Article · AI translation
IT Home reported on October 18 that, according to Tech Planet, AI toys have recently become popular. Citing data from the Ministry of Industry and Information Technology, the report said China's AI toy market reached 29 billion yuan in 2025 and is expected to reach 34.2 billion yuan in 2026. Taobao's 2025 data showed that the transaction value of AI toy products grew by more than 1,600% year on year. Yet investment across the AI toy sector is cooling sharply, while products are highly similar and return rates remain high.
An AI toy industry practitioner said that in major cities, decisions to buy AI toys tend to be driven by investment in education or a desire to try new technology. The amount spent per purchase can reach thousands or even tens of thousands of yuan, and parents examine the capabilities of the underlying large models, the quality of conversations and the educational content. In smaller cities and less affluent markets, the decision is simpler: the toy is cheap, can talk with a child and is better than an ordinary toy.
Gift giving has become a major reason for buying AI toys. After this year's National Day holiday, figures disclosed by some manufacturers showed that their sales in the first half of this year had already exceeded their sales for all of last year. Some merchants have made substantial profits, especially in places such as Dongguan and Yiwu, which have well developed toy supply chains.
However, many brands seeking quick profits are also entering the sector. Behind the explosive short term growth, repeat purchases and user experience have not kept pace. Alongside the similarity of products, return rates remain high. Once the urge to try something new wears off, AI toys quickly become gadgets that gather dust on desks.
Industry reports show that AI toy return rates have remained above 50% for years. On ecommerce platforms including Taobao, JD.com and Pinduoduo, some trendy toy companies allow returns and exchanges only under certain conditions to reduce return rates: once a product is connected to the internet and activated, it can no longer be returned. But this also causes sales to decline.
On this point, Tech Planet said that, from a business model perspective, the barriers in AI toys lie in large model interaction capabilities, control of connectivity and computing costs, and the subscription service ecosystem. The current low price battle is the clearest signal, while the ultimate form of AI toys is still being explored and the industry needs to reach a tipping point.