In the world of characters, cute means cash

People visit Starfield Hanam in Gyeonggi Province to explore the "Catch! Teenieping" festival in this May 2023 photo. Yonhap

On a sunny July day, Kim Eun-mi was excited to reunite with her 16-year-old niece, who had come to Korea from the U.S. for summer break. But her niece seemed even more eager to visit Pop Mart stores in Seoul than to see her — at least on the surface.

"She was absolutely determined to find a specific Labubu doll," Kim recalled. "We ended up going from one store to another just to help her get it. I knew it was popular, but her enthusiasm was on a whole different level."

Forget the idea that these are just children's toys. Adorable characters are taking the market by storm. From basic figurines to keychains and a wide array of merchandise, they've become a cultural phenomenon among Gen Z collectors who take real joy in the thrill of collecting.

One firm currently enjoying its heyday is Kosdaq-listed SAMG Entertainment. The animation production company is generating revenues in various areas based on its flagship intellectual property (IP), Teenieping.

The fairy characters captured the hearts of all age groups with the animated film "Heartsping: Teenieping of Love," released last September. It was the first Korean animation in 12 years to surpass 1 million moviegoers.

Driven by strong institutional buying, SAMG stock has jumped 635 percent over the past year, with JPMorgan and Morgan Stanley holding stakes of 5.16 percent and 5.28 percent, respectively.

Another Kosdaq-listed firm, Aurora, is also seeing solid growth. Its plush toy line, Palm Pals, has become a global success in the U.S. and Europe. Over the past year, the toy company's shares have climbed 172 percent, fueled largely by social media-driven marketing.

"As character consumption spreads beyond children to a broader age range, non-functional spending, driven by a desire to collect, nostalgia and emotional comfort, is increasingly translating into repeat purchases," said Eugene Investment & Securities analyst Lee Hyun-ji. "The growth potential of IP has become a key driver of both company performance and stock prices."

Similar trends are unfolding in China and Japan.

Labubu from China's Pop Mart is the most iconic example, often sold out due to soaring demand. Based on endorsements from K-pop stars such as BLACKPINK's Lisa, its stock has surged by 600 percent from a year ago.

In Japan, Sanrio, famous for Hello Kitty, is also experiencing a resurgence, with the company's stock surging 92 percent over the past year.