Pop Mart Addresses Concerns Over Reliance on Labubu
Pop Mart International Group Ltd. has taken steps to address concerns that its overseas business is overly dependent on a single product, Labubu. The company argues that the explosive growth of Labubu last year has overshadowed the strong performance of its other toys.
According to the Chief Operating Officer, Si De, sales of non-Labubu items accounted for approximately 50% of total revenue in the US last year. This figure was revealed for the first time, offering insight into Pop Mart’s largest overseas market. In regions such as Japan, South Korea, and Southeast Asia, non-Labubu characters already make up the majority of sales, according to Si.
“There was an overemphasis on how important Labubu is last year,” said Si, who joined the company in 2015, just before it transitioned from a lifestyle retail chain to focusing on art toys. “Pop Mart’s other intellectual properties also achieved strong growth and gained a significant number of users and fans, but they were simply overshadowed by Labubu.”
An example of this is Twinkle Twinkle, a collection of star figurines and toys that is one of the company’s fastest-growing characters in Asia.
Labubu represents a rare instance of a Chinese product sparking a consumer frenzy in Western markets, with the toys selling out in seconds during its peak last year. However, shares have declined by almost half since hitting a record in August, resulting in a loss of roughly $28 billion in market capitalization. This decline reflects growing investor anxiety about whether the company can turn Labubu into an enduring hit or if it is merely a short-lived craze.
Signs of a Slowdown
Indications of a slowdown have been emerging following the blistering 185% surge in revenue in 2025, including a 300% increase in overseas markets. According to data from Second Measure, Pop Mart’s sales in the US, a key growth engine, dropped by 42% in April after a 45% decline in March. While total revenue may have increased by as much as 80% in the first quarter, the company has projected at least 20% growth for this year.
Pop Mart’s shares rose 5% on Wednesday, ending a four-day losing streak and contrasting with a decline in Hong Kong’s benchmark index.
Analysts’ Perspectives
Some analysts remain pessimistic. Morgan Stanley expects sales growth of 13% this year, while HSBC Holdings Plc forecasts a 9.6% expansion. Meanwhile, Deutsche Bank AG predicts a 2% decline, citing the vulnerability of Pop Mart’s business model to the Labubu craze ending.
“We believe there is just hype surrounding Labubu and it has already entered a sharp downcycle in overseas markets,” said Deutsche Bank consumer analyst Sammi Xu. “If Labubu’s popularity wanes and it ceases to be a traffic magnet, the loss won’t just be in one IP’s sales, but in the overall units per transaction and brand engagement, leading to a much steeper deterioration in total revenue.”
Despite these concerns, Pop Mart has at least one high-profile supporter. Influential Chinese investor Duan Yongping has increased his stake in the company to about 6.04%, likely making him the largest shareholder outside Pop Mart’s founder and management, according to Morgan Stanley.
Global Ambitions
While Pop Mart’s domestic business is proving robust, delivering 105% growth in the first quarter, the firm aims to become a global company. Si estimates that overseas employees will account for about 50% of Pop Mart’s total workforce in a few years, up from 20% to 30% currently. He predicts that the company can replicate its domestic success, which took a decade to build, in just a few years given its more complete product mix, stronger cash pool, and brand awareness.
The US remains central to this goal, despite recent slowdowns. Pop Mart has added more than a dozen stores there in the first five months of this year, according to News calculations based on company announcements, bringing its total to about 80. The company plans to have more than 100 in the US this year, including flagship stores at Times Square and Fifth Avenue in New York in the fourth quarter.
Expanding the Brand
While Pop Mart is looking to cultivate demand for characters like Skullpanda and Hirono to help diversify, billionaire CEO Wang Ning has described Labubu as a gold mine — highlighting the company’s focus on extracting more value from its viral hit.
The company is working with Sony Pictures Entertainment Inc. to create a Labubu movie, which Si says may be released as early as summer 2028. The monster characters will also appear at high-profile events this year, including the FIFA World Cup and the 100th Macy’s Thanksgiving Day Parade.
New Labubu releases are on the way as well. The company will launch a fresh series of the character and an artist collaboration in the second half.
“We are happy about the growth last year. We suffered, but we’re happy,” Si said. “Although things have somewhat reverted this year, it has given us stronger confidence. Once you’ve seen how big the opportunity is globally, it naturally drives greater conviction and a willingness to invest more resources.”
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