Pop Mart, the Beijing-based toymaker, has seen its Labubu character become a global phenomenon, but the craze has recently cooled, leading to significant market repercussions. According to Chief Operating Officer Si De, Pop Mart anticipated Labubu's popularity but did not expect its worldwide takeover. The company has experienced similar investor concerns regarding the longevity of its other characters, such as Molly and Twinkle Twinkle, over the years [1].
Despite Labubu powering Pop Mart's revenue and net income to surge by 185% and 309% respectively in 2025, the company's stock has retreated approximately 40% from its August peak. Following the earnings release on Wednesday, shares dropped over 22% as investors questioned whether Pop Mart could sustain its momentum beyond the initial hype [1]. CEO Wang Ning addressed these concerns during the earnings call, emphasizing that Pop Mart's portfolio extends beyond Labubu and likening the company's situation to a 'rookie racing driver suddenly thrown onto an F1 circuit' [1].
Si De highlighted the importance of continuous investment in intellectual property, referencing Disney's approach as a model for longevity. Pop Mart's strategy involves global expansion and building immersive worlds around its characters through films, theme parks, and fashion collaborations. These initiatives are intended as commercial bets to keep products like Labubu relevant in consumers' lives. Si expressed hope that Labubu could endure for decades, but acknowledged the long road ahead [1].
The development of Labubu was a result of years of effort, beginning with its launch in 2019 after licensing from artist Kasing Lung. The plush products that became popular underwent two years of design and prototyping. Pop Mart's disciplined approach includes scouting artists globally, with only a select few undergoing a rigorous incubation process before the company commits resources [1].
CONCLUSION
Pop Mart's Labubu-fueled growth has led to impressive financial results, but the cooling craze and sharp share decline reflect investor uncertainty about the company's ability to sustain momentum. Management is focused on global expansion and continuous investment in its intellectual property to drive long-term success. The market remains cautious, awaiting evidence that Pop Mart can replicate its past successes beyond Labubu.