Explosive Growth: Pop Mart's Labubu Dolls Propel Profits to New Heights

The Chinese toy company Pop Mart has reported a staggering increase in profits, attributable to its viral Labubu dolls. The brand’s success is heavily influenced by international sales, celebrity endorsements, and a booming resale market, despite controversies surrounding marketing tactics.

Pop Mart, the Beijing-based toy company renowned for its entertaining Labubu dolls, is anticipating an extraordinary profit increase of at least 350% in the first half of this year. This surge follows a significant tripling of revenues, indicating a remarkable trajectory for the firm, which boasts a market valuation exceeding $40 billion (£31.6 billion).

The rise in profitability stems from heightened global brand recognition and stringent cost controls. Labubu dolls, characterized as whimsical elf-like creatures with distinctive jagged teeth, have captivated collectors worldwide, leading to their rapid sellouts and extensive queues outside retail locations.

Notably, Pop Mart's strategy includes "blind box" sales—a marketing approach that keeps buyers in suspense about the contents—a tactic that's attracted criticism for potentially fostering compulsive buying behaviors. Since their launch in 2019, Labubu dolls have ushered Pop Mart into a leading retail position, with over 2,000 vending machines and retail outlets globally.

Shares of Pop Mart were first listed on the Hong Kong Stock Exchange in 2020, and since then, the company's valuation has skyrocketed by nearly 600% within a single year. Sales from international markets are noteworthy, constituting nearly 40% of total revenue in 2024. However, the demand has been so overwhelming that some retailers have paused sales of Labubu dolls temporarily.

The brand's traction in the U.S. has been further amplified by endorsement from celebrities such as Kim Kardashian and Lisa from the K-pop powerhouse Blackpink. In June, the sales of Labubu dolls in the U.S. soared by a staggering 5,000% compared to the same month last year, according to data from equity research firm M Science.

M Science analyst Vinci Zhang commented, "I've not seen anything like this from other toy companies," emphasizing the vast potential for growth in U.S. markets, where Pop Mart has a limited presence with just under 40 shops compared to approximately 400 in China.

The frenzied buying has created an active resale market, where original Labubu dolls priced around $10 can command hundreds of dollars. A human-sized Labubu doll recently fetched an astonishing $150,000 at an auction in Beijing.

The heightened interest in Labubu dolls also incited a surge in counterfeit products, known as Lafufu dolls. In June, Chinese authorities seized over 46,000 fake Labubu figures as part of an effort to combat the expanding black market for these beloved toys.