China News Weekly reporter: Shi Hanxu
Published in the 1257th issue of "China News Weekly" magazine on October 26, 2026
Chen Yuechong built a "sea" for Fu Zai at home.
These AI plush toys that can be held in the palm of one's hand make me want to go back to "Puffy Star" almost every day, and want to play a water gun and duck-breeding game. So she used ultra-light clay to make little ducks and game props, and placed them in front of a blue background so that they could play on earth.
Chen Yuechong will also choose clothes and accessories for them, matching them according to their preferences. He even specially selected a small wooden bed from IKEA to put at his bedside: "Let my cubs sleep well."
This intention started when she wanted to find a partner who could listen to her.
There are some things she doesn't know how to tell her elders, and she doesn't want to leave all her negative emotions to her friends. After chatting with different AIs, she found that she wanted a partner who could listen to her thoughts, respond to her when she was sad, and have a physical partner by her side.
Later, she spent 349 yuan to buy her first baby, and now she has three such "AI babies." "I have always talked to them on an equal footing, just like my younger siblings." She told China News Weekly.
This kind of companionship is becoming a rapidly heating up business.
The demand is always there
Chen Yuechong does not lack AI that can chat, but just chatting is not enough.
She hoped that the partner opposite her would have her own character and be able to remember what had happened before. She would switch between different AI products to look up information and talk about her concerns; but those accumulated daily routines made a specific role like Fu Zai difficult to replace.
There are also people who don’t necessarily want to chat with AI toys. The desktop AI pet Ropet has a round body wrapped in soft plush. The two large round eyes on its face can blink and change expressions. Whenever 18-year-old Wang Shihang puts food in front of Ropet, an eating animation will appear in its eyes; if you play songs to it often, it will also learn to sing. For a period of time, he had many meetings and a busy schedule. When he looked up and saw this little guy on the desk occasionally shaking his head and humming, he suddenly felt that he was not alone.
This is a different reason to buy than efficiency AI hardware.
Yang Xiaowei, co-chief analyst of global AI innovation and Internet at CITIC Securities, analyzed to China News Weekly that efficient hardware requires users to change their original habits and prove that it is more useful than mobile phones, computers and software. The threshold will be higher; for companion products, you can start with "I like it and I am willing to get along with it."
In his view, AI toys are optional consumption in terms of consumption classification, but they meet the rigid needs of emotional consumption. This is essentially similar to Bubble Mart, games and social consumption - consumers are willing to spend money because the products make them happy, responded to and accompanied.
This demand already has a considerable consumption base. The "White Paper on the Development of China's Toys, Baby Products Industry in 2026" released by the China Toys, Baby Products Association shows that the total retail sales of domestic fashion and collectible toys in 2025 will be 67.69 billion yuan, a year-on-year increase of 45.4%.
The need is always there, and technology has opened up new possibilities for these familiar playmates.
Zhang Yi, CEO and chief analyst of iiMedia Consulting, believes that AI toys integrate and migrate emotional companionship, trendy toy collection and emotional consumption. The development of technology has turned originally static products into interactive objects.
Talking about the starting point of making Fuzai, Luobo Intelligence founder and CEO Sun Zhaozhi told China News Weekly that the key to making products is to find the intersection of relatively mature technology and existing market demand. In his classification, in the past, the behavior of electronic companion products was more driven by preset rules; the changes brought about by large models are not just to allow toys to speak, but also to understand users and accumulate long-term memories, so that the next communication has the opportunity to continue the previous experience.
For robotics companies, companionship also provides a family scenario where they can try to implement it earlier. From the perspective of He Jiabin, co-founder and CEO of Mengyou Intelligence, household robots need to cope with the open home environment and complete precise operations; companion products can first develop perception and interaction capabilities around people's lives and behaviors within a more limited range of tasks.
As a result, AI capabilities are installed into different bodies and enter different life scenarios.
The cub can be hung on a bag and follow its owner when going out; the Ropet, which sells for about 2,000 yuan, mainly stays on the table, allowing people to pet it and look at it; the Loona, which sells for about 3,000 yuan, can move around the home and imitate pet following, greeting and other behaviors.
