From urban infrastructure construction and theme image shaping to daily life
Dongguan’s “art toys” factor is on the rise
At the heart of Dongguan stands “Laura,” a colossal 12-meter-tall art toy sculpture. Its sci-fi inspired silhouette is defined by vibrant colored lines.
Beneath this new city landmark, erected in 2021, stretches an “Art Toy Avenue.” It connects design studios, art toy exhibition centers, and immersive experience halls. In the salons held irregularly here, young curators no longer discuss cost control, but instead focus on how to infuse the cultural elements of the lion dance heritage into mecha design.
Dongguan, once famed as the “world’s factory,” has now leapt into the art toy universe captivating young consumers. This marks a quiet industrial evolution: Production lines from Japan’s Bandai and Disney have chosen to settle here, and production centers of leading companies like Pop Mart have established roots here. 85% of the art toy products nationwide are born in this city.
As the anime goods consumption wave sweeps across China, Dongguan, leveraging its over four decades of accumulated industrial chain advantages, has once again become the most solid foundation for this cultural consumption revolution. The city’s transformation mirrors the “blind box logic” inherent in art toys – just when people think they’ve grasped its industrial essence, it always manages to produce unexpected surprises. After being designated China’s “Capital of Art Toys” in 2023, Dongguan now faces new challenges in advancing the industry to its next stage of development.
Art toys battle
“Orders for our Nezha-themed merchandise only began cooling down last month, but the breakout popularity it generated for our company continues to this day,” Chen Zhihong, manager of Guangdong Henglitai Crafts Co., Ltd., told China Newsweek. After the Lunar New Year, many new clients approaching the company came from outside the anime or gaming sphere—instead, they were cross-industry players from sectors like catering and stationery. On the day of the interview alone, he had already hosted two delegations: one from a Chinese regional government department, and another from a leading Japanese entertainment company.
As the exclusive manufacturer of movie merchandise for FunCrazy, the official derivative product partner of Nezha 2, Henglitai completed approximately 3 million sets of Nezha series orders. This is the data Chen Zhihong often mentions when visiting clients inquire about the company’s production capacity. Back in October of last year, Henglitai received the order, and by early January this year, the first batch of over 300,000 sets was delivered. At the time, no one had anticipated the movie’s box office success, let alone the “Nezha” anime goods selling out just three days after the movie’s release.
Chen Zhihong clearly remembers that on the tenth day after the Chinese New Year, when work resumed, the client, FunCrazy, immediately placed an additional order for more than one million sets of products, including acrylic color paper, reflective tinplate badges, plot film cards, MINI blind bags, and transparent cards. Shortly after delivery, the client sent new product orders. To meet consumer demand for recreating the iconic scene of the fire lotus, the new products incorporated new technologies like naked-eye 3D. The founder and designer repeatedly adjusted the printing, and without affecting other orders, they completed the prototype in 7 days and delivered the products smoothly within a month.
“Just for the badge products, we can produce up to 400,000 units in a single day,” said Chen Zhihong. He explained that the factory’s automated equipment can handle the front-end printing and parts production, but the back-end processes such as assembly and packaging still rely on manual labor. To ensure the smooth production of Nezha merchandise, the company even established an emergency response team.
The scene of Henglitai’s factory line racing against time is just a microcosm of Dongguan’s art toy companies handling the massive traffic generated by the “Nezha economy.” From Henglitai’s location in Wanjiang Subdistrict, Dongguan, if you drive 30 kilometers northeast along Dongjiang Avenue to Shipai Town in the city’s northeastern part, several art toy companies have worked together in a “cooperative combat” manner to complete this multi-million-dollar “Nezha” order.
With tight timelines, high demands, and large order volumes, the factory faced one problem after another: Where can we find so many skilled industrial workers? How can we quickly develop a large number of molds? Will we be able to meet the delivery deadline?
