Pop Mart’s shares plunged 20% after its biggest year ever. Is Labubu losing steam?

⁠Pop Mart’s 2025 revenue exploded 185%, but it didn’t stop its stock from plummeting

Walk around in public, and you’ll probably see someone clutching a furry, pointy-eared creature dangling from their bag.

There’s a high chance that it is a Labubu—and it’s the reason Chinese designer toy company Pop Mart has become one of the fastest-growing consumer brands in the world.

But Pop Mart’s best financial year on record didn’t stop its stock from dropping more than 20%. Here’s why that’s happened.

Pop Mart’s growth was genuinely staggering

Pop Mart’s full-year 2025 results were, by any conventional measure, extraordinary.

Revenue rose 184.7% year-on-year to RMB¥37.12 billion (S$7 billion), while adjusted net profit jumped 284.5% to RMB¥13.08 billion (S$2.46 billion). Gross margin hit 72.1%, slightly above analyst estimates of 71.6%.

The company’s top IP, The Monsters series, delivered RMB¥14.16 billion (S$2.66 billion) in revenue, up 365.7% year-on-year, making Labubu the first designer toy IP to surpass RMB¥10 billion (S$1.88 billion) in annual revenue. Plush toys became Pop Mart’s largest product category for the first time, with revenue surging 560.6% to RMB¥18.71 billion (S$3.52 billion).

Globally, Pop Mart is no longer a China story.

The Americas market skyrocketed 748.4% to RMB¥6.81 billion (S$1.28 billion), with a net addition of 42 stores, totalling 64. On the other hand, Europe hit RMB¥1.45 billion, up 506.3% from 2024.

By the end of 2025, Pop Mart operated 630 retail stores and 2,637 vending machines across 20 countries and regions.

So why did shares fall over 20%?

Yet, when Pop Mart released its annual results on Mar 25, its Hong Kong-listed shares dropped more than 20%—recording the steepest single-day fall in nearly a year. For a company that just reported triple-digit profit growth, that seems absurd. 

Here’s the simplest way to think about it: a stock price isn’t just a report card on the past. It’s a bet on the future. And when investors looked at Pop Mart’s results, they saw three things that made them nervous about what comes next.

Firstly, the business is too dependent on one character.

Almost 40% of Pop Mart’s entire revenue came from The Monsters series. That’s nearly double from 23% the year before and has remained the company’s “primary growth engine,” an extraordinary concentration for what is supposed to be a multi-IP business.

In other words, the more successful Labubus got, the more the whole company’s fate became tied to a single toy and the more fragile Pop Mart became. Investors don’t love that. 

Secondly, growth started slowing down towards the end of the year.

While the first half of 2025 was explosive, Morningstar equity analyst Jeff Zhang flagged a material slowdownin the final quarter, suggesting the Labubu frenzy may have already peaked.

Stocks like Pop Mart are priced on expectations, not just results. When investors are paying a premium because they believe growth will keep compounding, even one quarter of “less explosive than before” is enough to trigger a sell-off.

Thirdly, the management’s own targets weren’t exactly ambitious.

CEO Wang Ning said the company is targeting growth of “no less than 20%” in 2026, which sounds decent until you remember Pop Mart just grew at nearly 185%. Going from that to 20% is a drastic slowdown.

The dividend payout ratio also dropped from 35% to 25% in 2025, meaning shareholders are getting less back than before despite spectacular revenue growth the same year.

In short, the market and investors looked at those numbers and saw a peak, rather than a launchpad for greater growth.

Over-reliance on one IP

Pop Mart’s whole business is built on characters and intellectual property (IP).

It creates or licenses designer toy figures, packages them in “blind boxes”—sealed packaging where you don’t know which variant you’re getting until you open it—and sells them to collectors who keep buying, hoping to land the rare ones.

It works brilliantly when an IP goes viral. Labubu went viral in a way few consumer products ever do. Celebrities were spotted carrying it. Resellers were flipping it for multiples of retail. It became both a status symbol and a collector’s obsession at the same time.

The character was even invited to participate in the century-old Macy’s Thanksgiving Day Parade for the first time in 2025, further expanding the brand’s cultural reach.

The uncomfortable truth, though, is that Pop Mart didn’t really engineer that. Viral moments like Labubu happen, but they’re not a formula you can repeat on demand.

Pop Mart has six major IPs surpassing the RMB¥2 billion (S$380 million) revenue mark and 17 other IPs that each crossed RMB¥100 million (S$18.79 million) in revenue in 2025.

