From 2008 to 2013, Chinese IP licensing deals grew by 90 percent annually. Related retail sales reached $7.22 billion in 2015. Last year, they generated about $7.8 billion in sales, according to the International Licensing Industry Merchandisers' Association.

About 45 percent of global retail sales related to IP licenses can be traced to entertainment and cartoon characters, it said.

"Since creative cultural products represent a long-term investment, IP licensing can help accelerate the pace of creating assets. This will encourage producers to create more original IPs," said Li Qin, brand-licensing leader of Zhejiang Versatile Media Co Ltd, producer of Axel 2: Adventures of the Spacekids, a home-grown animation film which raked in 50 million yuan at the box office after its release in October last year.

Dong Minna, an analyst with market consultancy Analysys in Beijing, said though Chinese are craving for good cartoon IP deals, top-quality characters are relatively few and far between.

High demand and inadequate supply have pushed up prices of licenses for IPs with good quality to unrealistically high levels, Dong said.

Still, they are nowhere near the levels of some mature markets such as the United States, where IP licenses may be worth billions of dollars, according to Yaxley of Huhu Studios.