The History of Kayou: How a Failing Luggage Business Became China's $1.4 Billion Card Giant

by psind707

In early 2026, packs of trading cards started turning up in the toy aisles of Walmart and Target priced at $3.99. The names on them were familiar enough to American shoppers: My Little Pony, Naruto, the cult Italian label tokidoki. The name of the company that made them was not. Almost nobody in the United States had heard of Kayou (卡游). What those shoppers didn't know was that Kayou had already booked something like $1.4 billion in card sales the year before and owned roughly seven out of every ten trading cards sold in China. It was not a newcomer testing the waters. It was one of the biggest collectibles companies on earth, finally bothering to introduce itself to the West.

Here's how it got that big.

A toy man from Zhejiang

The story starts with a man named Li Qibin and a business that was going under. In the 1990s Li gave up a steady government job as a township water-conservancy worker in Kaihua County, in Zhejiang's Quzhou, to help run the luggage factory his father had built. The factory ran into serious trouble. What carried Li through the following years was the toy and animation-merchandise trade, the grubby, license-dependent world of character goods, which is where he learned the business he would eventually dominate.

The company itself, Zhejiang Kayou Culture Communication Co. (it has also gone by Zhejiang Kayou Animation), was registered around 2011 and based in Zhejiang, with later ties to Shanghai. For most of its early life it was an unremarkable maker of anime-themed toys and merchandise. So when you see "founded in 2011" in a company profile, that's the entity, not the phenomenon. The phenomenon arrived later, and it arrived because of one licensing decision.

The Ultraman bet

In 2018 Li put the company's weight behind a single property: Ultraman, the Japanese superhero franchise that's been a fixture of Asian childhoods since the 1960s. Ultraman was owned by Tsuburaya, with the mainland rights running through Bandai and a Chinese licensing agent. It was an obvious idea that, oddly, nobody had executed well. Generations of Chinese parents had grown up with Ultraman and their kids loved him, but no one had turned that affection into a proper mass-market card line.

Kayou did, and in 2019 the numbers detonated. Salespeople and dealers later pointed to that year as the moment everything changed, and the cause was the new Ultraman series. The cards leaned on a rarity ladder collectors everywhere recognize, running from common N cards up through R, SR, SSR and on to HR and beyond, which turned ordinary schoolkids into traders chasing the next tier. By the company's own count, it had sold around a billion packs by September 2020. At the peak, Kayou was reckoned to hold well over 90 percent of the legitimate Ultraman card market in China.

The thing rivals couldn't easily copy was the printing. Kayou spent heavily on it, reportedly working up hundreds of distinct laser and holographic patterns and testing more than a dozen inks, and it installed imported automated lines that at full tilt could push out on the order of 100 million cards a day. Knockoff producers couldn't match the finish, and crucially, kids could tell. They wanted the real ones.

One license becomes a hundred

Ultraman was the proof of concept. After that, Kayou ran the same playbook again and again. My Little Pony arrived as a card series in 2020 and turned into its own craze, pulling in an audience far beyond the young boys who'd driven Ultraman; at points it was a hotter topic on Xiaohongshu than Pop Mart's Labubu. From there the licenses piled up: Naruto, Crayon Shin-chan, Identity V, Jujutsu Kaisen, Mo Dao Zu Shi, SpongeBob, Demon Slayer, Harry Potter, Transformers, DC, Marvel, even Tom and Jerry.

By the mid-2020s the catalogue ran to roughly 70 licensed properties inside China and pushed toward 100 worldwide. That spread mattered. It meant no single franchise could sink the company, and it positioned Kayou at the center of China's booming guzi economy, the sprawling market for anime and game merchandise. Cards did most of the work, with badges, stationery, and plush filling out the rest.