“At the time, factories were still on Chinese New Year holiday. To resolve the production capacity bottleneck for enterprises, the Dongguan Municipal Human Resources and Social Security Bureau acted swiftly by launching a nationwide recruitment drive,” introduced Liu Xueyi, Head of Art Toys at Dongguan Shipai Town’s Economic Development Bureau. Meanwhile, Shipai Town rapidly identified over 20 high-quality suppliers through the supply chain big data platform of its Art Toys Center and coordinated over 2,000 workers to support production.
Guangdong Weisi Art Toys Intelligent Manufacturing Co., Ltd. provided robust technical support for this “collaborative campaign.” To accelerate mold development, the company’s technical center modularized and divided the production process, organizing 12 leading mold enterprises for joint research and parallel development. Simultaneously, through digital means such as 3D printing for rapid validation, AI simulation of injection molding parameters, and cloud-based collaborative design, they compressed the mold development cycle by 80% and shortened mass production lead time by 83%. As stated by Li Wenbo, General Manager of Weisi Art Toys: “We completed a manufacturing process in 10 days that previously took two months.”
“Shipai Town boasts Dongguan’s largest art toy industry output value, with the highest concentration of art toy enterprises and independent brands, accounting for approximately 30% of the city’s total,” noted Liu Xueyi, referencing an art toy industry distribution map. With the Shipai Art Toy Center as its nucleus, a complete industrial chain covering “design-prototyping-production-logistics-sales” operates within a 5-kilometer radius (15-minute drive). Enterprises bringing designs to Shipai’s factories can shorten average product development cycles by 20 days from design to mass production.
This comprehensive industrial chain advantage positions Dongguan as the premier hub for IP commercialization nationwide and globally. Behind recent hit art toys, the imprint of “Made in Dongguan” is consistently evident. Liu Xueyi cited examples including merchandise from the Beijing Winter Olympics mascot “Bing Dwen Dwen” (2022), the Qatar World Cup mascot “La'eeb” (2022), and the Hangzhou Asian Games mascot “Memories of Jiangnan” (2023)—all produced in Dongguan.
“From merchandise to art toys, Dongguan’s ability to capitalize on the Nezha craze stems directly from its industrial foundation,” Liu Xueyi emphasized. Having started by taking over relocated foreign enterprises for OEM production, Dongguan now hosts over 4,000 toy manufacturers and nearly 1,500 upstream/downstream supporting firms, making it China’s largest toy export base. Public data shows Dongguan manufactures one-fourth of the world’s animation derivative products and produces nearly 85% of China’s art toys.
“Capital of Art Toys” takes shape
In Dongguan—whether in the city center or its outer towns—it’s difficult to trace a modern skyline. Without subordinate districts or counties, the city’s 35 towns and districts each specialize in distinct industries. Nearly every town boasts its own central business district where high-rise residences stand shoulder-to-shoulder with skyscrapers. Yet the farther out you go, the shorter the buildings become. As dusk falls in industrial zones, workers stream out along alleyways, flocking to street food stalls. The most common sights—Hunan stir-fries, Northeast skewers, and Sichuan-Chongqing eateries—hint at migrant workers’ origins, reminiscent of Dongguan’s manufacturing dawn three to four decades ago.
After Dongguan’s first toy factory opened in 1980, waves of Hong Kong and Taiwan OEM enterprises settled in Shipai Town, providing manufacturing services for global brands like Disney, Marvel, and Gundam. High hourly wages drew young people nationwide, including Liu Xueshen—now Chairman of Sum’s Model Toys Co., Ltd.—who once joined this migration.
“Foreign-invested enterprises have cultivated the first generation of local toy makers in Dongguan,” Liu Xueshen told China Newsweek. In 1998, he came to Guangdong from his hometown in Hunan to “try his luck.” By chance, he entered an automobile model manufacturing factory, starting as a workshop mechanic. Due to his determination to succeed, he worked his way up from a technician to a master, then an engineer, and eventually to a senior executive in foreign companies, including Hong Kong, Taiwan, and French-invested firms. To communicate with his foreign colleagues, he taught himself computer skills, Cantonese, and foreign languages. By the end, he could write emails and negotiate orders in English.
