How Pop Mart's Labubu became a monster of a business

Business Times

20-06-2025

LABUBU is a little doll in fleecy, bunny-eared onesies whose coffee-bean eyes hover above a serrated row of smiling teeth. Ostensibly an elf, the creature is either cute or creepy, depending on whom you ask. But one thing is clear – it has become a monster of a business.
The dolls have been caught on camera with celebrities such as Rihanna and K-pop superstar Lisa, typically dangling from the strap of a designer bag.
Their popularity has propelled the stock of its owner, trendy toy retailer Pop Mart International, more than 180 per cent higher this year. Pop Mart's market value of over HK$350 billion (S$57.4 billion) makes it the world's third most valuable intellectual property (IP) company, behind only The Walt Disney Company and Nintendo.
The toy reached a cultural milestone on June 10, when a Labubu figure was sold at an auction for more than 1.2 million yuan (S$214,960), including commission, setting a new record for the brand. The auction followed several successful sales of Labubu items, including one that fetched more than HK$200,000 at Sotheby's Hong Kong in late May.
Labubu has been crucial to Pop Mart's success, with the toy line it belongs to accounting for nearly a quarter of the company's total revenue last year. The toy has spawned bidding wars, unruly lines outside stores, and a minor controversy at a Chinese bank. Its rise serves as a case study in how to turn a character no one had heard of 10 years ago into the must-have toy of the year.
Pop Mart's strategy employed a shrewd mix of cultivating exclusive IP, creating scarcity, leveraging social media, and introducing a bit of gamble into the purchasing of its products.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The phenomenon shows China's growing potential to produce global money spinners from its cultural creations. Labubu's success echoes that of Black Myth: Wukong, the Chinese-made video game released in 2024 that became one of the fastest-selling titles of all time.
'The rise of China's trendy toy IP reflects the same trend as the global breakout of Chinese entertainment content in recent years. This phenomenon underscores China's growing national strength, particularly the rising competitiveness of its cultural industries,' said Fan Junhao, chief analyst for consumer discretionary at Huatai Securities.
The making of a monster
Labubu is the creation of Hong Kong artist Kasing Lung, who came up with the creatures in 2015 for his book series 'The Monsters'. Lung gave them a simple backstory. Labubu are forest-dwelling elves whose existence dates back millions of years, at least to the time of the dinosaurs. They number about 100 and are all female.
In 2019, the artist signed an agreement with Pop Mart, granting the company exclusive rights to produce and sell toy versions of the storybook sprites, launching Labubu under its 'The Monsters' series.
Much like there is more than one Labubu in Lung's story, there are a variety of Labubu toys on Pop Mart's shelves. The main difference is in the colouring, with different Labubu sporting a different colour of bunny-eared onesie, though the eyes, nose and teeth can also be colored differently.
A Labubu figure and Labubu stickers are seen at a Pop Mart shop in Beijing. A Beijing auction house sold a Labubu figure for over US$150,000, as global demand for the dolls reaches fever pitch. PHOTO: AFP
Some Labubu are rarer than others. One particularly sought-after version sports a charcoal grey onesie and a distinctive set of rainbow-colored teeth.
Pop Mart sells the Labubu in 'blind boxes', so that buyers don't know which one they are getting until they tear open the packaging. This drives sales as it leaves particularly fanatical Labubu fans with no other choice than to keep buying the toy until they get the Labubu in their preferred colour of onesie.
The toy was not an overnight hit. The dolls were originally made of hard vinyl, but sales started to pick up once Pop Mart started selling Labubu plush toys on key rings and as larger dolls in 2023.
The watershed moment came the following year, when Lisa, the Thai member of the K-pop girl group Blackpink, repeatedly showcased her collection of Labubu plushies on social media. A buying frenzy began across South-east Asia.
The impact was immediate. Pop Mart's revenue from 'The Monsters' series grew more than eightfold in 2024, making up 23.3 per cent of its total revenue, according to the company's financial report.
Its plushie sales, spearheaded by Labubu, skyrocketed 1,289 per cent. South-east Asia emerged as Pop Mart's largest international market, contributing nearly half of total overseas revenue, which surged 375 per cent to nearly 5.1 billion yuan.
