Walking the streets of China, you can see plush dolls with rabbit ears, large eyes, and sharp teeth attached to the bags of students in their teens and twenties. This is 'Labubu', a popular character from the Chinese toy brand Pop Mart (泡泡玛特). Labubu is gaining attention among Generation Z (born from the late 1990s to early 2010s) in China and around the world. Its popularity has surged, featuring frequently in the social media accounts of celebrities such as a Thai princess, K-pop group BLACKPINK, pop star Rihanna, and soccer player David Beckham.
Due to its global popularity, obtaining Labubu toys has become increasingly difficult, leading to cases of 'doll smuggling.' According to China Daily, recent security checks at Huanghua International Airport in Changsha, Hunan Province, resulted in the seizure of 318 toys, including Labubu dolls, from three travelers. At XinQiao International Airport in Hefei, Anhui Province, one traveler was caught trying to bring in 94 toys. Customs officials believe these individuals intended to resell the toys bought abroad at high prices in China.
Among the Labubu toys, the most popular item currently is a collaboration product with the fashion brand Vans, launched at 599 yuan (about 115,000 won) each, but due to the limited sale of 30,000 units, resale prices have soared to 14,839 yuan (about 2.85 million won).
In a shopping mall in London, England, a physical altercation broke out recently over the purchase of Labubu dolls. In response, Pop Mart has decided to halt sales in the UK, planning to withdraw the product from all stores in the country by June.
◇Starting in shopping mall stores… Character shops doing 'open run' in over 30 countries
According to Pop Mart, it was founded by Wang Ning in 2010 in a shopping mall in Beijing. It now operates over 500 stores in more than 30 countries. Initially, it operated as a specialty store displaying and selling toys from around the world. It still sells toys from global super IPs such as Disney, Marvel, Warner Bros., Harry Potter, and SpongeBob.
In 2016, Pop Mart shifted its main business direction to focus on proprietary IP products. It acquired the copyright of the character 'Molly', created by Hong Kong designer Kenny Wong in 2006, and began releasing various toy products, moving beyond just being a simple toy store to fully realizing its business using its own characters. Molly remains one of the most popular Pop Mart IPs in China.
The recently popular Labubu is a character created by Hong Kong designer Ka Sing Lung. Starting from an illustration concept of a monkey fairy living in a Nordic forest, it has been reborn into various dolls through a collaboration with Pop Mart.
◇Stimulating purchase desire with 'random boxes'… Sales performance and stock prices soaring
A key successful strategy of Pop Mart is the use of 'random boxes'. They create characters as various designed toys to stimulate the collectors' appetite and sell them in unexposed packaging to provide the fun of a 'random draw game'. IP fans repeatedly buy random boxes until they get their desired design or to complete their collection. Thanks to this strategy, now 85% of the total sales come from proprietary IP.
However, according to Bloomberg News, random boxes cannot be sold to children under eight years old in China due to concerns about addiction.
Riding on the popularity of Labubu, performance and stock prices are soaring. According to the securities firm Dongfang Caifu in China, Pop Mart's first quarter revenue increased by about 170% compared to the same period last year. Overseas sales skyrocketed by 480%, particularly showing steep growth of 900% in the U.S. and approximately 600% in Europe. Pop Mart's overseas market margin ratio is 64.9%, higher than 60.6% in China, contributing significantly to revenue profitability.
With consecutive strong performances, Pop Mart's stock price has soared, making it the 27th company on the Hong Kong Stock Exchange to reach a market capitalization of 300 billion Hong Kong dollars (about 52.8 trillion won). The stock price has increased sixfold over the past year.
In a recent report, JP Morgan noted, 'Labubu is rising as a super IP, surpassing Hello Kitty in search popularity in May,' and projected that Pop Mart's global revenue would grow by over 150% this year, with an annual growth rate of 42% expected by 2027. JP Morgan also estimated that the sales of the 'The Monsters' series, which includes Labubu, will increase from 3 billion yuan (about 575.5 billion won) last year to 14 billion yuan (about 2.7 trillion won) by 2025.