Estimated reading time: 6 minutes
Key Takeaways
- Labubu demand has cooled, pushing Pop Mart’s share price down despite its inclusion in the Hang Seng Index.
- Secondary-market prices on platforms such as StockX have normalised, signalling waning collector urgency.
- Management is pivoting toward fashion collaborations to diversify revenue streams.
- Social-media algorithms now favour longer content, diluting the impact of quick unboxing clips.
- Investor focus turns to whether new intellectual-property lines can reignite growth.
Table of Contents
Pop Mart’s Meteoric Rise
From a modest stall in Beijing’s Da Wang Lu district, Pop Mart expanded into flagship stores, vending machines and a slick mobile app. Management leaned on the psychology of scarcity, transforming 6-centimetre vinyl figures into a global cultural moment.
“Blind boxes turned every purchase into a mini lottery,” notes designer-toy analyst Chen Rui. “That emotional jolt built a habit faster than any coupon ever could.”
Labubu, launched in 2019, became the poster child. By 2022 it generated a double-digit share of revenue, helped by feverish trading on secondary markets.
Signs of Cooling Demand
TikTok clips tagged #Labubu now average 38,000 interactions, down from 112,000 a year earlier. On Xianyu, China’s top resale app, trading volumes have fallen roughly one-third versus 2023 highs.
- Resale mark-ups have shrunk to single digits.
- Collectors cap orders at one or two boxes instead of entire cases.
- Ultra-rare variants still sell out, but common figures linger on shelves.
Market Reaction to Hang Seng Entry
Pop Mart’s early-September addition to the Hang Seng Index triggered an initial 0.98 % pop before the stock slid 18 % over two weeks. Passive-fund inflows arrived as predicted, but discretionary investors sold on fears Labubu’s flame was fading.
Intraday charts reveal heavy selling each time social-media chatter dipped, underscoring how tightly equity sentiment is chained to one franchise.
Secondary Market Shift
Where the 2021 Secret Pirate Labubu once fetched £1,240, the average August 2025 price on StockX was £420. Discord trading rooms that once buzzed with hundreds of listings now see mere dozens.
“Scarcity only works until everyone owns the characters they crave,” remarks collector Liu Yan. “After that, the rush fades.”
Strategic Pivot Toward Fashion
Pop Mart is repositioning Labubu as a graphic brand. Capsule runs with Uniqlo sold out online within hours, while pricier Coach leather bags moved slowly.
- Lifestyle goods could reach one-fifth of Labubu revenue by 2026.
- Higher licensing margins offset softer figure sales.
- Critics warn of brand dilution if apparel saturation sets in.
Marketing Challenges
Early TikTok success relied on fast, flashy unboxings. Algorithms now reward longer, narrative-driven clips, making 30-second surprise reveals less potent.
One winning tactic: live illustrator sessions streamed on Bilibili, where audiences watched artists reinvent Labubu in real time. Viewers felt like participants, not consumers.
Financial Outlook
Refinitiv consensus now pegs 2025 revenue growth at 4 %, down from 17 % once forecast. Gross-margin estimates have been clipped by 190 bps as promotion costs rise.
Yet Pop Mart sits on roughly £420 million net cash, giving it room to fund gaming tie-ins, animation and more fashion capsules.
“Sentiment will swing with every new character drop,” says broker Li Wei. “But cash buys time to reinvent.”
FAQs
Is Labubu demand permanently broken?
Not necessarily. Demand has normalised rather than vanished, but reigniting viral momentum will require new storytelling formats and perhaps fresh character lines.
How does Hang Seng Index inclusion affect Pop Mart long term?
Index membership attracts passive capital, yet it also increases scrutiny. Poor quarterly data can now trigger larger, faster outflows as benchmarked funds rebalance.
Will fashion collaborations replace blind-box revenue?
Fashion tie-ups offer higher margins but may lack volume. Management targets 20 % of Labubu sales from lifestyle goods by 2026, suggesting collectibles will remain core.
What risks should investors watch?
Key risks include slower-than-expected new IP launches, algorithm changes that dampen organic reach, and potential brand fatigue if collaborations feel excessive.
Could another character replicate Labubu’s success?
History says lightning rarely strikes twice, but Pop Mart’s deep design bench provides optionality. A broader portfolio, rather than a single mega-hit, may prove more sustainable.