Labubu's popularity is especially evident in Thailand. Outside Pop Mart's three-storey flagship store in Bangkok's bustling Siam Square, security guards watched over lines of customers on June 6. 'Around 500 tourists come each day just for Labubu, mostly Thais and Chinese', said a store employee.
The employee said that Labubu plushies were sold out at every brick-and-mortar Pop Mart in the country.
The unmet demand has created a grey market of unauthorized Labubu dealers. Just 50 meters from the official store, a tiny, unnamed shop stocks nearly every kind of Labubu – some priced at more than twice the official retail price.
At the shop, one Chinese customer dropped more than 9,000 baht (S$353) on Labubu in a matter of minutes. Another customer, a tourist in his 50s, said he had no choice but to pay scalper prices to secure a Labubu for his daughter. 'The official store had nothing left,' he said.
The Labubu fever has spread beyond South-east Asia. After pop superstar Rihanna was spotted with a pink Labubu hanging from her designer bag at an Los Angeles airport in February, the US and the UK got caught up in the frenzy.
The release of the third-generation Labubu plushies two months later led to viral reports of overnight lines and fights breaking out among desperate customers outside Pop Mart stores.
The toy's popularity has even impacted the Chinese banking industry, of all places. Caixin learned that several branches of Ping An Bank had to suspend a promotion that offered free Labubu toys as rewards for opening new accounts following discussions that the giveaway might be a violation of banking rules.
Financial institutions in southeastern China have recently received regulatory reminders about the ban on attracting deposits with gifts, sources told Caixin. However, it remains unclear whether these warnings were related to the Labubu promotions.
The game plan
Pop Mart follows a three-part business model employed by many Chinese toy retailers, which blends premium IP with gamified retail and social media dissemination, the analyst Fan said.
Under the model, companies either create original IP or acquire and manage existing properties, ensuring their products meet premium quality standards, Fan said. With strong IP as the cornerstone, they then turn buying their products into a kind of game.
The randomness of the blind boxes sparks online discussions and a desire among customers to keep buying so they can collect an entire series of products. This also generates a secondary market driven by scarcity and rising value of the products among collectors.
The third component is social media amplification, Fan said, explaining that companies leverage celebrity endorsements and encourage user-generated content such as memes to create a trend with mass-market appeal.
An auctioneer congratulates the buyer who won the bid for a Labubu figurine, during an auction by Yongle International Auction in Beijing on June 10. PHOTO: REUTERS
'Lisa played a significant role in propelling Labubu into the mainstream,' said a designer specialising in trendy toy IP. 'Celebrity endorsements remain the most effective breakthrough strategy – a tried-and-tested approach drawn from the luxury sector.'
In addition, unlike hard vinyl figures, the plush versions of Labubu possess a more inherent 'social' quality, and added straps make it easier for celebrities to wear and display them, the designer said, noting that, like Pop Mart, many toy companies are now developing their own 'fuzzy' collectible lines to leverage celebrity influence and drive sales.
While Chinese brands have only recently perfected this approach, it has a long track record of success for global toy brands such as Kaws, Bearbrick and Jellycat, said Fan, who emphasised the model allows customers to be more than mere buyers, but content creators as well.
Toy companies ought to evolve beyond being simple manufacturers or distributors, Fan said. Rather, they should become IP operating platforms, or even content creation companies.
Chen Chufang, a former IP specialist for a toy company, believes that for an IP to become popular globally, it needs more than celebrity endorsements. It's just as important to have high-profile retail stores abroad.
'Opening a standout collectible toy store overseas makes a far bigger impact than doing so in China,' he said.
By the end of 2024, Pop Mart had opened 130 stores overseas, locating most of them in prominent spots like Oxford Street in London and the Louvre in Paris, making it the first Chinese toy brand to enter the iconic museum.
'Previously, overseas IP derivatives were expensive. But now, Chinese companies are reaching overseas customers with relatively reasonable pricing and the novelty of blind boxes, while putting stores in core local commercial districts. They are becoming disruptors,' Chen said. CAIXIN GLOBAL