Pop Mart: The Rise and Fall of the Labubu Supply Chain

Last year, Pop Mart ascended to become one of the highest valued toy manufacturers globally, propelled by the feverish demand for its 'little monsters', otherwise known as Labubu.

The interest in these dolls spanned the globe, fuelled by high-profile celebrity endorsements and relentless product visibility across TikTok. However, the company now appears to have lost its initial momentum, grappling with a slowdown in sales and a significant drop in share value.

The Labubu boom

In a record-breaking 2025, Pop Mart’s valuation reached heights that dwarfed industry titans. By 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).

While the Labubu doll was conceived in 2015 and began its collaboration with Pop Mart in 2019, it did not achieve global phenomenon status until last year. The launch of Labubu 3.0 was so impactful it added US$1.6bn to the net worth of Pop Mart CEO and Founder, Wang Ning, in a single day.

Procurement and logistics teams faced unprecedented pressure as demand far outstripped supply. Retailers battled long queues and chaotic "frenzies" in-store, where physical altercations broke out and secondary market resale prices skyrocketed.

By the final quarter of 2025, however, the tide turned. Shares began to slide amid concerns over the long-term viability of the IP. As Pop Mart continued to invest in expansion, resale prices for the dolls began to plummet.

The durability of top IP’s popularity

In March 2026, the Beijing-based firm revealed its full year results. While the data showed significant annual revenue growth, the fourth-quarter performance has left investors wary.

The company reported an annual revenue of 37.1bn yuan (US$5.4 billion), a 185% increase from 2024, with net income quadrupling to 12.8bn yuan (US$1.85bn). Despite these figures, the late-year slowdown has triggered a sell-off.

"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."

The Monsters, the IP family containing Labubu, accounted for 38% of total annual revenue. This popularity provided a halo effect for other products like Skullpanda, which saw sales double, and Crybaby and Dimoo, which both tripled.

Yet, the second-half performance failed to meet the high expectations set by the earlier boom. Following the report, shares dropped more than 20% by midday.

“Even without Labubu last year you will find we obtained extremely fast growth,” explains Wang Ning, noting that the firm intends to diversify its portfolio.

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

Strategic shifts in marketing

To combat the downturn, Pop Mart is pivoting its strategy.

It was recently announced that Labubu will star in a feature film produced in collaboration with Sony Pictures. The project was unveiled during a global exhibition tour marking the toys' 10th anniversary.

Following the successful blueprints of the LEGO and Barbie cinematic ventures, the film represents a move away from the brand's traditional "blind box" sales model.

By shifting focus toward content-driven engagement, the company hopes to stabilise consumer interest and secure the future of the Labubu franchise.