---
title: "Inventory Overload in Anime Merchandise: Who Created This 'Mass Overproduction'?"
description: "Passive upstream, blind expansion and fragmentation among midstream and downstream players constitute a systemic crisis in anime merchandise retail, making a shakeout inevitable once market fluctuations occur. After the boom of the 'merchandise元年' faded, the anime merchandise business quickly entered a cooling-off and adjustment period. The author learned from multiple channels that since late last year, inventory backlog has become an industry-wide problem, affecting chain brands, wholesalers, and terminal stores, leading to varying degrees of financial losses. 'Inventory is the worst problem in this business now...'"
author: "新声Pro"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2025-06-25"
categories: "Dealer Operations"
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citation: "新声Pro. “Inventory Overload in Anime Merchandise: Who Created This 'Mass Overproduction'?.” New Distribution, 2025-06-25. https://xinjignxiao.com/en/articles/inventory-overload-in-anime-merchandise-who-created-this-mass-overproduc-9a5bec42/"
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# Inventory Overload in Anime Merchandise: Who Created This 'Mass Overproduction'?

> Passive upstream, blind expansion and fragmentation among midstream and downstream players constitute a systemic crisis in anime merchandise retail, making a shakeout inevitable once market fluctuations occur. After the boom of the 'merchandise元年' faded, the anime merchandise business quickly entered a cooling-off and adjustment period. The author learned from multiple channels that since late last year, inventory backlog has become an industry-wide problem, affecting chain brands, wholesalers, and terminal stores, leading to varying degrees of financial losses. 'Inventory is the worst problem in this business now...'

**Source** | New Sound Pro
**Passive upstream, blind expansion and fragmentation among midstream and downstream players constitute a systemic crisis in anime merchandise retail, making a shakeout inevitable once market fluctuations occur.**
After the boom of the 'merchandise元年' faded, the anime merchandise retail business quickly entered a cooling-off and adjustment period.
The author learned from multiple channels that since late last year, inventory backlog has become an industry-wide problem, affecting chain brands, wholesalers, and terminal stores, leading to varying degrees of financial losses.
"Inventory is the worst problem in this business now. Some chain stores have inventory ranging from tens of millions to over a hundred million. Wholesalers hold a batch, store owners hold another, stacking thousands of boxes. Some brands say they're willing to sell at 30% of the price, but I wouldn't even take it at 10%," a wholesaler serving hundreds of merchandise stores nationwide told us.
The market cooling of blockbuster IPs, especially top Japanese anime IPs, is the direct trigger for inventory overload. Multiple practitioners pointed out that massive, homogeneous merchandise flooding the market quickly dampened consumer enthusiasm. "The speed and craziness of market expansion far exceeded expectations," lamented Wu Weicheng, founder of Chaowan Xingqiu.
The root of this market expansion chaos lies in the bubble-like development caused by industry overheating, attracting an excessive number of entrants. Since last year, a large number of pan-content companies, retail transformers from stationery and toys, and individual merchandise stores have flooded in, generally lacking long-term operational capabilities for overseas IPs and pursuing quick cash-out.
Meanwhile, Japanese copyright holders have information lag and lack localized operations in the Chinese market, leading to low licensing thresholds and over-expanded distribution systems.
Passive upstream, rapid expansion and fragmentation among midstream and downstream players constitute the root of industry turmoil. Once market fluctuations occur, a round of elimination and reshuffling is inevitable.
Recently, as irrational players are forced to exit and supply side actively contracts, new signals are emerging: On the IP front, domestic IPs with upstream and downstream control capabilities are rapidly gaining market share, including games, anime, danmei novels, and other diverse types. On the channel front, leading chain channels are emphasizing refined operations, participating in deep incubation of differentiated IPs, while increasing the proportion of online channels.
Given the reality that a new wave of blockbuster Japanese anime IPs is unlikely to fill the gap, the anime merchandise business is being forced toward a more refined, diversified, and sustainable long-term model.
**Industry-wide Inventory Pressure**
It should be noted that for the retail industry, inventory pressure within a certain period is a normal phenomenon. Especially near holidays, to coordinate promotions and ensure supply, merchants usually proactively stockpile inventory.