Owning the IP, not just renting it

There's a ceiling on how far you can go renting other people's characters, and Kayou knew it. In 2023 it launched Kayou Three Kingdoms (Card Games of the Three Kingdoms), its own original series, built on the classical Chinese history that every Chinese kid already absorbs at school. It worked. The line gave Kayou the one thing a pure licensee never has: a flagship it actually owns, with no royalties flowing out and no licensor to answer to. Three Kingdoms has since become part of the company's identity, and it's the property executives keep circling when they debate whether to bring something distinctly Chinese to Western shelves.

The money

Kayou's financials don't look like a toymaker's. In 2024 it reported revenue of about 10.06 billion yuan, somewhere around $1.4 billion, up roughly 278 percent on the year. Adjusted net profit came in near 4.4 to 4.5 billion yuan, a jump of close to 380 percent. Industry data put its share of China's trading-card-game segment at about 71 percent, with a decent slice of the pan-entertainment stationery market on top.

Growth like that draws money and attention. Kayou counted top-tier backers in its earlier rounds, Sequoia among them, and in mid-2025 it turned up at number 66 on a global unicorn ranking carrying a valuation of around 69.5 billion yuan. None of this happened in a vacuum: China's trading-card market was estimated at 12.2 billion yuan in 2022 and projected to reach about 31 billion yuan by 2027, riding the same wave of nostalgia, fandom, and livestream selling that lifted Labubu and the rest of the designer-toy world.

Going abroad, starting in Bangkok

Having more or less filled up its home market, Kayou looked outward. Its first overseas brand store opened in Bangkok, built around a "product plus content plus experience" retail concept with hits like My Little Pony front and center. Then in March 2026 came the American debut: those $3.99 packs of My Little Pony, tokidoki, and Naruto landing at Walmart, Target, GameStop, Barnes & Noble, and Amazon, with Demon Slayer and more Naruto queued up behind them. The build quality, holographic foils, gold stamping, anti-counterfeit features, was more than American collectors expected to find in a four-dollar pack.

Kayou also exported a habit from home: when a set sells out in China, it stays out of print. That discipline has produced some startling numbers on the secondary market, with out-of-print Chinese My Little Pony boxes that once retailed near $30 reportedly changing hands for $3,000 or more. Whether American buyers chase scarcity the same way is one of the genuine unknowns hanging over the whole expansion.

The IPO that keeps not happening

The last thread is the stock listing, and it's been a slog. Kayou first filed for a Hong Kong IPO in early 2024, with CICC, Morgan Stanley, and JPMorgan lined up as underwriters, but it couldn't get regulatory clearance to proceed; Chinese approvals had slowed and global markets were choppy. The company didn't drop the idea. In February 2025 reports had it reviving the plan, aiming for something around $500 million, and by May 2026 it had filed again, with the same three banks behind it. As of the middle of 2026 it was one of the marquee consumer names in a crowded Hong Kong listing queue, still trying to convert a very profitable card business into a public offering. That unfinished business is the main reason a company this large still gets called "upcoming."

The part nobody likes to talk about

Success this fast came with a backlash. Chinese consumer advocates and the press have pushed hard on the question of children's spending, with the rarity mechanics and chase-card psychology drawing comparisons to gambling and pulling scrutiny from the Consumers Association. It's the obvious soft spot, and it isn't going away as Kayou expands. The same loop that makes the cards so good at separating kids from their allowance abroad is the one regulators tend to notice.

Strip it all back and the arc is hard to believe: a man trying to save a failing family factory ends up running the dominant force in the fastest-growing card market in the world, with close to 100 licenses, its own original franchises, a foothold in American retail, and a pending listing in Hong Kong. The 2018 Ultraman bet looks, in hindsight, like one of the sharper product calls in recent Chinese consumer history. The open question is whether the print-quality edge, the scarcity discipline, and the licensing muscle travel to mature Western markets, and whether the regulators let the model travel intact.

Sources: Reuters, China Daily, Global Times, KrAsia, The Licensing Letter, Nerdbeak, In Asian Spaces, CGC Cards, Bamboo Works, and Baidu Baike, accessed June 2026. Revenue, market-share, and valuation figures reflect company and media reporting and should be checked against Kayou's IPO prospectus once it's finalized.