A C-Suite executive at Pop Mart's biggest Chinese competitor explains what goes into making a hit toy like Labubu

• A major Chinese toy executive said there is a formula for developing a successful IP like Labubu.
• Miniso's operating chief said that for a character to be popular, it has to look recognizable.
• "Molly's pout, Labubu's nine teeth, Cry Baby's big tears, all have clear characteristics," Robin Liu said.

An executive of one of Pop Mart's biggest competitors said there is a recipe for making a "golden" character like Labubu.

Miniso, a Chinese lifestyle company, is the force behind Top Toy, a company that makes blind boxes. Its intellectual property characters include YoYo, a little figure with a tilted head, as well as IP collaborations with Sanrio, Disney, and Chiikawa.

Robin Liu, Miniso's marketing chief, said IPs like Labubu have driven a rise in interest in collectibles.

"To win many fans or achieve commercial success, an IP must have strong recognizability and uniqueness — not look generic," Liu told Business Insider. "Look at Pop Mart: Molly's pout, Labubu's nine teeth, Cry Baby's big tears. All have clear characteristics."

"Strong recognizability from the start is crucial, like a singer's voice being memorable," Liu said.

He said IPs often have short life cycles of three to five months, but some elements help extend their relevance. These include frequent launches of new collections within the IP and maintaining a degree of scarcity in the secondhand market.

"For our own IP YoYo, the initial launches sold strongly and many channels requested more supply, but IP managers may hold back to maintain scarcity and secondhand premiums," Liu said. "We won't overproduce just because sales are hot. We may wait for the next generation with new themes and designs to keep products fresh."

And lastly, he said, conducting physical pop-ups was important to get the word out about the product and let customers see it. Miniso has several concept stores called Miniso Land in China and around the world.

Top Toy is a growing business for Miniso. In its latest quarter, the toy spinoff earned sales of $80.7 million, an increase of 111% from the same period the year before. Miniso's total quarterly sales were about $814.3 million.

As of September, Miniso had 7,830 stores globally, with over 3,400 located outside China.

The company relies on a fast product development pipeline. Every week, staff go through 10,000 prototypes, narrowing it down to a list of the top 100 products to roll out into the market, Liu said.

Collectables like Labubu have skyrocketed in popularity in recent years, as Gen Z veers away from big-ticket items toward small luxury purchases.

Labubu has enjoyed more than a year of viral success, with its toys being highly popular among "kidults" — adult toy collectors, who buy them as emotional support objects. Liu said Miniso was working to keep this consumer group hooked.

"We predict big-toy markets — adult collectibles and children's toys — both have large growth potential, with adult collectibles expected to grow faster," he said.

Other toys, such as Jellycat, Smiskis, and Sonny Angels, have experienced similar demand. Particularly hot in the toy industry are blind boxes, which are toys sold in packaging that keeps the toy hidden, adding an element of surprise during unboxing.

Miniso is now looking to expand its business in the US. It already has about 350 stores in the country, Liu said, and the plan is to expand beyond 500 stores.