Shares of Pop Mart, the Chinese toy giant behind the popular Labubu doll, experienced significant movement after state media voiced concern over blind box sales. Although the company was not named directly, the critique struck at the heart of its core business model. The backlash highlights regulatory challenges for brands that rely on surprise-driven products while also underscoring the strength of emotional consumption trends driving Pop Mart’s growth.
Pop Mart is a major toy retailer based in China, best known for selling designer collectibles through blind boxes. The company was founded by Wang Ning in 2010 and has grown into a cultural phenomenon. It made its stock market debut on the Hong Kong Stock Exchange in 2020 and now commands a market valuation of $40 billion, far ahead of rivals like Sanrio, the owner of Hello Kitty.
The company’s recent success is largely attributed to the Labubu doll, a favourite among collectors and influencers. Pop Mart reported revenue of ¥13 billion (approximately $1.2 billion) in the previous year, with profit rising 204% to ¥3.3 billion ($460 million).
Blind boxes are a type of mystery packaging where customers purchase an item without knowing what is inside. These boxes contain a random collectible from a larger series, and buyers hope to find rare or exclusive figures. The thrill of discovery and limited availability make them highly desirable.
Pop Mart has built its entire retail model around blind boxes, leveraging the excitement of unboxing and the collectability of its in-house character lines.
On Friday, June 21, 2025, China’s state newspaper, People’s Daily, published an article criticising the blind box format. While it did not mention Pop Mart specifically, the message was clear. The piece raised concerns about addiction among young consumers and called for tighter controls.
This triggered a sharp 3.6% drop in Pop Mart’s share price on the same day. The toy company is already facing age-related restrictions on its products, as China banned blind box sales to children under 8 in 2023.
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Despite the initial dip, Pop Mart’s stock showed some recovery. By Monday, June 23, the share price had climbed back 2.17%. However, on a weekly basis, the stock remains more than 12% lower, reflecting broader investor concerns around regulatory pressures and long-term growth implications.
The Labubu doll is one of Pop Mart’s most beloved characters, originally designed by artist Kasing Lung. Featuring distinctive large eyes and quirky expressions, Labubu has become a symbol of modern collectible culture in Asia.
Labubu dolls are often launched in seasonal or limited-edition formats, enhancing their rarity and appeal. The doll has gained international recognition, endorsed by celebrities like Dua Lipa, Rihanna, and Lisa from Blackpink. It stands at the centre of Pop Mart’s success story and exemplifies the emotional connection many buyers feel toward their collections.
Emotional consumption refers to buying decisions driven by feelings, identity, or nostalgia rather than practical need. This behaviour is becoming increasingly common among younger Chinese consumers, who may cut back on necessities but are willing to spend on personal passions and hobbies.
Pop Mart has benefitted immensely from this cultural shift. Its characters, particularly Labubu, tap into a sense of community, self-expression, and artistic appreciation that resonates with millennials and Gen Z.
Pop Mart’s recent share price fluctuations reveal the delicate balance between regulatory oversight and consumer enthusiasm. While blind boxes face increasing scrutiny, the emotional appeal of Labubu dolls and similar collectibles continues to drive strong sales and brand loyalty. As the market evolves, it remains to be seen how companies like Pop Mart will adapt to safeguard their growth and public perception.
This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 23, 2025, 2:39 PM IST
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