Hua even presented the product to Beckham, further expanding top-level exposure channels.

At that time, Qimeng Island was not fully prepared to handle such a massive influx of traffic.

Xie Dong recalled: “Letsvan was originally small in scale, with plush output less than 10,000 units early in the year. In February, when the hype suddenly surged, the supply chain couldn’t keep up and all channels were out of stock.”

The “out-of-stock” scarcity, together with “celebrity endorsement” topics, further boosted market fever, then with channel support from MINISO saw another round of explosive sales.

In March, WAKUKU Panda Clip was released at Beijing MINISO LAND Store No. 1, achieving the second highest daily sales in the store’s history, sold out within 120 minutes of launch.

Two months later, WAKUKU collaboration products launched at offline MINISO LAND stores in Shanghai and Nanjing, breaking single-day sales records.

In July, Qimeng Island replicated WAKUKU’s success for its exclusive third-party signed IP “SIINONO,” successfully debuting at MINISO LAND.

Xie Dong said: “After accomplishing this, we announced the 100% full acquisition and merger of Letsvan.”

The post-merger business integration has now been basically completed.

Original Letsvan founder Zhan Huiyu serves as Qimeng Island director and CEO, fully responsible for product and IP, marketing, brand, sales, and other related business.

Over the past year, Qimeng Island has gradually completed supply chain building, organization structure sorting, online and offline channel expansion, brand refresh, and the initial launch of overseas sales channels.

The WAKUKU 3.0 series “Instant Win Mode” released in early December is still in rapid supply chain and frontend sales growth stage, and is expected to eventually sell hundreds of thousands of units.

By the end of this year, Qimeng Island expects to achieve a capacity of about 400,000 sets or more than 2 million pieces, essentially matching its business plan.

“We can say up to now, Qimeng Island has already built the so-called ‘foundation for a new journey’,” Xie Dong said.

The “Publishing Power” Era

The similarity in WAKUKU and LABUBU’s paths is not by chance.

Xie Dong told Xinfeng frankly that Qimeng Island studies successful cases in the industry and extracts replicable patterns: “Many seemingly accidental hits have summarizable methodologies behind them.”

He added: “We continuously accumulate data and experience in our operations, constantly iterating Qimeng Island’s own IP cultivation system.”

More importantly, the LABUBU phenomenon itself pointed the way to structural growth in the trendy toy industry.

It not only sparked explosive growth in the soft vinyl plush category, validated the delivery efficiency of livestreaming and short video channels, but also expanded the imagination of trendy toys as a ‘social currency’.

Trendy toys are shifting from a niche secondary market hobby to a mass consumer good that embodies emotional value.

The new generation of entrants is therefore more determined to focus on proprietary IP, showing stronger traffic acquisition and content-shaping awareness.

For example, SIINONO's unique “makeup” look is widely copied by self-media, becoming a popular makeup tutorial on Xiaohongshu; WAKUKU is frequently exposed through the China Open, Beijing Fashion Week, Golden Rooster Awards, and other major events, strengthening brand awareness.

Against this background, celebrities with certain fan bases triggering initial traffic booms remain a way for new IP to “break out.”

After WAKUKU, many faster-acting players have appeared.

Emerging trendy toy brand AYOR TOYS began investing in celebrity resources and strengthening social marketing from its founding in June. Within three months, its IP ShyShy Rabbit’s sales exceeded one million units.

The founder further stated that since the global ambassador Tian Xuning’s announcement, AYOR TOYS has had a day every month when online all-channel sales surpassed Pop Mart.

TNT Trendy Toys announced Bai Jingting and Ouyang Nana as global novelty ambassadors in August and September respectively. HEYONE Heiwan also announced Hou Minghao as its spokesperson and launched a co-branded limited gift box.

With a massive supply of IPs, the key to victory is no longer single product design but publishing capabilities and user operation efficiency.

The ultimate winners will be brands that can precisely reach the general population and keep engaging with them.

This explains why Qimeng Island is currently launching self-operated stores as an important carrier for ongoing brand exposure and experiential marketing.

As the value of the “publishing” link increases, more and more industry players with platform or resource advantages are accelerating their entry and deeply participating in IP operations.

For example, Yuewen, MINISO, X11 and others have laid out their own IP matrices through acquisitions or signing designers.

Among them, MINISO, with over 7,000 stores as a mainstream offline channel, now has 16 proprietary IPs, with its future moves drawing industry attention.

Xie Dong told Xinfeng that so far there is no sign that MINISO is reducing support for partners. He believes that the key to maintaining relationships with top partners is whether you can continuously create value for them.

This logic also applies to cooperation with Lehua and its celebrity resource representatives.

Currently, Qimeng Island has started relying on online operations and supply chain capabilities to support Lehua’s self-created IP, such as the trendy toy IP “VIVISTAR” sold in Yuhuadongxing’s livestreaming room.

From 1 to 100

For Qimeng Island, which has already achieved a breakthrough from 0 to 1, the key going forward is to prove that WAKUKU has lasting vitality and can effectively extend its popularity to more IPs.

The young player shows strong confidence in this: the company has set a revenue target of 750 to 800 million yuan for fiscal year 2026.

This goal is based on the starting point of the third quarter of 2025, when actual company revenue was about 127 million yuan, a quarter-on-quarter growth of 93.3%; the guidance for Q4 is 150–160 million yuan.

Based on this calculation, though revenue still grows in Q4, quarter-on-quarter growth rate slows to about 22%, and H1 of 2026 overall revenue is expected to be 460–520 million yuan.

If this goal is achieved, with the current scale of IP reserves, Qimeng Island and WAKUKU could further boost their industry influence.

Currently, company resources remain focused on core blockbuster IPs.

Q3 financials show that of the 17 IPs operated by Qimeng Island, the three top ones—WAKUKU, Youli and SIINONO—contributed 97% of revenue, with WAKUKU accounting for over 70% alone.

Channels are still mainly non-self-operated, accounting for over 70%, fluctuating based on product debut rhythm. Although self-operated stores have successively opened, their main role now is to provide immersive experiences and build fan communities.

Xie Dong said the company plans to complete the initial layout of six stores by the end of Q1 next year, with the single store model still under evaluation. He revealed, “The overall plan is still to prioritize cooperation with key channel partners.”

Due to the low share of self-operated channels, Qimeng Island faces a profit margin ceiling, currently around 40%.

With upfront investment in stores and marketing, the trendy toy business has not yet turned a profit in the two disclosed quarters: continuing operations net loss was 25.8 million yuan in Q3, widening from a Q2 loss of 21.8 million yuan.

Regarding celebrity marketing and other expenditures, Xie Dong told Xinfeng the company keeps total marketing spend at a certain proportion of revenue, such as around 20%. “As for whether to use celebrity collaborations or other ways, the team dynamically adjusts by cost-effectiveness. Management only sets the goals and budget framework without over-restricting.”

With rapid business expansion, the company also faces operational challenges.

By the end of Q3, Qimeng Island’s inventory had almost doubled quarter-on-quarter to 48.4 million yuan; receivables from related parties expanded sharply from 1.58 million yuan to over 20 million yuan.

Despite high-quality IPs emerging and channels getting more selective, Qimeng Island has accumulated some traffic and brand recognition.

As of Q3 end, the company held a total of nearly 800 million yuan in cash, restricted cash, and short-term investments, providing funding guarantee for subsequent business exploration and trial-and-error.

For the new generation of trendy toy players, the journey from 1 to 100 in scale may have only just begun.

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