IT Home According to a report by “Tech Planet” on October 18, the “AI toys” industry has been booming recently. Based on data from the Ministry of Industry and Information Technology, the market size for AI toys in China reached 29 billion yuan in 2025, and is expected to reach 34.2 billion yuan in 2026. Data from Taobao for 2025 shows that transaction volumes for AI toy products increased by more than 1,600% year-on-year.ButThe investment in the entire AI toy market is cooling down significantly, with highly homogeneous products and a high return rate.。
A AI toy industry expert revealed that in first-tier cities, when people buy AI toys, their decision-making is driven by considerations such as educational investment or trying out new technologies. The average order value can reach thousands of yuan or even ten thousand yuan. Parents will research the capabilities of large models, the quality of conversations, and the educational content. In lower-tier markets, the decision-making logic is simpler: it’s cheap, and it can talk to children, which is better than ordinary toys.
Currently, gift giving has become the main purchase scenario for “AI toys.” After this year’s National Day long holiday, data from some manufacturers indicate that sales in the first half of this year have already exceeded those of last year. Especially in places with a developed toy supply chain such as Dongguan and Yiwu, some businesses have made substantial profits.
However, many brands that make quick money are also entering this market. Behind the short-term explosive growth, repeat purchases and user experience do not keep up. In addition to homogenization, the high return rate remains high. After the demand for novelty, AI toys quickly became “items that gather dust on the desk”.
Industry reports indicate that the return rate for AI toys consistently exceeds 50%. On e-commerce platforms such as Taobao, JD.com, and Pinduoduo, some trendy toy companies implement conditional returns to reduce the return rate—meaning products cannot be returned after being activated online. However, this also leads to a decline in sales.
Regarding this, “Tech Planet” stated that in terms of business models, the barriers for AI toys lie in large model interaction capabilities, networking and computing power cost control, and subscription service ecosystems. Currently, the “low-price competition” has become the most direct signal, while the ultimate form of AI toys is still being explored. The industry is waiting for a critical point to arrive.