In his twelfth year in the industry, Liu Xueshen felt that the “timing was right” and decided to quit his job and start his own business. Initially, his factory had fewer than 20 people, so it was far from scalable. However, he managed to secure a large order of 6,000 Porsche car models from a German client. The client told Liu that it was his professionalism in the entire industrial chain that impressed him. Upon reflection, Liu realized that Dongguan’s factories had just gone through the financial crisis, which led to a significant evaporation of overseas orders, causing large foreign-invested factories, which were heavily dependent on single clients, to shut down. On the other hand, the smaller, more flexible factories survived. “Dongguan’s toy industry underwent a reshuffle, and this was a key moment in the transformation from toys to art toys.”
Zheng Bo, a man from Chongqing who had worked in Dongguan for eight years, also sensed a business opportunity to “buy low in a downturn.” He told China Newsweek that with the decrease in machinery and labor costs, he founded Dongguan Deshen Hardware and Plastic Co., Ltd. in 2008 to provide support for toy companies. With years of management experience, he quickly secured private label manufacturing orders for globally renowned IP toys, including Gundam, Mickey, Transformers, Ultraman, and Hello Kitty. By the time he moved to a new factory in 2022, his annual production value had already exceeded 300 million yuan.
“Overseas orders demanded higher standards. Even before the concept of art toys emerged, local OEM factories were essentially producing high-end toys – a key feature distinguishing Dongguan’s toy industry cluster from others in China,” explained Liu Xueshen, using Sum’s Model Toys as an example. He recounted that the first batch of 6,000 Porsche model cars had 50% rejected by the customer due to excessive polishing on a single roof panel line. The factory used this setback to overhaul its production processes, management, and standards. Not only did they replace the entire batch with qualified products for the client, but it also marked the beginning of their full-scale OEM operations for external clients. Liu kept those scrapped models, turning 1,080 of them into a display wall in the factory’s model exhibition hall. It serves as a constant reminder to himself and his employees: “Produce the highest quality products.”
In pursuit of more sustainable development, local enterprises that had just gained a foothold in the market were no longer satisfied with just OEM work. They began focusing on both ends of the manufacturing value chain. The technological foundation accumulated through OEM work gave Liu Xueshen the confidence to create his own brand. After consulting with several automobile companies, he eventually acquired the Bentley license for 100,000 euros, equivalent to 690,000 yuan. “But this investment was more than the annual profit Sum’s Model Toys made at that time.”
From registering the Almost Real trademark in 2015 to launching the first Bentley model car, Liu Xueshen spent two years paying his dues. To test the market effect of the “No. 001” product, he started a “1 yuan auction” in a WeChat fan group. Initially, the response was lukewarm, and his own psychological price estimate was only 500 yuan. However, two days before the auction deadline, the price suddenly surged, eventually being sold for the high price of 14,999 yuan. Liu Xueshen tasted the sweet benefits of the niche market and, on the eve of the art toy industry explosion, had already built his own customer base.
In 2016, art toy company Pop Mart launched the first generation of the MOLLY zodiac blind boxes, which sold out in just 4 seconds after going live for pre-sale. Art toy quickly became popular due to its combination of social, collectible, and entertainment attributes. According to data previously released by the Chinese Academy of Social Sciences, in 2015, the Chinese art toy industry had already reached a market size of 6.3 billion yuan, with a compound annual growth rate of 36% from 2015 to 2020.
The Dongguan toy industry cluster played a key role in the realization of these art toy designs. “Initially, manufacturers generally lacked awareness of art toy categories like blind boxes, and only a few factories were willing to try developing them,” said Zheng Bo. He admitted that the craftsmanship of domestic art toy is more complex than that of overseas orders, requiring new molds and the creation of new production standards. However, if production is successfully completed, the factory can tap into an entirely new market. With the appearance of the first OEM factory, Dongguan quickly became the main production base for Pop Mart, providing more than 70% of its production capacity.
