In Depth: How Labubu Proved Pop Mart Right

A new collectible toy line featuring Labubu, an elf doll characterized by its large eyes and sharp-toothed smile, sold out almost instantly upon its launch on June 12, 2025. The popularity of Labubu, promoted by global celebrities such as Rihanna and Lisa from K-pop, ignited international bidding wars and led to chaotic scenes at stores. This success has propelled Pop Mart International Group Ltd., the toy's creator, into one of the most valuable intellectual property (IP) firms globally, overturning initial skepticism from investors and transforming the company’s fortunes[para. 1][para. 2].

Pop Mart's revenue soared between 165% and 170% year-on-year in Q1 2025, with overseas sales skyrocketing by up to 480%. During April and May 2025, the company recorded more than 100 million yuan ($13.9 million) in sales in each of North America, Europe, Australia, and Southeast Asia, indicating sustained international demand. This rapid growth was attributed to Pop Mart’s strategy of exclusive IPs, artificial scarcity, social media marketing, and the “blind box” phenomenon that appeals to consumers used to short-form entertainment. However, this explosive growth also introduced operational challenges, including supply shortages, counterfeit products, scalping, and potential regulatory risks due to hype-fueled overconsumption[para. 3][para. 4].

Pop Mart began in 2010 as a toy reseller and only discovered success in 2016 with its first proprietary IP, Molly. By 2017, the company was profitable, and its blockbuster IPO on the Hong Kong Exchange in 2020 saw its market cap exceed HK$100 billion ($12.7 billion). Although the share price experienced volatility and an extended slump until early 2024, it rebounded, peaking at HK$275 in June 2025. Initially, investors doubted its business model and feared the risks of over-reliance on a single IP amid intensifying market competition[para. 7][para. 8][para. 9][para. 10][para. 11][para. 12].

Labubu, created by Hong Kong artist Kasing Lung in 2015 and licensed exclusively by Pop Mart in 2019, represents a shift toward “image IP”—characters that attract consumers through their visual design rather than narrative content. This trend is increasingly influential, bypassing cultural barriers and leveraging social media’s global reach. As a result, image IPs like Labubu and Jellycat are surpassing content-based IPs in market penetration. Morgan Stanley projects Pop Mart’s sales will grow from $3.6 billion in 2025 to $6 billion in 2027, making it the fastest-growing global consumer brand[para. 13][para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20].

Pop Mart’s direct-to-consumer strategy, producing and selling original IP through their own channels, allows high profit margins—71.3% overseas and 63.9% domestically in 2024. By comparison, peers such as 52toys recorded a 40% margin. Pop Mart’s method enables agile product launches and supply adjustments, fostering continuous consumer engagement. The company is rapidly expanding with plans for 100 new overseas stores in 2025, over 150 in the U.S., and roughly 60 each in Europe and Southeast Asia by 2026[para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30].

Nevertheless, challenges abound: regulatory scrutiny over the “blind box” sales model, production bottlenecks, supply-demand mismatches, and surging counterfeits. Pop Mart has cooperated with authorities to curb counterfeiting and introduced presales to thwart scalpers, leading to a 60% price drop for Labubu on secondary markets. Industry competition is also intensifying as new entrants flood China’s booming IP-driven toy sector, which is projected to exceed 212 billion yuan by 2029. Despite its head start, Pop Mart must navigate evolving consumer tastes, regulatory landscapes, and aggressive competitors seeking their own success in the global collectibles market[para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39][para. 40].