Damai Entertainment is creating broader avenues for intellectual properties to resonate. As 2026 approaches, China's designer toy industry finds itself at a pivotal crossroads. On one front, the sector continues its robust expansion. Recent data from Taobao's "2026 Taobao & Tmall Designer Toy New Opportunities" report indicates the domestic designer toy market has surpassed RMB 250 billion, maintaining double-digit growth. Consumer reach is extending outward from first- and second-tier cities into third- and fourth-tier urban centers, with steadily rising penetration among younger demographics. Simultaneously, the competitive dynamics are undergoing rapid transformation, moving away from an era dominated by a handful of major brands into a new cycle characterized by diverse players introducing innovative strategies.
The latest entrant making waves is the publicly listed company Damai Entertainment. On August 16, its designer toy brand Lucky Loop announced an ambitious rollout plan spanning eight stores across six cities. Following the initial wave of locations in prime commercial districts of Shanghai, Shenzhen, and Guangzhou, the brand is set to expand into Beijing, Nanjing, and Changsha within the year, achieving comprehensive coverage. Additionally, the brand has already curated a pipeline of over 200 proprietary IPs through global research, with more than 20 IPs currently in advanced signing or product development stages.
As a newcomer, what sets Lucky Loop apart from its competitors? What new dynamics might its arrival introduce to the designer toy marketplace? Over the past weekend, our team visited the Lucky Loop store at Wujiaochang Hopson One in Shanghai. Behind this "lucky market opening" lies more than just the debut of a fresh designer toy label; it represents Damai Entertainment's pioneering effort to integrate content, spatial design, and consumer engagement into this sector, marking an accelerated expansion of its physical entertainment strategy.
Bringing Designer Toy IPs into the Physical World
From the outset, Lucky Loop has positioned offline presence as its core focus. This decision transcends mere channel strategy, stemming from Damai Entertainment's understanding of designer toy IPs, its established expertise in offline operations, and its inherent physical entertainment DNA. In May of last year, Damai Entertainment unveiled its physical entertainment strategy, aiming to become Asia's leading technology-enabled physical entertainment company, with a strong emphasis on live, interactive, and immersive experiences. The launch of Lucky Loop is a direct extension of this strategic vision.
Clearly, designer toys represent a category highly compatible with physical entertainment scenarios. They preserve the intrinsic value of IPs while offering consumers a more holistic sensory experience through physical spaces. Lucky Loop believes that the essence of physical entertainment lies in the feelings evoked by the environment. An IP is not merely content confined to screens or design blueprints, nor is it just an object for use. When it inhabits a tangible space, presented through atmosphere, interaction, and experience, consumers can more directly appreciate its value. Consequently, Lucky Loop is actively exploring ways to transform IPs into tangible presences that can offer long-term companionship and be touched and perceived.
This philosophy is evident in the store's display approach. Unlike many designer toy retailers that rely on acrylic cases for protection, Lucky Loop opts for open displays, allowing customers to interact with and feel the products up close. While this approach inevitably increases the risk of damage and maintenance costs, the objective is to deliver a more complete experience within an authentic setting. The result is a "what you see is what you get" shopping environment. According to the Lucky Loop business lead, just before the Shanghai Hopson One opening, the team was meticulously calibrating the positioning of nearly 150 spotlights to optimize how each product was illuminated for the best visual impact.
In terms of site selection, Lucky Loop prioritizes locations close to its target demographic. Given that its core audience skews young, stores are strategically placed in high-traffic youthful hubs, such as the Wujiaochang Hopson One complex in Shanghai. The Shanghai flagship location features a larger footprint with a more immersive experience, while standard store formats are more compact. Regardless of size, Lucky Loop shuns the traditional shelf-based retail model, instead aiming to craft consumer spaces defined by thoughtful presentation and scene-setting. Earlier, the brand conducted front-end tests through two Basement locations. These tests revealed a strong consumer interest in in-store customization activities, such as applying small rhinestones, modifying figures, and outfit changes. Moving forward, the brand plans to incorporate more such interactive zones in its stores to facilitate personalized expression.
Operationally, the two pilot stores in Beijing and Shanghai have laid crucial groundwork for the official outlets. For Lucky Loop, these stores served as testing grounds, validating product categories, service processes, and operational methods. Before committing significant resources to larger formal locations, the team aimed to refine its model through these test stores, minimizing potential operational missteps, ensuring a sound commercial framework, healthy inventory turnover, and consistent service and product quality. While the designer toy industry may appear glamorous, it is fundamentally a consumer goods business that demands meticulous operational management. Starting with the test stores, Lucky Loop has been building its recruitment systems, service scripts, and training protocols, tasks that would be challenging to complete without a physical retail presence. It is through these preliminary outlets that its sales model, store operations, and training infrastructure have been progressively fine-tuned.