But now, merchandise inventory backlog has evolved into a widespread industry crisis affecting chain brands, wholesalers at all levels, and individual stores. Since the second half of last year, according to our understanding, multiple anime merchandise chain brands have faced inventory backlogs of tens of millions or even over a hundred million. A wholesaler told us he has over a million yuan worth of inventory from different batches, which he can hardly sell now, "stuck in his hands"; moreover, sales at the hundreds of stores he cooperates with have generally declined by at least 30%.
Nationwide, there has been a "wave of store closures." An individual merchandise store owner told us he recently decided to transfer the store and all goods at a low price to cut losses. For such loss-making stores, "inventory recycling" services have appeared on Douyin and Xianyu. Industry insiders familiar with the situation told us that these inventories are resold to stores at extremely low prices, "some merchandise stores even need these slow-moving goods to fill their shelves."
Behind the overloaded inventory backlog is a significant fluctuation in the anime merchandise retail market in the second half of the year.
Multiple interviewees described similar timelines: merchandise retail hit its peak in the first half of last year, "those who entered then generally made money"; but from the second half, especially after National Day, "it became obviously hard to sell."
The market decline of blockbuster IPs, especially top Japanese anime IPs, directly triggered the inventory overload. Popular Japanese anime IPs including "Haikyuu!!", "Blue Lock", "Jujutsu Kaisen", "Hatsune Miku", as well as domestic top IPs like "Mo Dao Zu Shi" and "The Lost Tomb", all experienced fluctuations from supply shortage to inventory pile-up.
Since last year, to clear inventory, various channels have launched "low-price" promotional sales: lucky bags, raffles, and other promotions frequently appear. A large amount of merchandise has flowed into "HotMaxx" stores, low-price live-streaming rooms, and even Xianyu's "sold by weight" sections. On second-hand platforms like Xianyu, prices for top IPs have collapsed; rare character stickers once speculated to four or five figures have dropped to below a few hundred yuan.
Inventory problems are equally severe across different channels, "domestic merchandise collapses first, Japanese merchandise follows." Domestic merchandise refers to products produced and sold domestically by domestic brands under Japanese anime IP licenses; Japanese merchandise refers to products released in Japan, introduced by distributors for domestic sales, or traded in second-hand markets.
Chaowan Xingqiu primarily produces domestic merchandise, with some externally sourced products. Founder Wu Weicheng revealed that although annual revenue grew, the overall revenue quality in the second half declined, with various price cuts and clearance sales. "That's just rolling turnover, not making money, or making very little."
March Beast primarily deals in Japanese merchandise distribution. Founder Shen Hao told us that sales in the second half of last year fell by more than one-third. Among the brand's 40-plus stores, those in first-tier cities like Beijing, Hangzhou, Wuhan, Shenzhen, Chengdu, Shanghai, Suzhou, and Chongqing are in the first tier, with average monthly revenue reaching 1.3 million yuan. But at the worst point at the end of last year, it dropped to about 800,000 yuan, recently recovering slightly to around 1 million yuan.
According to public information, since this year, multiple anime merchandise chain brands such as Guguguangu, Manku, and Guzi Kuaipao have continued to expand franchise businesses. A store owner who has franchised multiple brands told us that franchise policies vary significantly among brands. Some brands have standardized management, but individual brands have "double standards for direct-operated and franchise stores," with franchise store supply policies far inferior to direct-operated stores, making him regret it now, feeling like he became the brand's "leek for clearing inventory."
**Disorderly Expansion of Distribution Networks**
Multiple practitioners pointed out that the direct cause of the rapid market decline is the "mass overproduction" of top IPs—that is, the homogeneous, massive merchandise market quickly consumed consumer enthusiasm.
Behind the oversupply is a chain reaction caused by the uncontrolled expansion of anime IP licensing and distribution systems.
The merchandise industry has experienced explosive growth domestically, especially relying on the fan effect of blockbuster Japanese anime IPs. It should be noted that this boom has great particularity: it did not follow the traditional IP copyright industry chain logic but erupted from the midstream and downstream first, transmitting upward to Japanese IP holders, leading to lagging information feedback and forming a chaotic pattern dominated by the downstream.
In contrast, the trendy toy blind box industry also experienced an inventory crisis after the 2021 peak, but leading companies like Pop Mart have the ability to independently incubate IPs and possess strong supply chain and channel control capabilities. Inventory can serve as a rubber band to adjust upstream and downstream rhythm, so they were less impacted.
