Pop Mart Shares Fall as the Labubu Bubble Bursts

Last year, Pop Mart became one of the highest valued toy manufacturers in the world, driven by the craze surrounding its 'little monsters' – also known as Labubu.

The interest in these dolls was global, driven by celebrity endorsement and product visibility across TikTok.

Now, however, the company appears to have lost all momentum, facing a slow down of sales and a sharp drop in shares. 

The Labubu bubble

Last year, Pop Mart broke records, becoming one of the highest manufacturers in the world. In June, it was valued at US$44.43bn, which was more than the combined creators of Transformers (Hasbro at US$9.45bn), Hello Kitty (Sanrio at US$11.2bn) and Barbie (Mattel at US$6.08bn).

Though the Labubu doll was first created in 2015 and started collaboration with Pop Mart in 2019, it was not until 2025 that the doll became a global phenomenon. The 2025 launch of Labubu 3.0 added US$1.6bn to the net worth of Pop Mart CEO and Founder, Wang Ning, in one day. 

The demand was more than anyone could have anticipated, with retailers battling long lines and retail frenzies. Moreover, fights broke out in stores and reselling costs skyrocketed. 

Despite this, by the final quarter of 2025, shares in Pop Mart began to fall, with concerns as to whether the dolls would remain a popular mainstream toy, or if they would fade into a memory. Resale prices began to drop, even as the company began to invest in further expansions. 

In March 2026, the company revealed its full year results. 

Falling in favour

Although the results revealed a significant growth in company revenue throughout the year, investors are turning their back on the company. The Beijing-based toy maker celebrated an annual revenue of 37.1bn yuan (US$5.4 billion) for 2025 – a 185% increase from 2024 – and net income more than quadrupled to 12.8bn yuan (US$1.85bn), Pop Mart's fourth quarter slow-down has seen investors jumping ship.

"A material slowdown in the fourth quarter [has amplified] investors’ concern on the durability of top IP’s popularity,” explains Jeff Zhang, equity analyst at Morningstar.

"A ​pullback in dividend payout ratio to 25% in 2025 from 35% in 2024 is another negative to ​us. Pop Mart has also doubled down on the licensing business and theme park operations, but we think execution risks remain high."

Labubu became the company's primary toy, becoming popular around the world. This popularity helped boost that of Pop Mart's other products, including Skullpanda (sales more than doubled to 3.54bn yuan, or US$512m), and Crybaby and Dimoo both tripled in sales across the last year.

Despite this, Labubu's were the main success of the company. The Monsters – the IP family for the dolls – contributed a 38% share of the total annual revenue.

Despite this, its second half failed to meet expectations, following the sharp fourth-quarter slowdown. 

Following the release of the financial report, Pop Mart shares fell more than 20% by midday. 

“Even without Labubu last year you will find we obtained extremely fast growth,” explains Wang Ning, adding that the company is planning to continue investing in its other IPs. The company is seeking to diversify its portfolio and bring other characters to the forefront of marketing.

He continues: "We won't pursue overly aggressive growth that boosts ​revenue at the expense of profitability."

A different type of marketing

Prior to the financial report, it was revealed that the Labubu dolls would star in their own film. Pop Mart is collaborating with Sony Pictures for the film, which was announced during a global exhibition tour for the toys' 10th year anniversary. 

Following in the footsteps of the LEGO Movie and the Barbie Movie, this film could maintain the toys' popularity amid consumer interests. 

Though the main appeal of the toys has been their blind box selling style, with customers not knowing which dolls they will get until they open the package, this film could be a brand new marketing technique to continue the love for Labubu.