Last Updated on January 13, 2026 by Jason Andrew
Two years ago, a man by the name of Wang Ning had the idea for a new kind of plush toy.
Bang. Labubus.
As a 48% shareholder in Pop Mart, that decision minted Wang a neat $15bn in equity value.
Labubus are the hottest toys in the world right now.
Pop Mart shares are up ~460% just in the last year alone and up over 10x in the last 2 years.
But how did this “Blind Box” retailer come to be? Who is the mastermind behind this new creation? And how long can the music last?
Will this be the next Pokémon Go?
Or a real, durable business? Let’s break it down.
Labubu Backstory
The original idea for Pop Mart was founded as a “variety” store by Chinese entrepreneur Wang Ning.
By 2014, the founder realised that their best-selling products were all toys, so he doubled down and turned the retailer into a toy store.
At the same time, Ning started to take note of Gashapon machines in Japan—toy dispensers which allowed customers to receive a “random toy.” These vending machines dispense mostly useless toys that people otherwise would be unwilling to pay for, but people would still pay $1–$2 to spin the machine.
Why? For the thrill of randomness. People love to gamble.
The model flips retail on its head. People aren’t buying a product; they are buying an experience.
Perhaps Pop Mart could offer a similar shopping experience with upmarket toys?
Molly Collection
But having “random unboxings” wouldn’t be enough.
Pop Mart would need their own universe of characters to keep people coming back again and again.
Originally, Pop Mart was a retailer of other brands that licensed intellectual property from other creators, paying significant licence fees.
But in 2016, they signed a deal with Penny Wong. Since 2006, Penny Wong had been hand-making a collection of “Molly” and had grown a loyal customer base. Pop Mart then purchased the intellectual property for its collection and started manufacturing the dolls at scale using injection moulding.
Having ownership is critical for operating margins, allowing Pop Mart to operate as a vertically integrated retailer and consumer IP company. Similar to the Labubus, each set contained 12-13 designs. However, you can’t buy all of them at once; you need to buy a “blind box.” There are 9 regular designs and 3 “secret” designs, which you are less likely to get.
This element of chance is what drives customers to keep coming back for box after box.
By 2019, over 70% of Pop Mart’s revenue came from blind boxes.
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Labubu Trend
But how did we go from a Chinese retailer to a global phenomenon?
That’s where Labubus come in.
Labubus were to Pop Mart what LeBron was to the Cavaliers.
They were okay without him, but they ain’t going to win championships.
In 2021-22, Pop Mart was struggling. Revenue growth had slumped to 2.8% from 2021 to 2022, and operating margins were slashed from 25% to 12.5% in the face of pandemic store closures, meaning lower foot traffic and waning interest in the Molly collection.
Pop Mart needed a big hit to turn things around.
Then the Labubu collection launched.
Steam started to pick up after BLACKPINK’s Lisa showed off a Labubu bag charm on social media in April 2024, sparking a viral trend among her 100+ million followers.
This caused a big spike in search volume (kudos to Brand Strategy Lab for the research) and was the start of Labubu’s journey into stardom.
Soon, other stars like Rihanna and even Kim Kardashian were spotted with Labubus. On TikTok, the hashtag #Labubu has been used in over 1.6 million posts, mostly enthusiastic “blind box” unboxing videos.
The “unboxing” novelty of Labubus is perfectly built for social media and helped to kick-start the viral loop, which catapulted the business to stardom.
This shows in Pop Mart’s numbers, TikTok Shop is forming an increasingly larger component of their business, accounting for ~18% of revenue in FY24, up from only 2.9% in FY23.
The Labubus themselves typically range from US$20 to US$30 in price, although they often trade on secondary markets like eBay and StockX for as much as $900. For many collectors, the possibility of bagging a “rare” Labubu, which will have significant resale value, is what keeps them coming back for more.
The toys come in a range of sizes, although the medium-sized plush dolls are most popular. You can purchase Labubus either in-store or online from Pop Mart’s official retail stores or RoboShops.
