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Report: 'AI toys' sector is booming: market grows rapidly but investment cools sharply, with high homogenization and ...
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- DeepHorus
On October 18, IT Home, citing a "Tech Planet" report, said that the AI toy sector continues to heat up, but the investment side has clearly cooled. Data from the Ministry of Industry and Information Technology shows that in 2025 China's AI toy market will reach 29 billion yuan, and it is expected to reach 34.2 billion yuan in 2026. Taobao's 2025 annual data shows that the transaction volume of AI toy products increased by more than 1,600% year-on-year. Rapid market growth coexisting with cautious capital has become a prominent feature of this sector.
From the demand side, purchasing logic diverges by market tier. An AI toy industry practitioner revealed that consumers in first-tier cities lean toward educational investment or trying new technology, with average order values reaching 1,000 yuan or even 10,000 yuan; parents will study large-model capabilities, conversation quality, and educational content. The logic in lower-tier markets is simpler: cheap, able to talk with children, better than ordinary toys. This difference leaves manufacturers facing different challenges in pricing and feature positioning.
Currently, gift-giving has become the main purchasing scenario for AI toys. After this year's National Day holiday, data disclosed by some manufacturers showed that sales in the first half of this year had already exceeded the whole of last year. Especially in Dongguan, Yiwu, and other places with developed toy supply chains, some merchants have already made a fortune. Short-term explosive growth has attracted a large number of brands seeking quick money, but repeat purchases and user experience have not kept pace.
Homogenization and high return rates have become prominent problems in the industry. Industry reports show that the return rate for AI toys remains above 50% year-round. On e-commerce platforms such as Taobao, JD.com, and Pinduoduo, some trendy toy companies, in order to reduce return rates, implement conditional returns and exchanges, meaning that after the product is connected to the internet and activated, it can no longer be returned. But "Tech Planet" pointed out that this will also cause sales to decline.
After the novelty-seeking demand, AI toys quickly become "desktop dust-collecting gadgets." The report said that investment across the entire AI toy sector is cooling significantly, with products highly homogenized and return rates remaining high. Although market size forecasts are still growing, the repeat-purchase and experience problems behind the short-term explosion have already emerged.
From a business model perspective, "Tech Planet" stated that the barriers for AI toys lie in large-model interaction capabilities, internet connectivity and computing power cost control, and subscription service ecosystems. At present, the "low-price war" has become the most direct signal, and industry competition remains at the price level. The final form of AI toys is still being explored, and manufacturers need to find differentiated paths in directions such as education and companionship.
Looking ahead, the AI toy industry is in need of a critical point. Rapid market growth provides space, but cooling investment, homogenization, and return problems also create pressure. Only by establishing barriers in interaction capabilities, cost control, and subscription ecosystems, and solving the difficulties of user experience and repeat purchases, can the sector move from a short-term trend to a long-term business.