In the merchandise market, a practitioner told the author that some copyright holders lack long-term operational awareness, especially Japanese anime IPs, which are conservative toward the Chinese market and often react slowly due to language, cultural, and market structure differences. "When the market is hot, many people want licenses, and IP holders or agents lack management, leading to, for example, an IP with about 10,000 fans producing products for 100,000 fans."
In the midstream and downstream, anime merchandise chain brands act as both producers and distributors, as well as C-end sellers and B-end suppliers. Many brands and wholesalers directly supply B-end, with low entry barriers, further exacerbating blind market expansion. In fact, multiple practitioners we interviewed believe that many new players may not be familiar with anime, "pursuing mass production and rapid cash-out during the licensing period."
According to statistics, at least 39 cities nationwide have more than 30 merchandise stores each, with a total exceeding 3,000. The owner of Yiyuan Xinggu, a chain store in Nanchang, Jiangxi, told us that the number of merchandise stores in Nanchang surged from one or two to 40-50 in just over a year, with three or more in the same business district.
For midstream and downstream players, lacking IP control also means extreme passivity.
Once an IP itself faces content crises or reputation collapse, consumer enthusiasm quickly fades, triggering a "crash." For example, after the "Jujutsu Kaisen" ending controversy, a large number of fans quickly quit.
**Xiaohongshu Post About Quitting Jujutsu Kaisen**
Meanwhile, product homogenization is extremely severe. Character art from popular IPs like "Haikyuu!!" and "Blue Lock" may be reused by more than 20 brands, even leading to consumer self-mockery like "this art hugged me when I was a kid." A fan complained to us that some domestic merchandise products have rough designs and cheap aesthetics, "just treating merchandise as sticker processing, completely disrespecting fans."
When the market fluctuates in a short period, due to the inflated and chaotic system, many brands' adjustment speed from sales to production and purchasing appears lagging. A practitioner told us that some stores still have a large amount of inventory unsold, and new batches are about to arrive, with insufficient space to display.
Due to the lack of unified upstream supervision, distributors and terminal stores at all levels have large operational leeway, chaotic price systems, and widespread gray areas. Especially under the industry's common "deposit order system," once market conditions change, terminal stores often return goods or disappear, causing losses to upstream wholesalers. A distributor revealed that when terminals don't accept goods, they can only return them; if not, they make a fuss, making business very tiring.
Even the uncertainty in the Chinese market has transmitted to the Japanese IP supply chain. March Beast founder Shen Hao is very familiar with the Japanese market. He observed that fluctuations in the Chinese merchandise market have even led to the bankruptcy of a batch of Japanese IP derivative midstream and downstream enterprises. Because the ordering cycle for Japanese merchandise is long, at least 3-6 months in advance, goods ordered in mid-year based on market conditions were actually shipped by year-end. "For example, for 2 million yuan worth of goods, distributors even gave up their deposits and disappeared."
These already-produced inventory goods still need to be digested through market channels. Although the original purchasers exited, there are still many interested secondary distributors domestically to take over. These goods often flow into domestic channels as non-licensed "gray goods" at prices far below market rates, further disrupting the normal price system.
**How to Develop Healthily After the Pain Period**
As early as the first half of 2024, in our report on anime merchandise retail, we observed: the merchandise business seems low-barrier, but it actually involves multiple links such as IP licensing, retail models, and subculture operations. With a massive influx of participants, this market is highly likely to undergo a round of "educational" adjustment.
The industry changes over the past year have confirmed this prediction. The industry generally believes there will be another round of market reshuffling this year, including IP operation companies in different positions, chain brands, distributors at all levels, and terminal stores, all needing to find their own solutions. A large number of companies that entered the industry recently but lack IP understanding will exit again.
One basis for judgment comes from changes on the IP front. The core competitiveness of anime offline retail is determined by IP, but at this stage, there is no absolute top IP.
After blockbuster Japanese anime IPs generally failed, quality new series need a long time to cultivate fans, resulting in no replacement blockbuster in the market. March Beast founder Shen Hao once told us that "Blue Lock" accounted for over 25% of the company's revenue in 2023, but now that share has rapidly fallen to less than 5%. Currently, almost no IP in its stores accounts for more than 20% of sales.