Financials
Pictured: Founder Jack Ning spotted in Macau after Labubus exploded
As Labubus started to take off, so too did Pop Mart sales. Growth went exponential.
Pop Mart’s share price is up over ~5.5x in the last twelve months and ~12x since December 2023.
Since the Labubu trend, gross margins are up 9% from ~61% to ~70%, revenue was up ~107% in FY24, and ~204% in H1 FY25 versus the first half of FY24. Wowzers.
Simultaneously, net profit margins have expanded from ~17% in FY23 to ~25% in FY24 and look set to crack 30% in FY25.
The revenue growth is understandable given the craze, but what’s more interesting is how dramatically store margins have lifted since the trend started.
Pricing power is a beautiful thing.
PopMart Recent Financial Highlights
From a risk perspective, Pop Mart is relatively well diversified across different lines of intellectual property, with the Labubu “Monsters” collection, or the entire collection encompassing Labubus, only accounting for 23% of revenue in 2024, albeit driving the majority of revenue growth.
The business has also been very intentional about exploiting the success of the Labubu collection to accelerate its international store rollout, adding new stores in India, the Philippines, Vietnam, Italy, and Spain.
These endeavours helped to grow Pop Mart’s international revenue from only ~17% in 2023 to 39% of total revenue in 2024.
Vending machines also make up an increasingly large proportion of Pop Mart’s retail revenue, with 2,300 “RoboShops” globally helping to distribute the products in places where it would be uneconomical to have a full store and accounting for ~15% of revenue.
Why do Labubus Work?
A more interesting question to ask is why Labubus work. What has driven the monumental success?
I think it comes down to a few factors.
The first is engineered scarcity. The toys are sold in “drops” that often sell out in a matter of minutes. The team at Pop Mart is good at producing volumes that are guaranteed to sell out and create FOMO, forcing new customers to wait for future drops.
The second is the rise of collectibles culture. Similar to Pokémon cards on eBay or sneakers on Grailed and StockX, there is a growing trend of niche communities finding long-term, enduring value in collectible items. The rise of social media and internet culture has likely spurred this, where toys that were previously locked away in somebody’s basement can now become digital status symbols on Instagram.
Several Labubus themselves find resale platforms, selling on secondary markets for hundreds of dollars, over 10x their original retail price.
The Labubu itself is a toy that spans generations. In the words of New York Magazine:
“Little kids love that they are both weird-looking and cuddly, and adults love that they get to feel like a kid while unboxing them.”
Pop Mart Bear Case
As much as the Labubu story is incredible, you cannot help but wonder about the longevity of their success.
What comes up must come down.
And just as Pokémon Go, Silly Bandz, and fidget spinners all had their day, you have to wonder how long the Labubu craze will last.
The retailer is currently trading on a software-like EV/LTM revenue multiple of ~13.9x (LTM revenue of US$3.3bn) and an EV/LTM EBIT multiple of ~36.0x (EBIT of US$1.24bn). Certainly, no cheap price for a brick-and-mortar business selling plastic toys.
What’s worse is when you look at the market cap and multiples of Pop Mart versus their peers. The business trades far richer than Hasbro (~$10.4bn USD, ~2.5x EV/revenue) and Mattel (~$5.5bn USD, ~1x revenue), businesses which are objectively very similar.
As the Labubu trend falls out of favour, growth will slow, and margins will likely return to more normal levels for the Pop Mart business. When they do, Pop Mart will need to turn to another collection to drive new growth.
What’s more, we’re already seeing a swathe of knock-off “Lafufus” replicas that will undercut the value of the real thing by saturating the market.
But if Pop Mart is smart, they will put their $1.6bn cash war chest to work by investing in new intellectual property and doubling down on new store rollouts. There is also likely quite a lot of juice left in the Labubu IP. Management is talking about expanding into theme parks, television series, and media to extract more value from the core IP, all of which will help extend its shelf life.
But who knows? In a world where algorithms can bring stardom to a trend overnight, they can just as quickly churn through old trends and move on to the next.
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