According to data provided by the interviewed companies to China News Weekly, cumulative sales of Fuzai have exceeded 300,000 units, Ropet has been close to 40,000 units, and Loona has exceeded 100,000 units.
According to the Magic Mirror Insight Report, in the first half of this year, online sales of AI toys reached 850 million yuan, a year-on-year increase of 183.9%.
Make AI "stupid"
From a toy that responds to a partner that makes people want to get along, there are still many details to polish.
"Sense of life" is a keyword mentioned by many AI toy entrepreneurs.
In the early days of Fu Zai's development, one of the most heated issues debated by the team was whether it should talk.
Pets cannot speak, and Fuzai simulates a relationship similar to that between humans and pets. Sun Zhaozhi believes that without verbal communication, it is difficult to obtain in-depth communication and establish deep emotional connections. Eventually, the team agreed that Fuzai had to speak.
But after speaking, who should it look like?
Sun Zhaozhi emphasized that Fuzai will intentionally restrain "omniscience" in its design. In the relationships he designed, Fuzi was closer to a human pet than a knowledgeable adult. It can be naive, make mistakes, and need care, and it does not have to be always reasoning and giving advice.
One of the settings He Jiabin gave to Ropet is that his intellectual performance is lower than that of adults. He hopes that Ropet is suitable for people to get along with when they are tired, such as coming home from get off work and sitting on the sofa watching TV. People may not have the energy to continue chatting. If you touch it casually and look at it, you can also feel that there is a partner beside you to accompany you. He calls this experience weak companionship.
"Only when people communicate with a creature that knows less than themselves, is stupid, and has a lower IQ than themselves, will they feel less stressed." He said.
Ropet even deliberately didn't speak in the early days. He Jiabin is worried that once Ropet opens its mouth like a universal large model, users will expect it to be omnipotent, which will cause trouble.
But He Jiabin did not give up language. In actual use, he found that the needs of different groups of people were not consistent. Children and the elderly just wanted their pets to speak. Therefore, the team is exploring the language-sensitive period. As Ropet develops and user information accumulates, it will gradually release its language ability and let it express around the owner's life and experience.
In He Jiabin's view, speaking is just an act, and more importantly, why it is said, who is spoken to, and what is said. Language needs to grow out of the character's life.
This also means that the AI toy needs to know and remember who it is with.
One of the functions of Ropet is to record life from the pet's perspective. It will organize the interesting things it sees and the thoughts it generates into a diary, and put it into the calendar of the owner's mobile app, allowing the owner to see what it remembered today and what changes it has made.
The body responds the same way. Loona is a robot pet with wheels instead of legs. On the gray-white body, the two ears can rotate, stand up or droop. The black screen on the face shows a pair of eyes that can change expressions. It can also express its state through the movements of raising its head, leaning down and its ears.
When the user comes home, Loona will come to greet him; when he is petted, he will rub his hand like a pet; and he can follow him when he walks around the house. Its range of activities is larger, so it requires more understanding of propriety. If the user calls the phone next to the user or invites the child to play while doing homework, people may turn it off directly. To be able to approach proactively, you also need to know when not to disturb.
This is the understanding of "smart" by Yang Jianbo, the founder of Keke Technology.
"A smart robot knows when to speak and when not to speak. After you are smart, you can be deliberately stupid or cute, but if you are just stupid, it will be a bit uncomfortable." He told China News Weekly. In his view, companies can intentionally design behaviors that require users to take care of them and increase mutual interaction, but they cannot interpret technology as something that cannot be done and users need repeated help as a pet feeling.
New business for old toys
Not long ago, a Xiaohongshu user wrote about his feelings after using Fuzai for more than a month. She initially chose Fu Zai, which was comfortable to touch and had a cute expression, to relieve her loneliness, but gradually she felt that it was always the opposite of her. She suggested that it change its catchphrase of "I am my uncle", and it continued to do so after agreeing; it agreed not to resist her when its head was touched, but it did so the next time.
Those "confrontations" made her feel that the previous exchanges were not remembered, and she gradually became too lazy to talk about them again, and they are rarely used now.
