Xinyu | Dialogue with Kimodo Island CFO Xie Dong: How a Cross-Industry Trendy Toy Brand Launched Its "Blitzkrieg"

In 2025, the trendy toy sector welcomed a publicly listed company player entering from another field: “HERE Qimengdao”. Qimengdao’s predecessor was an online adult interest learning service provider called “Quantum Song”. After completing the acquisition of trendy toy brand Yiqi Culture (Letsvan) and spinning off its education business, the company officially changed its name to “HERE Qimengdao” this November and fully pivoted to the trendy toy track. Looking at the industry, the emergence of blockbuster products like LABUBU has opened up new possibilities for the trendy toy market, driving a wave of new brands to rise rapidly by leveraging traffic. Among them, Qimengdao, thanks to its IP creation ability and product strength, has quickly risen to the forefront of industry competition in less than a year by leveraging celebrity resources and exposure through channels such as MINISO. In the third quarter, the revenue from Qimengdao’s trendy toy business reached 127 million yuan, a significant quarter-over-quarter increase of 93.3%, exceeding previous performance expectations; gross margin also increased by 6.5 percentage points to 41.2%. Based on the current growth momentum, management has further projected revenue guidance of 750-800 million yuan for fiscal year 2026. By the end of 2025, Qimengdao’s first batch of directly operated stores will gradually open, with plans to further deepen offline operations and user experience through branded image stores. As trendy toys transition from niche circles to mass consumption, Qimengdao’s exploration and practice in product development, marketing strategy, market positioning, and even merger and acquisition transformation are gradually becoming a reference sample for industry observation and research. Recently, Xinfeng held a dialogue with Qimengdao’s Chief Financial Officer Xie Dong to explore its path of rise and methodology. The following is an edited transcript of the conversation. Xinfeng: How did the listed company notice Yiqi Culture and the opportunities behind WAKUKU? What is the strategic logic behind this acquisition? Xie Dong: Quantum Song initially focused more on a traffic-driven business model. Although it achieved rapid early growth and quickly went public on Nasdaq, we realized early on the need to explore a business model that was more valuable in the long term. Thus, in 2024, we began exploring a pivot to the consumer sector, and after several attempts, selected the trendy toy track. Once per capita GDP reaches a certain threshold, consumption of spiritual and cultural experiences will surge. Meanwhile, the domestic supply chain is mature, and the success of leading companies has validated the potential of emotional consumption. The domestic industry is still in its early stages; over a longer cycle, everyone is still on a similar starting line. After evaluation, we believed the team’s core capabilities lay in operations, market, and traffic, while the industry’s core was IP and product-driven. Therefore, we chose to build our business foundation through mergers and acquisitions. Yiqi Culture became the final choice for three reasons: First, the team has strong product-driven and original IP capabilities, and founder Zhan Huiyu has over ten years’ experience in this field; second, the company’s scale is moderate, which facilitates integration and synergy; third, both parties share highly aligned philosophies and values, and have established long-term trust since meeting through investors in 2021. After signing the investment agreement, we completed business integration and brand renewal in less than a year, launching the new global brand “HERE Qimengdao”, and have now laid a solid foundation for a fresh start. Xinfeng: When did WAKUKU’s popularity peak? When did the supply chain face its biggest challenge? Xie Dong: As early as last December, we discussed IP explosion strategies with Mr. Zhan. He was then very optimistic about WAKUKU; we concentrated resources on promotion, and the IP’s popularity fully exploded around the Chinese New Year. However, supply chain preparation was clearly insufficient, with initial production capacity very low—less than 10,000 plush products made in January, and an out-of-stock situation across all channels in February. The supply chain involves multiple steps: hand-sewing, component combination, multi-factory collaboration, and usually requires 3-6 months of advance planning. Faced with a sudden business surge, the team lacked overall collaboration experience, endured about half a year of tense adjustment until around August this year when things gradually smoothed out. At present, production capacity basically matches sales, and by the end of December, we expect to achieve production of around 400,000 sets, equaling over 2 million pieces to fulfill our business plans. From a macro perspective, the root cause of production strains in the industry is the overly rapid IP boom leading to temporary mismatches. Once frontend operations stabilize, the supply chain can fully meet demand, and capacity shouldn’t be a long-term bottleneck. Xinfeng: Many brands choose to enter mature channels like MINISO. Why does Qimengdao opt to set up directly operated offline stores at this stage? Xie Dong: Qimengdao consistently maintains a strategy