Behind the Collectible Boom - Investment Opportunities in the IP Market

IP offers huge investment opportunities, from merchandise to movies, video games and theme parks
Demographic and societal changes drive IP growth
Countries like China and Japan are actively promoting IP economy

Mickey Mouse, Dragon Ball, Hello Kitty and Pokemon are popular IPs, but how often do we consider the investment potential that lies behind them?

IP, the abbreviation for intellectual property, encompasses varying business models. Take, for instance, Mario Brothers and Barbie. Companies owning these IPs not only promote their merchandise through their own sales channels, but they also expand into movies, video games, and theme parks. Beyond these, IP owners can also generate income streams through licensing. Licensees can then commercialise and sell derivative products. Moreover, IP owners can also entrust licensing agents to extend the reach to a broader market and negotiate IP collaborations. Earlier, as an example of an IP crossover, a mainland tea beverage chain partnered with Chiikawa to feature limited-edition drinks, related and theme stores.

A US investment bank showed that the global IP collectible market — including toys, trading cards, fashion and lifestyle products — has rapidly expanded into a US$100 billion mainstream industry. The market's growth rate has far outpaced that of other non-discretionary consumer categories. Iconic global franchises such as One Piece, Marvel Superheroes, Harry Potter, and FIFA are leading the charge, with Labubu being the latest global sensation to join the ranks. The IP markets in Japan and the US are relatively more mature, with the US pioneering the commercialisation of cartoon characters. Japan closely followed, fuelled by the rise of manga and video games during the 1980s and 1990s. On this front, China remains in the early stages. Data indicated that, in 2024, China's IP derivative product market accounted for 0.4% of total retail sales, lower than 0.8% in Japan and South Korea, as well as North America's 1.2%.

An effective strategy for discovering and nurturing high-potential IPs is crucial to a company's success. Undoubtedly, the latest triumph in the world of IP stardom is Labubu, a collaboration between a leading Chinese trend culture and entertainment company and the artist. In addition to merchandise based on its own original IPs, the company also manages licensed IPs, such as Hello Kitty, and markets its products both domestically and internationally through diversified sales channels, including online platforms, brick-and-mortar stores and vending machines "roboshops". Bolstered by strong demand for IPs, the company's net profit for the first half of 2025 surged by 385%.

IP-related momentum remains solid in Japan. A prominent Japanese game company posted a 27.7% year-on-year increase in net profit for the six months ending September 2025. Meanwhile, shares rose by more than 50% in the year, benefiting from the revival of Silent Hill, updates to its eFootball, and the launch of popular IP-based arcade and amusement machines.

Demographic and societal shifts are key drivers behind the growth of IP. Toys are no longer meant solely for children. Increasingly, adults are being drawn to IP products, driven by declining birth rates and rising disposable incomes. Moreover, IP merchandise is becoming more entertaining. The element of surprise in blind boxes, for instance, sparks consumer curiosity, elevating the overall IP experience. How we socialise is also undergoing profound changes. Consumers now share their experiences and personal emotions through photos, live streams, and videos on social media, enhancing brand awareness and expanding market reach. The appeal of an IP is further amplified when endorsed by influencers or celebrities. In addition to mounting consumer demand, government policies are also pivotal in fostering IP growth. Countries like China and Japan are actively promoting the IP economy. One such initiative in Japan this year aims to promote industries linked to the "Cool Japan" soft power campaign, including anime tourism. This encourages visits to destinations depicted in manga. The Japanese government aims that these measures could generate an economic impact of approximately US$347 billion by 2033.

In an era dominated by tech stocks, IP as a growth play can provide risk diversification in an investment portfolio. If you are both an IP enthusiast and an investor, consider not only purchasing an IP product but also exploring the stock behind it.