This photo taken on Feb. 13, 2025 shows a poster for the Chinese animated film "Ne Zha 2" at a cinema in Chaoyang District of Beijing, capital of China. [Photo/Xinhua]

Amid the immense popularity of "Ne Zha 2," fans of the Chinese blockbuster are facing a race against time to purchase blind boxes featuring the film's main character, as stocks quickly deplete both online and at retail locations.

"Ne Zha-themed products sell out quickly as soon as they are put on the shelf. Recently, we've seen dozens of people signing up for pre-sales every day," said a staff member at Pop Mart, China's popular toy maker, in Beijing.

Like "Black Myth: Wukong," the country's first 3A video game taking the world by storm in 2024, "Ne Zha 2" has become another cherished domestic creation rooted in traditional Chinese culture. Both cultural phenomena have successfully turned fan enthusiasm for their intellectual properties (IPs) into lasting profits.

As of Saturday, the sequel to the Chinese mythical franchise "Ne Zha" has seen its box office revenue worldwide, including presales, surpass 13 billion yuan (about 1.8 billion U.S. dollars), securing the eighth spot on the list of highest-grossing films of all time worldwide, according to ticketing platforms.

Beyond the silver screen, the animation is also making waves in other areas of the consumer market. Sales of its merchandise on Taobao, a leading e-commerce platform in China, surpassed 50 million yuan earlier this month.

Noticing the surge in demand for "Ne Zha 2" merchandise, an authorized manufacturer in Dongguan, located in south China's Guangdong Province, quickly ramped up production after the film's Chinese New Year release, aiming to seize the significant market opportunity created by the rise of Chinese IP.

"We have received orders for nearly 1.4 million sets of peripheral products. While operating overtime every day to produce the products, our factory is also developing new items based on the film," said Chen Qi, general manager of the company, noting that the company hopes to cooperate with more domestic brands to develop IP derivatives in the future.

This growing interest in domestic IPs is reflected across factories in China, where companies are shifting their focus from exports to tapping into the expanding opportunities within the domestic market.

This year, China's IP derivatives market is expected to exceed 500 billion yuan, CITIC Securities said in a research report.

More than 49,000 enterprises in China are involved in the trendy toy economy, with approximately 13,000 of them having registered in 2024, according to Tianyancha, a corporate information provider.

The rapid growth of China's trendy toy market highlights the country's strengths in IP, supply chain capabilities and consumer potential, said Li Yongjian, a researcher at the National Academy of Economic Strategy of the Chinese Academy of Social Sciences.

"Ne Zha 2" isn't the first IP to spark a surge in merchandise consumption in China. In 2023, another domestic hit, "The Wandering Earth 2," raised over 140 million yuan through crowdfunding for its merchandise.

Moreover, in January, Chinese retailer MINISO launched a store themed around "Black Myth: Wukong" in Beijing, attracting considerable attention as fans eagerly queued to purchase limited-edition items.

As the IP economy continues to grow, retailers like MINISO are capitalizing on the cultural and emotional appeal of beloved franchises.

Ye Guofu, founder of MINISO, said that Chinese consumers, especially younger generations, are increasingly prioritizing the emotional value attached to products, and this shift is expected to further drive the demand for IP-based merchandise.

These IPs not only showcase the depth of China's cultural heritage but also demonstrate how modern technology and creativity can breathe new life into ancient stories, making them relevant and appealing to today's generation. This synergy between tradition and innovation has laid a solid foundation for the booming IP derivatives market.

"Traditional culture needs to be revitalized with a modern touch," said "Ne Zha 2" director Yang Yu, also known as Jiaozi, adding that literary classics are the most valuable source of cultural IPs for animated films.

Zhao Xinli, dean of the Advertising School at the Communication University of China, noted that with the vast potential of the domestic consumer market, a well-established animation production system and the rich heritage of China's traditional culture, the country's cultural industry is set for an even brighter future.