of deep cooperation with leading industry partners; collaboration with large channels such as MINISO is our primary sales strategy and will not change in the long term. At this stage, our self-operated stores serve more for brand image display and enhanced user experience: using location and space design to convey Qimengdao’s cultural values and strengthen users’ emotional connection. For a trendy toy industry built around emotional value, offline exposure is critical. Stores also provide feedback on users and sales data, which helps optimize products and channel partnerships. Qimengdao needs such “arenas” to directly interact with users and refine the brand. The first phase plans for six stores to open in Beijing, Chongqing, and Shenzhen. Subsequent expansion plans are not fixed, and will depend entirely on the single-store model proving effective. Xinfeng: Both WAKUKU and SIINONO have achieved a process from low awareness to rapid breakout. What is our methodology for IP operations? Xie Dong: First, IP must have prominent features and emotional labels, avoiding generic faces; second, emotional positioning, labeling, and content direction must be determined already at planning stage; third, IP labels must be continuously reinforced through focused online and offline activities to maintain user awareness heat. Execution and the team’s product intuition are equally crucial. Mr. Zhan’s experience in aesthetics and product judgment, combined with our data-driven iterative operating system, form the basis for rapid advancement. Qimengdao will also closely monitor social media feedback and offline insights to continuously optimize operations. Xinfeng: Can you share specifics about your cooperation model with Yuehua? What are the main businesses and assets of the joint venture? Xie Dong: Qimengdao and Yuehua have established a joint venture, leveraging its advantages in celebrity management and entertainment resources. The joint venture will also develop exclusive IPs, deliver products and operational capabilities, achieving mutual benefit. Currently, Yuehua holds a controlling stake in the joint venture, which mainly undertakes operation and promotion of related IP. It has begun selling one or two exclusive IP products custom-developed by Qimengdao. Xinfeng: WAKUKU is often promoted by celebrities. How do you plan your marketing budget for this area? Xie Dong: Qimengdao bases its overall marketing budget on total revenue. The specific proportion is planned according to product and brand promotion strategy. Within the budget, the decision to use celebrity promotion or other forms is made flexibly by the operations team based on real-time data and cost effectiveness—no fixed pathway is pre-set. Xinfeng: If partnerships with leading players like MINISO or Yuehua change, will Qimengdao’s competitive moat be affected? Xie Dong: MINISO leads channel operations, Yuehua is an expert in celebrity management, while Qimengdao’s core ability lies in product and IP creation as well as upstream and downstream coordination. Recognizing our own boundaries, focusing on core strengths, and partnering with the best is key to our rapid development. The foundation for strong partnerships is the continuous creation of market-competitive IP and products, consistently providing partners with user and commercial value. As long as this core capability keeps growing, quality partners can be attracted and retained. Xinfeng: How will the projected performance of 750-800 million yuan for FY2026 be broken down? Xie Dong: At the IP level, the three main IPs—WAKUKU, Youli, and SIINONO—are expected to contribute the majority of the revenue; At the channel level, external partner channels are expected to account for over 70%; At the market level, domestic will remain primary this fiscal year, while overseas markets have started layout but still need time before scaling up; At the product level, vinyl plush will remain the main type in the short term, with continual R&D of new products. The overall approach follows the “80/20 rule” to ensure focused resource allocation. Xinfeng: The vinyl plush category is peaking in popularity in 2025, and “cooling off” is now being discussed. How do you view industry trends and competition in 2026? Xie Dong: Every consumer product has a cycle, trendy toys are no exception. The core issue is not avoiding cycles, but how to extend IP life and ride out cycles through continuous product iteration and innovation in operations. Qimengdao’s strategy is to “fix the roof on a sunny day”: while operating current IP, constantly reserve for future trends, explore new forms of IP operations, and build a long-term business model that can adapt to change. Xinfeng: Qimengdao currently has ample cash reserves. What are your plans for investment and acquisitions in the future? Xie Dong: Investment and acquisition depend on resource acquisition needs, not spending for its own sake. We will assess whether building ourselves or acquiring is superior in speed and quality. As one of the few listed companies in the trendy toy field, ample cash indeed gives us more confidence to seize opportunities that can accelerate strategic layout. However, we do not have clear targets at present—we will always remain prudent and focused. Risk warning and disclaimer The market has risks, and investment should be cautious. 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