Finding Larger Spaces for IP Expression
The eight-store, six-city expansion strategy is underpinned not only by the practical insights gained from pilot stores but also by Lucky Loop's capabilities in team building, IP development, product creation, and user outreach. The core team consists largely of seasoned professionals from the designer toy sector, spanning IP management, product R&D, marketing, and channel development, possessing sharp insights into both IPs and consumer behavior. They are adept at scouting artists globally and emphasize meticulous IP stewardship.
On the product front, Lucky Loop avoids dictating creative direction to artists. Instead, it aims to help artists present their work to consumers in a more intuitive and compelling manner once an emotional connection is established. For instance, with the ECHOA series, beyond embedding an NFC card that plays character-specific music, the product team incorporated pearlescent detailing into the figures' eyes. Such refinements are not merely about completing a design but about subtly enhancing the artist's original emotional intent. Lucky Loop views innovation as critical to the designer toy industry. Despite the toy sector's mature manufacturing processes, aesthetic standards, and consumer habits developed over many years, the team strives to showcase novel expressions through incremental innovations.
Looking at industry trends, the form of designer toys is continually evolving. Early collectible-focused items were often larger, pricier, and less portable. The rise of PVC blind boxes lowered entry barriers and diversified collection and display options. Subsequently, the emergence of BJD, vinyl, and plush categories offered consumers more avenues for self-expression in different contexts. Consequently, Lucky Loop places significant emphasis on "how users express themselves" in its product logic. For example, vinyl dolls offer DIY potential for customization, while doll bags, wearable accessories, and plush brooches integrate toys into fashion, travel, and social settings. For consumers, toys transcend static display pieces, becoming projections of personal aesthetics, emotions, and lifestyle.
Based on this understanding, Lucky Loop considers how toys can be carried, worn, displayed, and used across various life scenarios to achieve natural integration. In this process, the product team's role is to assist designers in storytelling, translating their intended emotions, themes, and worldviews into a tangible product language while offering multiple pathways for expression. Taking the Miorinne series as an example, its designer, who lives in a natural environment, drew initial inspiration from forests, rain, and the outdoors. To authentically capture this ambiance, the team explored various techniques and materials, ultimately selecting liquid glitter for its textural alignment with the series' intended feeling. The material choice wasn't for novelty's sake but to serve thematic expression. Such cross-material integration often involves non-standard processes in the toy industry, posing challenges related to physical compatibility and mass production stability. Reportedly, Lucky Loop's R&D team comprises over 30 members specializing in glazes, engineering, and fabrics. Rather than relying solely on factory sampling like many competitors, it has established its own prototype workshop, allowing room for material and structural innovation and facilitating the discovery of mediums that better convey an IP's emotional resonance.
If IP discovery and supply chain execution represent the "internal strength," then the diverse business ecosystem of Damai Entertainment and the broader Orca Entertainment Group provides what could be seen as an "external boost" for Lucky Loop's IPs. Leveraging resources in artist management, film, music, theater, and exhibitions, Lucky Loop gains access to a wider array of content and scenario entry points. This means its designer toy IPs are no longer confined to shelves but can more flexibly participate in real-world settings, serving as vessels for particular lifestyle concepts or ways of living.
The Next Pillar of Physical Entertainment
Regarding the timing of entering the designer toy market, the Lucky Loop business lead noted that all industries experience cycles, and designer toys are no exception, fluctuating with the emergence of hit products and popular IPs. However, the team is confident that with solid product capabilities and a genuine connection to user perception and experience, there remains an opportunity to cultivate influential IPs. During periods of excessive industry hype, the market tends to be driven by fleeting trends, sweeping brands along regardless of strategic accuracy. This is not a healthy industry state. Therefore, the current moment presents a suitable entry window for Lucky Loop. Supported by corporate strategy and an agile, innovative team, the brand can dedicate deeper focus to understanding why specific IPs and products resonate with consumers.
"IP development is a long-term endeavor. Our phased goal is to first become a 'qualified' designer toy company: first, maintaining strong aesthetic standards to ensure accurate IP expression; second, aligning product quality with mainstream market levels to achieve stable quality and presentation; third, finding more suitable pathways for IP presentation beyond traditional marketing models." Rather than chasing short-term spikes, Lucky Loop prioritizes three foundational variables: high-quality service experience, a stable customer base, and sales conversion achieved while upholding baseline product quality. Only after cementing these fundamentals will it pursue longer-term strategic additions.
The eight-store, six-city expansion plan is a testament to Damai Entertainment's commitment to this sector. At its core, regardless of how store formats or service approaches evolve, Lucky Loop's ultimate anchor remains the IP. IP is the central asset of the entertainment industry and the starting point for all commercial narratives. For Damai Entertainment, whether involved in films, live performances, or designer toys, the underlying business logic remains unchanged: identify quality content creators and deliver exceptional IPs to users. Now, as this designer toy market, valued at RMB 250 billion, continues to expand, Lucky Loop may well become the next pivotal pillar for Damai Entertainment as it navigates its physical entertainment strategy.
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