Will Pop Mart success will continue after the Labubu Craze
The "ugly cute" doll Labubu captivated audiences worldwide, transforming from an unlikely star into a phenomenon. The strange-looking creature, part of the Monsters family of figurines, propelled the Chinese toy giant Pop Mart to unimaginable heights, bringing in over $600 million US and making the company's founder China’s 10th richest person.
However, as with many trends, enthusiasm appears to be waning. Shortly after its international peak, Pop Mart’s share price declined following a lackluster assessment in September, erasing nearly a quarter of the company’s value. This volatility has prompted investors to question whether Pop Mart can shift from a fleeting blind box trend to a stable global brand.
The Power of the Blind Box and the Hunt for a Special Edition
At the heart of Pop Mart’s business model is the blind box. Customers buy a sealed container, shaking it for clues but never knowing exactly which figurine they'll receive. This mystery-based selling strategy is what pulled Pop Mart out of five consecutive years of losses following its founding in 2010. By 2018, the model had helped net profits surge to nearly 100 million yuan.
The blind box taps into a powerful psychological principle: variable ratio reinforcement, similar to the gambling mechanism behind slot machines. While slot machines offer uncertain rewards, a blind box guarantees a win—a toy—but the specific design is uncertain. This mechanic drives repeat purchases; according to Pop Mart’s prospectus, roughly 70% of toy consumers will make more than three purchases hunting for a specific design. The ultimate prize is the secret edition, which appears only once in every 144 blind boxes and can be resold on the secondary market for 20 to 30 times the original price.
Pop Mart's Superpower: Investing in IP
Despite the importance of the blind box, industry experts agree that Pop Mart's true "superpower" lies not in the box itself, but in its focus on Intellectual Property (IP).
Unlike traditional toy manufacturers, Pop Mart operates more like a talent scout, discovering and signing exclusive deals with trendy toy designers globally. This allows them to first create characters that resonate deeply with consumers. As one expert noted, "People first fall in love with the IPs, and then they're willing to buy the blind boxes."
Pop Mart discovered its first proprietary IP, Molly, in 2016. Today, the company operates over 90 intellectual properties, with more than 85% of its 2024 revenue coming from exclusive products developed with artists.
The Labubu Phenomenon
Labubu, created by Hong Kong-born artist Cassing Long, was initially a niche vinyl toy. The character’s transformation into a cultural phenomenon was fueled by two key changes in 2023: a shift to a cuddlier plushie format and the addition of a keychain attachment, turning the doll into a popular bag charm.
The frenzy reached a climax in early 2024 when Blackpink star Lisa showcased her collection, injecting the doll with instant global stardom. Within a year, overseas revenue soared fivefold in the first half of 2025. The craze led to fights among consumers waiting to buy in the UK, and in Beijing, a first-generation Labubu figurine sold for a staggering $150,000 US at auction. Prices on the resale market sometimes hit 45 times the original retail price, sparking the viral hashtag: buying Labubu is more profitable than buying gold. In the first half of 2025, the Labubu family alone generated 4.81 billion yuan, accounting for nearly 35% of Pop Mart's total revenue.
Cracks in the Blind Box Empire
The runaway success inevitably drew scrutiny. At the height of the frenzy, the People's Daily (the Communist Party mouthpiece) published a critical report citing legal experts who called blind boxes "business traps" using unpredictable rewards to encourage repeat purchases.
More significantly, secondary market prices began falling as Pop Mart scaled up production, and US corporate bank JP Morgan Chase downgraded the firm due to weak catalysts and an unattractive valuation. This volatility highlights the high-risk nature of the business; if the trend for an IP dies out quickly, all investments in it can be lost.
Analysts warn that the typical lifespan for popular trendy toys, according to Goldman Sachs, has historically been just 2 to 3 years. Pop Mart’s challenge is now to extend Labubu’s relevance beyond that typical lifecycle.
The Future: Popland and the Continuous Relay
To extend the life of its top-tier IP, Pop Mart is aggressively diversifying. This includes launching related merchandise like phone charms and creating experiential opportunities, such as Popland, a Beijing theme park where visitors can interact with life-size Labubu characters. The company is also developing an animated series and a film featuring Labubu.
While some experts remain optimistic, believing Labubu is merely transitioning to a "lifestyle brand" and could become the next Hello Kitty, Pop Mart is not placing all its bets on one character. The company operates a continuous relay race of new IPs, with figures like the teary-eyed Crybaby already in high demand. Collectors are also chasing other promising IPs like Twinkle, Twinkle, Herono, and Peach Riot.
In summary, Pop Mart’s future hinges on its ability to continually identify and grow the next big intellectual property. Its deep investment in IP curation and diversification strategies will be tested as trends cycle rapidly. The company must capitalize on its momentum and innovate to stay relevant, making its journey a high-stakes race to determine if it can sustain long-term success beyond the industry’s short-lived bubbles.
About the Writer
Jenny, the tech wiz behind Jenny's Online Blog, loves diving deep into the latest technology trends, uncovering hidden gems in the gaming world, and analyzing the newest movies. When she's not glued to her screen, you might find her tinkering with gadgets or obsessing over the latest sci-fi release.What do you think of this blog? Write down at the COMMENT section below.
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