After Six Months of Global Sales Explosion, Is Pop Mart Facing an Emotional Turning Point?

Pop Mart (9992.HK) delivered a stellar performance in the first half of the year, with revenue projected to increase by no less than 200% and profit, excluding changes in the fair value of financial instruments, expected to rise by at least 350%. This suggests that revenue for the first half of 2025 will exceed RMB 13.7 billion, while net profit will surpass RMB 4.5 billion—both already higher than the full-year results of 2024. Product diversification, a growing share of overseas income, and economies of scale have significantly improved Pop Mart’s profitability. Institutions estimate an adjusted net profit margin of over 30%, marking a notable jump from 22% a year ago.

Despite the strong fundamentals, the market appears to have priced in high expectations. As a flagship stock in the new consumer sector, Pop Mart’s share price has climbed 1.8 times since the beginning of the year, setting multiple record highs. J.P. Morgan noted that although the company’s results exceeded consensus estimates by more than 50%, they merely approached the lower range of buy-side expectations (RMB 4.5–5.5 billion). Goldman Sachs echoed this, observing that the performance, while robust, was generally in line with already upward-revised expectations. Following the earnings preview, Pop Mart’s share price dropped more than 4%.

As with any trend-driven intellectual property (IP), LABUBU’s peak popularity may eventually subside. The longevity of market enthusiasm and the extent to which interest in Hong Kong-listed stocks could cool remains uncertain. At its current peak, Pop Mart faces the question of how to strategically chart its path forward.

A key factor supporting the company’s current momentum is the global popularity of LABUBU and its soft vinyl plush series. Since the launch of the LABUBU Soft Vinyl Plush 3.0 series in late April, long queues have been reported at retail locations worldwide. In the secondary market, the product has been trading at more than twice its RMB 99 retail price. The hype has extended to other LABUBU merchandise, with many offline stores experiencing sellouts. At a Yongle auction, a first-edition mint green LABUBU sold for over RMB 1 million.

In response, Pop Mart has taken steps to manage the surge. It suspended offline LABUBU sales in the UK, France, Japan, and South Korea, and issued a large-scale pre-sale order in mid-June, which led to a decline in secondary market prices. This strategy is seen as a way to prevent overexploitation of the IP due to limited supply and counterfeit proliferation. However, the supply constraints are not solely caused by scalpers; Pop Mart itself faces production bottlenecks.

The domestic supply chain for soft vinyl plush toys is already well-developed. Since early 2025, other brands—such as TOPTOY, Finding Unicorn, TNT, 52toys, and Letsvan—have all launched similar products under their IPs. This has fueled market skepticism that Pop Mart may be artificially creating scarcity. Founder Wang Ning has described a “70% supply” strategy, whereby the company initially meets only 70% of estimated market demand, then adjusts output based on feedback.

Pop Mart utilizes an OEM model, with core factories nearly exclusively dedicated to its production. Yet LABUBU’s popularity has repeatedly exceeded original capacity planning. At its April 2025 earnings meeting, Pop Mart revealed monthly production capacity surged from 300,000 units at the start of 2024 to 10 million units. The company acknowledged that this pace of growth “far exceeds the operational experience of a normal enterprise.” It further explained the recurring imbalance between demand and supply as a series of forecasting miscalculations, with the market consistently exceeding expectations.

To address this, Pop Mart is rapidly expanding its soft vinyl plush product lineup. In addition to LABUBU, the company has launched similar products for IPs such as SKULLPANDA, CRYBABY, and 星星人. Overconcentration of production resources on a single best-seller risks impeding the development of other IPs. Expanding the product line can reduce reliance on LABUBU’s scarcity appeal.
Nonetheless, Yang Aili, Chief Media Analyst at CSC Financial, believes the LABUBU soft vinyl plush line could become another enduring product series for Pop Mart, following “Molly’s Day” and the SKULLPANDA Temperature series. While most trendy toys see popularity cycles of about six months, the latter two have remained top sellers for over 30 months. Based on this, Yang sees long-tail potential for LABUBU 3.0 once production scales up.

Amid LABUBU’s massive popularity, Pop Mart must navigate the trade-off between maintaining IP value, scarcity, and revenue growth. Wang Ning emphasized the scalability of IP and its integration across various industries, stating that the company’s true value lies in the IP industrial chain. This requires continuous IP development, precise operation, and strategic monetization.
In 2024, Pop Mart categorized its business into four segments—figurines, plush, MEGA, and derivatives—for the first time, indicating broader ambitions for product line expansion. IP monetization includes both licensing and merchandise sales. Companies like Sanrio focus primarily on licensing, which, as an asset-light model, allows fast rollout and broader market exposure while concentrating internal efforts on IP operations.

Pop Mart has prioritized shaping IP narratives through collaborations with luxury brands such as Moncler, BALMAIN, and Lamborghini, as well as fashion labels like CLOT and VANS. As its business scales, Pop Mart’s top-tier IPs have begun entering mass-market consumer scenes via licensing deals. Examples include CRYBABY with Coconut Water, with Lay’s potato chips, and Molly and DIMOO with Chow Tai Seng’s gold beads.

Despite this, Pop Mart remains cautious in its licensing approach. In 2024, revenue from licensing totaled RMB 567 million, with its contribution to total revenue dropping from 6.8% in the same period in 2023 to 4.5%. According to Liu Wenzheng of Huaxi Securities, monetization methods are closely tied to fan demographics, IP attributes, and life stages. In the short term, Pop Mart’s control over design and its direct sales model support brand identity and scarcity, helping to build lasting brand equity.

While safeguarding the value of its IP assets, the company also seeks to capture long-term profit by controlling key, high-margin segments. In 2025, Pop Mart has advanced its focus on non-standard, highly customized, and premium-priced product innovations. In February, it opened a flagship store for the emotional IP “Hirono小野,” featuring home and lifestyle products, and expanding its apparel offering to include jackets, sweaters, and padded coats. Four months later, it opened two POPOP stores in Beijing and Shanghai to sell silver jewelry priced between RMB 500 and 1300. Reports have also surfaced about talent recruitment in the home appliance sector.

Pop Mart continues to invest in content-related initiatives. Upcoming projects include an animated LABUBU series and the expansion of offline theme parks, further developing the IP universe and narrative depth. These efforts underscore a long-term strategy aimed at strengthening IP competitiveness rather than quick monetization. While the “post-LABUBU” era has yet to arrive, Pop Mart has already begun laying its foundation.