Over-concentrated investment in a single IP not only overdraws its commercial value but may also lead to an imbalance in the content ecosystem. This means that balanced and differentiated IP layout is becoming more important.
March Beast has already adjusted its IP strategy and product selection approach. Shen Hao emphasized, "The most critical thing now is to control quantity, and the essence of product selection has always been IP selection." In this year's store planning, March Beast will further increase efforts to introduce more different Japanese and Chinese IPs. Currently, its Chinese IP share has grown to about 40%.
The "2025 Xianyu Merchandise Trend Report" shows that domestic game merchandise has surpassed Japanese anime IPs to become the market's dominant force. Thanks to local game companies' control over IP operation, product, and channel capabilities, game merchandise, despite also having inventory issues during this adjustment, shows stronger risk resistance.
Represented by second-tier games like Genshin Impact, Arknights, Ensemble Stars!, and several major domestic otome games, these game companies tend to choose derivative product partners with business or capital connections, leaving limited space for distributors and retailers to intervene, thus avoiding downstream expansion chaos.
For example, GOODSLOVE is a derivative product offline retail brand under Xueye, which has provided derivative OME and operation services for multiple Tencent IPs like "Light and Night"; Chaowan Xingqiu's Pre-A round investment was led by miHoYo, and its IP matrix has always had a relatively high proportion of domestic game IPs. Papergames even controls the peripheral channels for three IPs—"Mr. Love: Queen's Choice," "Love and Deepspace," and the "Nikki" series—adopting an official merchandise online pre-sale model.
Beyond game IPs, some domestic IPs with long-term operation strategies and vertical IPs targeting specific circles also have significant advantages in the current market environment.
A distributor mentioned that the domestic anime IP "Non-Human" has achieved good sales data due to its content advantages and relatively steady market release rhythm. The reason is that its copyright holder, Fenzi Hudong, has stronger control over production and channel links, allowing timely adjustments based on market feedback.
Domestic danmei IPs are also currently popular among many consumers. Among the individual store owners in lower-tier cities we contacted and chain brands we visited in Beijing, some stores said the best sellers were danmei IPs like "Little Mushroom" and "Wait for Me After School." The just-concluded CP31 doujin event's popularity also confirms the commercial logic of scarcity operation.
Similar to the development process of the trendy toy industry through its inventory period, companies with stronger brand awareness and long-term operation capabilities will clarify their advantages and directions during market reshuffling. For example, Pop Mart chose to layer and prioritize IP operations internally, flexibly transform its supply chain, and expand beyond blind boxes.
Entering the stage of professional competition, anime merchandise retail brands are also building competitive advantages through refined operations such as improving sales systems and service quality, and enhancing IP acquisition capabilities. The threshold for distribution channels has increased, brands with IP and product advantages are more competitive, and brands with strong financial strength can better cope with market fluctuations.
Since the second quarter of this year, March Beast's turnover has stopped declining and steadily recovered. This year, March Beast will continue expanding stores, focusing on building a differentiated supply system for its offline stores, designing tiered product combinations, and customizing exclusive IP matrices based on the characteristics of each business district.
Chaowan Xingqiu also plans to slow down store expansion this year and focus on refined and in-depth operations of existing stores. Its "Genshin Impact" Furina themed store, launched in collaboration with miHoYo at the beginning of the year, has achieved breakthroughs in IP pop-up experience formats. This summer, it will also launch over ten limited pop-ups with Mianhua, and start more overseas projects. At the same time, Chaowan Xingqiu is enhancing user stickiness through special activities like autograph sessions and one-day store managers, forming differentiated competitive advantages.
Currently, Chaowan Xingqiu also plans to upgrade its IP operation strategy, focusing on building a cultivation system for potential IPs. For IPs with basic recognition but not yet popular, the company will invest up to ten million yuan in market budgets, using its offline promotion system across over 100 stores combined with new media matrices for deep incubation.
"If everyone rushes to speculate on popular IPs, it will still lead to homogenization. Next, we may need to do more things from 0 to 1."
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## Citation metadata

- Publisher: New Distribution
- Author: 新声Pro
- Published: 2025-06-25
- Canonical: https://xinjignxiao.com/en/articles/inventory-overload-in-anime-merchandise-who-created-this-mass-overproduc-9a5bec42/
- Original source: https://mp.weixin.qq.com/s/aNohCv7mpJ6dbpYekRly8Q

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