The next-largest—SKULLPANDA at RMB¥3.54 billion (S$670 million), CRYBABY at RMB¥2.93 billion (S$550 million) and MOLLY at RMB¥2.9 billion (S$545 million), while all are strong performers, bring in nearly five times less revenue than Labubu’s The Monsters series at RMB¥14.16 billion.

The gap between Labubu and other IPs is enormous—not the kind of thing you paper over with a few decent performers.

One analyst at Global X ETF highlighted the persistent debate, with “bulls focused on ongoing IP monetisation and overseas growth … [and] bears question durability and cycle risk. Earnings (in 2025) did little to close that gap,” he said. The 2025 results didn’t settle that debate either way.

CEO Wang Ning pushed back, saying Pop Mart is more than just Labubu—and compared the pressure on the company to a rookie racing driver being thrown straight into Formula One. That’s a fair point, but investors want to see the next driver, not just hear that one exists.

What happens when the hype has nowhere to go?

Pop Mart knows it has a gap to close compared to its rivals.

Its own executive director Si De has said the company is actively studying Disney—specifically how it has managed to keep Mickey Mouse commercially relevant for nearly 100 years. While that’s an admirable ambition, it also reveals exactly what Pop Mart currently isn’t.

Think about what it means to be a Marvel fan, or a Disney fan, or even a Hello Kitty fan. You can watch the films, stream the shows, read the comics, follow the lore—most of it for free, especially the older ones.

The merchandise comes later, as an extension of something you already love. The IP earns your loyalty first, and monetises it second.

Pop Mart works in reverse. Being a young brand that launched in 2010, the characters—Labubu, MOLLY, SKULLPANDA, DIMOO—are the product before they are anything else.

There is no show to watch, no storyline to follow, no free entry point into the universe. If you want to engage with Labubu, you have to buy a collectible. That’s a fundamentally different relationship between a fan and an IP, and a much more fragile one built on temporary blind-box dopamine hits.

Critics have long argued that Pop Mart’s characters lack the narrative depth of Western franchises like Disney or Sanrio. Pop Mart’s counter has always been that emotional resonance and aesthetic appeal are enough that you don’t need a backstory to feel something when you look at MOLLY’s blank expression or Labubu’s toothy grin.

And for a while, that argument held. Labubu didn’t need a movie to go viral, but Lisa from BLACKPINK to carry one on her bag.

The problem is staying power—Virality is a moment, but fandom is a relationship.

Disney has spent nearly 70 years building its IP empire around a single core principle: great content at the centre, everything else radiating out from it. That content—the films, the parks, the stories—is what keeps fans emotionally tethered even when they’re not actively buying.

What Pop Mart is doing about it

Pop Mart is now trying to build that infrastructure in reverse, and fast.

A Labubu film co-developed with Sony Pictures is currently in the scripting stage, which could extend the IP’s cultural life considerably. A FIFA World Cup collaboration featuring Labubus was also launched in Apr. Both are smart moves, but they’re both bets on Labubu, not on the wider roster.

Pop Mart is also branching out into home appliances, themed dessert stores, and is upgrading its 40,000 sqm physical theme park in Beijing.

Beyond its current IPs, it is also continuing to push for collaborations and new content. Sanrio, Japan’s character brands, partnered with Pop Mart on two crossover series in Mar, but one of which did not fail to feature Labubu.

Whether any of this produces the next cultural phenomenon—or whether Labubu was always lightning in a bottle—is the question the company can’t yet answer.

What it means for Singapore

Pop Mart’s Singapore presence is small relative to its global scale, but it matters for the same reasons it matters elsewhere: the city-state’s challenging retail scene is a regional testing ground and a legitimacy stamp for brands expanding across Southeast Asia.

A Pop Mart with a diversified IP portfolio is a very different operator from one riding a single character’s cultural moment.

If Labubu fatigue sets in faster than the company can develop its next breakout IP, the aggressive international expansion starts to look shakier—and the premium retail space Pop Mart holds in markets like Singapore becomes a liability, not a calling card.

For now, queues at Pop Mart stores remain, and the resale market is still active.

But investors have seen enough one-hit consumer brands to know how the story can go. Moreover, as of May 25, a simple Google search turned up results showing an outlet at Lot One, and temporary pop-ups at Bugis Junction and Suntec City marked as permanently closed.

Five other stores remain, with the Plaza Singapura outlet said to be under renovation. Vulcan Post has reached out to Pop Mart for confirmation.

But if these closures are real, are these quiet signs of Pop Mart’s shrinking footprint here? The 20% stock drop then begs a big question: what would Pop Mart look like without Labubu?

And Pop Mart needs to give a convincing answer if it wants to remain an international market player.

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