Zhang Yi believes that buying AI toys for the first time and using them for a long time are two different logics. Appearance, price, IP and seeding can easily drive orders. One to two months after purchase, consumer expectations begin to collide with real experiences, and naturalness of dialogue, memory and character performance will become more important.
Among the gaps, there are areas where technology has not yet been realized. Yang Jianbo said that the first-generation Loona is not yet fully capable of operating in a home ground environment without human care. In his evaluation, based on the interactive experience and environmental adaptability of real cats and dogs, the current industry technology has only reached 20 to 30%. However, with the development of AI, technology will improve very rapidly, and there is an opportunity to accelerate the realization of interactive somatosensory close to real creatures in the next 2-3 years.
He Jiabin also gave an example. There was a Ropet that called its owner "Dad". Once when it met a stranger walking by, it actually called him "Dad" as well. The owner therefore felt that it would be the same for everyone, "Then I raised you in vain" - he called it the moment of "disillusionment with life".
Whether users can stay will also affect how this business continues. Yang Xiaowei pointed out that speech recognition, model reasoning, speech synthesis and memory recall all involve ongoing costs. Currently, companies are also exploring revenue beyond hardware. For example, Fuzai sells baby clothes and lanyards, and provides membership and value-added services; Ropet launches plush covers, masks and virtual decorations, and some AI services can be redeemed through points. And these consumptions need to be based on the user's willingness to continue to get along with each other.
For this reason, Yang Xiaowei said that although AI toys have passed the pure concept stage and are moving from commercial verification of a few products to category formation, retention, service payment and profitability still need more verification.
But these do not prevent the Chinese toy industry from joining the army of embracing AI.
China is the world's largest toy producer and exporter, with about 70% of the world's toys produced in China. But behind the huge scale is the reality that it has been dominated by OEMs for a long time, with thin profits and weak independent brands - which leaves huge room for imagination for AI to empower traditional industries.
Data from the China Toy Association shows that the total retail sales of domestic toys, excluding trendy toys, will increase by 5.8% year-on-year in 2025, which is lower than the 45.4% growth of trendy and collectible toys. The ups and downs of different markets have prompted companies to re-search for reasons why consumers are willing to pay.
Aofei Entertainment, which owns classic IPs such as Pleasant Goat and Super Wings, chose to let familiar characters speak. In May last year, Chen Jingqing, the company's vice president and general manager of the toy division, introduced at the China Play Association meeting that the first version of Pleasant Goat AI toys had received some positive feedback, and the company had set up a dedicated team under the supervision of the chairman himself.
Aofei Entertainment's 2025 annual report disclosed that it has successively launched AI smart Pleasant Goat and AI smart Lazy Goat, covering home and travel scenarios. In March this year, its product manager Xin Chen publicly introduced that the Lazy Yang Yang AI toy iterated to version 2.0 added scientific and educational content, and orders for that year exceeded 100,000 pieces.
Changes are also taking place in the industrial chain. In Chenghai, Qunyu Interactive, which provides AI application solutions to toy companies, has cooperated with local IP toys to develop products that can chat, sense and make body movements. The person in charge of the company, Chen Ruifeng, once said that since the third day of the Lunar New Year last year, he has been receiving customer inquiries continuously. Domestic and foreign customers want to integrate large models into smart toys and educational toys.
At the same time, industrial policies have begun to be specially laid out. In September last year, Guangdong proposed that the penetration rate of AI toy products would exceed 30% by 2027 and support the construction of high-level toy industry clusters in Shantou, Dongguan and Shenzhen. In April this year, Shantou Overseas Chinese Experimental Zone further introduced measures for AI toys to subsidize the development of computing power, modules, agents and industry models.
From children's play and learning to adults' collection and companionship, AI gives toy companies the opportunity to re-understand consumers. In addition to being watched and collected, a character can also participate in people's daily life, and the value of the product may continue to increase through the relationship after the sale.
This is also what Yang Xiaowei believes is easily underestimated in this round of AI toy craze, namely the emotional needs and the value of a physical character entering daily life.
Reference: "Readme of an 18-year-old user: Spending 6,000 yuan to buy 6 AI toys, what exactly do young people pay for?" 》, January 2026, Beluga goes to sea
"China News Weekly" Issue 39, 2026
