Bloomberg recently interviewed Pop Mart COO Si De, who publicly refuted widespread concerns that the company's overseas business relies too heavily on the hit IP Labubu.
Si De stated that the Labubu craze last year attracted all market attention, overshadowing the growth of the brand's other IPs. The company disclosed detailed sales data for the first time: in the US, Pop Mart's largest overseas market, non-Labubu merchandise sales accounted for half of total revenue; in Japan, South Korea, and Southeast Asia, non-Labubu product sales also accounted for the majority. He mentioned that the Twinkle Twinkle series is one of the brand's fastest-growing IPs in Asia, and many of its own IPs have accumulated a stable fan base. Si De joined Pop Mart in 2015, when the company was transitioning from a lifestyle retailer to an art and trendy toy company, and a multi-IP strategy was already part of its established strategy.
Labubu is one of the few Chinese trendy toy products that successfully ignited the Western market. At its peak, new releases sold out in seconds, directly boosting Pop Mart's total revenue by 185% in 2025, with overseas revenue increasing by a staggering 300%. However, the hype cooled quickly. Since reaching an all-time high last August, the company's stock price has nearly halved, wiping out approximately $28 billion in market capitalization. Investors have begun to question whether Labubu is merely a short-lived trend and cannot sustain its popularity in the long term.
Growth pressure in core overseas markets is already evident. Bloomberg data shows that sales in the US market declined by 45% in March and continued to fall by 42% in April. Even with a maximum first-quarter revenue growth of 80%, Pop Mart has lowered its full-year guidance, expecting revenue growth of at least 20%. Major investment banks have diverged significantly: Morgan Stanley predicts 13% sales growth for the year, HSBC gives a 9.6% growth forecast, while Deutsche Bank is bearish, predicting a 2% decline in sales.
Deutsche Bank analyst Xu Simin stated that Labubu's current popularity is merely a hype, and its overseas appeal has rapidly declined. Once the IP's appeal fades, not only will product revenue decline, but the number of orders per transaction and brand user interaction will also decrease, leading to a more significant overall revenue drop.
The capital market is not entirely bearish. Morgan Stanley reports that investor Duan Yongping increased his stake in Pop Mart to 6.04%, becoming the largest shareholder after the founders and management. Driven by multiple factors, Pop Mart's Hong Kong-listed shares rose 5% in a single day, ending a four-day losing streak, while the broader Hong Kong stock market declined during the same period. Meanwhile, its domestic business performed steadily, with first-quarter revenue increasing by 105% year-on-year, providing support for overseas expansion.
Promoting globalization remains Pop Mart's long-term goal. In terms of channels, the company continues to expand its store network in the US market, adding over a dozen stores in the first five months of this year, bringing the total number of stores in the US to approximately 80. The company plans to open over 100 new stores in the US throughout the year, with two flagship stores opening in Times Square and Fifth Avenue in New York in the fourth quarter. Regarding personnel structure, overseas employees currently account for 20%-30%, and the company plans to increase this proportion to 50% within a few years, building a localized operations team. Management stated that relying on a mature product matrix, cash flow, and overseas brand recognition, they expect to replicate the development achievements of the past decade in China within a few years.
To mitigate the risk of relying on a single IP, Pop Mart is cultivating consumer demand for IPs such as Skullpanda and Hirono overseas. At the same time, they haven't abandoned the value mining of Labubu, which founder Wang Ning calls a gold mine. The company has partnered with Sony Pictures to develop a Labubu-themed movie, slated for release as early as summer 2028; the IP will also appear at major international events such as the World Cup and the 100th Messi Thanksgiving Day Parade. In the second half of the year, the brand will also launch a new Labubu series and artist-collaborated new products.
Regarding the slowdown in performance growth, Si De stated that they are satisfied with last year's growth results. The slower growth this year has actually strengthened their confidence in their global expansion strategy. Having clearly defined the global market potential, the company is willing to continue investing more resources in its overseas business.
Pop Mart is currently at a turning point. In the short term, its valuation is under pressure due to the waning popularity of Labubu and declining sales in the United States. Whether it can achieve balanced revenue generation from multiple IPs and continue to operate its hit IPs in the long term will depend on the verification of continuous operating data.
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