“Compared to OEM work, purchasing someone else’s copyright to make derivative products can quickly exchange traffic for money, but it still lacks true value,” recalled Zheng Bo. Inspired by the growth of the domestic art toy market, he decided to independently create his own original IP brand, while the over 20 years of manufacturing experience he had in OEM work could be transferred to his own brand. In recent years, as the market for “emotional consumption” has become increasingly apparent, this has also brought new opportunities for Dongguan’s own art toy brands.
A typical development cycle for an art toy product is around 18 months. By leveraging factory production advantages, Deshen’s self-created brand, ToyCity, was able to shorten the development cycle to 10 months, with the fastest product launch taking only 8 months. Unlike the logic of famous IPs in Japan and the US that first create content and then make products, this art toy boom has provided a different approach: as long as the original art toy design is attractive enough to consumers, products can be launched before the content is fully taken shape. To quickly adapt to market changes, Zheng Bo developed a comprehensive strategy for ToyCity, which included connecting online platforms with offline stores, creating a dedicated app and official fan groups, and establishing multiple product price tiers. The most prominent marketing campaign was the “City Landmarks,” where ToyCity turned its IPs into giant statues and placed them in major city commercial areas for tourists to take photos and check in, rapidly increasing brand recognition.
ToyCity provided a set of data showing that in 2020, their product sales amounted to just over 20 million yuan. By 2022, sales had increased sixfold, reaching 140 million yuan. “More and more OEM companies are transforming into original IP creators,” said Liu Xueyi. In Shipai Town, art toy companies that own original IPs and other licensed IPs number over 100, accounting for about 30% of the city’s total original IPs. In 2023, the China Toy and Juvenile Products Association awarded Dongguan the title of “China’s Capital of Art Toys”. Taking this opportunity, Dongguan is fully promoting the “art toy+” cross-industry interaction to create a new city cultural brand “Trendy Dongguan.”
However, as pointed out by Wen Guoxiong, Vice President of the China Toy and Juvenile Products Association, Dongguan’s original R&D and design capabilities for art toys are still lacking. There are few self-owned brands and IPs, and the design talent pool needs to be strengthened.
The path to upgrading
In October last year, the Bay Area Art Toy Cultural & Creative Industry Alliance – initiated by the Dongguan Shipai Town People’s Government and the Guangdong Human Resources Management Association – conducted an industry survey. The team first visited leading enterprises for field research, followed by investigations at several top art toy manufacturers in Dongguan. A shared concern emerged: hot IPs change at lightning speed, making trends nearly impossible to predict. When a new IP unexpectedly goes viral, factories cannot immediately scale up production. By the time production lines and workforce are ready, the trend may have already faded.
“The IP licensing journey of the two Nezha films is the most telling case,” remarked Ye Zufeng, President of the Dongguan Art Toy Association. He explained that before the release of Nezha 1, multiple Dongguan toy companies had licensed the character’s copyright. Despite the film’s massive success, merchandise sales underperformed, leaving businesses with heavy inventory and lingering apprehension. Last December, when Dongguan hosted the HI FUNNY World Art Toys & Animation Industry Week just before Nezha 2’s premiere, related IP licensing deals attracted few takers. One month later, the film’s release drove soaring sales of related anime goods and art toys. Manufacturers then scrambled to secure licenses at prices over ten times higher than those offered during the industry week – but it was already too late.
Beyond reacting swiftly to trends, the long-term solution for enterprises lies in moving up the value chain. In 2004, Ye Zufeng founded Weishi Group, starting as an OEM manufacturer producing metal buttons for major brands. Today, it ranks among core suppliers for leading domestic smartphone brands. Driven by personal passion for models, Ye incubated the metal toy brand PIECECOOL – a four-year journey from conceptualization, design drafting, prototyping, to equipment development before launching its first product.
Initially, PIECOOL adhered to the conventional path of “licensing overseas IPs for export distribution,” but sales stagnated around RMB 30 million for years. The team realized this model merely served foreign IP holders. A strategic pivot followed: drawing inspiration from traditional Chinese culture to develop original IP. In 2019, the “Vermillion Dowry” series catalyzed 150% revenue growth, propelling annual sales to RMB 180 million by last year.
