It began in 1997, when Michael Lau Kin-man descended upon a Hong Kong toy exhibition with a series of G.I. Joes he had customised into hip-hop street fashion figures.

Lau and fellow designer Eric So are regarded as pioneers of the funky toy movement, not only rocketing Hong Kong into a scene massively popular in the US and Japan, but also setting the standard worldwide.

This movement comes complete with its own culture, rivalries, heroes and superstars creating a highly profitable and intensely competitive altered reality. The toys come in many different guises from 30cm vinyl figures, to vending machine-style characters and plush toys.

Serious collectors have been known to bid into the tens of thousands for various items, as limited editions mean many appreciate in value over time, although some new figures can cost as little as $10.

Toy specialist Lo Chi-ying says the phenomenon attracts a different breed to the average Toys R Us shopper, aged 15 to 50. 'They are those interested in pop culture, graphic design, things like that. Usually they are more experienced toy fanatics or collectors. However, we are always looking into ways of attracting younger audiences.'

With this ensuing boom, Lau and So have become worldwide celebrities, paving the way for a new generation of emerging talent further cultivating and advancing the industry.

Jason Siu is one such luminary.

Originally a comic writer, Siu has been a full-time toy designer for three years. 'I want to express my own ideas and concepts of life through design,' Siu says.

Indeed, his 'Land of Desire' figures, which can be seen at the new Hollywood exhibition of toy designs at LCX in Ocean Terminal, Tsim Sha Tsui from tomorrow, are his representation of the common value system and the temptations surrounding us all. 'This is a very good place for new designers,' he says of Hong Kong. 'It is a healthy environment to be working in, and supportive, too.'

However, the intricacies of the local market frustrate Siu. 'In Hong Kong, clients tend to pay more attention to value. Overseas, the foreign market is first and foremost interested in concept and design. Things are always improving here though, and even though the market is smaller than Japan and America, there are so many good new designers. It is very exciting.'

Collectively known as Brothersfree, Kenny Wong Shun-ming, Winson Ma Che-hung and William Tsang Chi-wai are members of another design group which has caused a stir.

Recently on the cover of TM magazine - the bilingual bible for the designer toy inclined - the Brothersfree have established themselves as high-end designer celebrities.

Coming from advertising backgrounds, the Brothersfree story began as a lark. 'When we started it was just for fun. We all grew up with toys and wanted to try make our own. We would design toys for our friends and then it just grew and grew,' Wong says.

Within a fiercely competitive market, the group enjoys the communal benefits Hong Kong offers. 'Here the designers work together and be together. This is very important as we all help bring out the strengths in each other,' Ma says.

Veterans of the exhibition circuit, Brothersfree say local fairs such as the ToyCon shows - held in April, August and December and attracting 20,000 visitors per event - are crucial to their success.

'Every year fans look forward to the show to see what is next and we show the rest of the world what is coming up,' Ma says. 'We also see what other designers are doing,'

Wong adds: 'The shows attract buyers and designers from all over the world, so it's a good opportunity.'

A symbol of the local scene's status, ToyCon has grown from an annual event since it inception eight years ago.

'We want to promote, encourage and give more opportunities to local designers,' event manager Belinda Ching says. 'Showing their work develops their interest as well as their careers throughout the world.'

This year it introduced a theme to which designers had to adhere - Plug-in Hollywood - for the first time. Toy specialist Lo says it has worked. 'It was the first time we had a theme to the exhibition. We believe it adds a different outlet for the designers to express themselves, and brings a new element to the exhibition as a whole.'

Due to popular demand, 23 local designers who took part in the event will be taking an encore at the latest Hollywood exhibition, taking up 1,000 sq ft of the 'lifestyle concept' department store LCX's 80,000 sq ft floor space.

Event co-organisers Design Gallery Projects - a union of independent designers and the China Resources Advertising and Exhibition Company - and LCX are aiming to attract a broader audience for the fast-growing industry.

Designer and director of US-based Kid Robot, Tristan Eaton says what started as an underground movement for creative expression has become a global phenomenon. 'It's the new rock'n'roll,' says Eaton who is used to signing autographs for queues of fans at exhibitions. 'Designers are full-on celebrities these days.'

Having opened stores in New York and San Francisco, Kid Robot strives to satisfy the demand of an insatiable audience. 'The scene has just exploded back home and our stores are constantly packed. It's a very exciting time,' he says.

Inspired by hip-hop, Eaton's 'Dunny' toys feature custom designs from some of America's old-school graffiti artists. 'I feel it's very much coming full circle. We can now give back to the artists who originally inspired us to get into creative outlets in the first place.

'[Those artists] who were painting trains in 1978 can now use new vehicles to promote their work and it's great to be able to give them this chance and expose a new audience to their work.'

And, Eaton, who visited Hong Kong in April, says the industry owes much to the city. 'I've always wanted to come to Hong Kong because this is the place where it all started. Beyond the history of the city, if you can successfully launch a toy here, then you know you're doing something right.'

The Hong Kong designer toy market is not as large in volume as either the US or Japan, though undeniably, in terms of innovation and originality the edge still remains here - and a day may come when local designers are following in Eaton's footsteps opening their own megastores.