Yet among Dongguan’s 4,000+ toy enterprises, few OEMs have successfully transformed. “Most struggle to scale or transition – not due to unwillingness, but limited resources and information asymmetry,” notes Liu Xueyi. While art toys constitute one of Dongguan’s eight pillar industries, their above-designated-size industrial output reached only RMB 17.8 billion last year, with micro-enterprises dominating the sector. These smaller players remain relatively isolated and vulnerable to market shifts. Liu illustrates this gap: When producing Nezha 2 merchandise, a leading Shipai-based enterprise secured IP rights directly from Shanghai clients, while a small factory obtained minimal subcontracts through multiple intermediaries.
“The Art Toy Center is tackling inefficiencies in resource matching through technology,” Liu Xueyi explained. Resources connected via the Bay Area Art Toy Cultural & Creative Industry Alliance – including enterprises and designers – are converging on the online “Art Toy Center” platform. Functioning as Dongguan’s Xiaohongshu for art toys, it allows external companies to find production capacity locally while Dongguan manufacturers can source IPs online. The platform is currently in beta testing.
The association also strives to expand the industry pie. Ye Zufeng recalled that Dongguan established an Art Toy Committee in 2022, followed by the Art Toy Association in April this year. With 42 member enterprises selected strictly for owning independent brands, these companies either integrate top-tier IP resources or possess sales channel advantages – directly addressing the twin commercialization challenges facing the sector: design deficiencies or poor market traction.
“The ideal scenario is achieving mutual support while maintaining differentiated competition,” Ye illustrated. When engaging copyright holders, his current approach explores comprehensive collaboration – extending beyond PIECECOOL’s metal toys to encompass vinyl, plush, and other categories. Such holistic partnerships could attract more copyright holders.
Meanwhile, Dongguan’s Chashan-based Jollybaby has pioneered an unconventional transformation path. In 2010, founder Wang Zhen acquired Australian infant toy brand Jollybaby to penetrate overseas markets, later leveraging e-commerce platforms to establish its domestic presence. Inspired by art toys, the company transcended maternal-infant product limitations by launching all-ages IPs. Thus, over 23 years, it completed a three-stage leap from OEM manufacturing to brand ownership, and ultimately to original IP creation.
In January last year, Dongguan’s municipal government prioritized new industrialization in its No. 1 Policy Document, introducing tailored industry-specific support for art toys. Zhang Yucheng, Deputy Secretary-General of the Dongguan Municipal Government, publicly stated that the city would empower more toy OEMs to extend industrial chains and elevate value through IP development, thereby strengthening Dongguan’s influence and voice within the art toy sector.
“Design is the critical factor in art toys, and designers are the core competitive advantage,” Zheng Bo emphasized to China Newsweek. Since founding ToyCity, the company has expanded to over 120 employees – with designers comprising one-third of the workforce. To meet the design team’s need for “immediate access to art exhibitions and festivals,” the company established a dedicated design branch in Beijing. “Frankly, Dongguan currently lacks the urban ecosystem to retain such artistic talent.”
“The Capital of Art Toys cannot rely solely on the art toy industry.” Zheng Bo reflected, in Jingdezhen, the “Porcelain Capital,” even streetlights are made of ceramics, and Kumamon, the mascot of Japan’s Kumamoto Prefecture, has permeated every aspect of urban life. As Dongguan, China’s “Capital of Art Toys,” gradually enhances its infusion of art toy elements—from urban infrastructure and thematic branding to daily life—the city is steadily raising its “art toy content.”
Dongguan currently has a permanent population of over 10 million, with more than 70% of the population coming from outside the city, and the average age is under 34. This is unique among China’s mega-cities. According to Liu Xueyi, establishing the “Capital of Art Toys” as a brand for the city is significant not only for attracting high-end talent but also for empowering other industries. However, changing the urban atmosphere requires more time and patience. Over time, the “Capital of Art Toys” brand may trigger even more “art toy content.”
Published in the June 2, 2025 issue, No. 1189 of China Newsweek magazine
Magazine title: Dongguan: Art toy factor in a world-renowned manufacturing hub
