LABUBU cools down, Bubble Mart cuts in half

Zebra Consumption Chen Biting

Overall Q3 revenue fell 45%-50% year-on-year.

On October 27, Pop Mart, the leader in trendy entertainment, handed over a rare report card with a sharp drop in revenue in a single quarter. A year ago, this number increased by 245% to 250%.

In just one year, he went from the peak to being cut in half.

This drastic change is related to LABUBU. In 2025, LABUBU exploded in popularity, and in the third quarter of that year, global popularity reached its peak, making it “hard to find”. LABUBU blind boxes, originally priced at 99 yuan, can sell for hundreds of dollars in seconds on second-hand platforms, with hidden models priced in the thousands, and some co-branded models even reaching five figures.

The mood of speculation further boosts market enthusiasm.

Nowadays, the market is gradually returning to normal, LABUBU is cooling down rapidly, and it is inevitable that Bubble Mart’s revenue will drop significantly.

This also provides a warning to Bubble Mart. How can the company continue to maintain stable operations without the stimulation of popular IP?

LABUBU cools down

THE MONSTERS, with LABUBU as the core character, began as a picture book created by artist Long Jiasheng in 2015. In 2019, Bubble Mart developed it into a trendy toy and launched it on the market in the form of a blind box.

In fact, in the first few years, although THE MONSTERS was quite popular among players, it was far from becoming the number one IP under Bubble Mart. SKULLPANDA, MOLLY and DIMOO are the main sources of revenue for the company. In 2022, THE MONSTERS also experienced a downward trend in revenue.

The turning point will occur in 2024. This year, Bubble Mart’s operating income increased by 106.9% year-on-year, quickly exceeding 10 billion, reaching 13.038 billion yuan, and THE MONSTERS became the biggest contributor to the company’s journey to 10 billion. That year, the IP achieved revenue of 3.041 billion yuan, a year-on-year increase of 726.6%, and its revenue contribution reached 23.3%, surpassing MOLLY to become the company’s largest IP.

In the same year, Bubble Mart had 13 IPs with revenue exceeding 100 million yuan. MOLLY, SKULLPANDA, and CRYBABY also performed very well, all exceeding 1 billion yuan, respectively 2.093 billion yuan, 1.308 billion yuan, and 1.165 billion yuan.

With the market popularity in 2024, THE MONSTERS will promote Bubble Mart to continue to explode in 2025, interpreting a “trendy myth”. Throughout the year, the company’s revenue increased by 184.7% year-on-year to 37.12 billion yuan; net profit attributable to the parent company increased by 308.76% to 12.78 billion yuan.

The creator of this myth is LABUBU, which sells hundreds of millions of products a year. For the whole year of 2025, THE MONSTERS with LABUBU as its core achieved revenue of 14.16 billion yuan, an increase of 365.7%, accounting for 38.1% of total revenue. The revenue from one IP exceeds the overall revenue of the entire company in the previous year.

Since this year, LABUBU has cooled down significantly, which is directly reflected in the company’s financial report. In the first half of the year, THE MONSTERS achieved revenue of 4.454 billion yuan, a year-on-year decrease of 7.5%, and its revenue share dropped to 26%. This is also the first time LABUBU has experienced a decline in revenue since it became a super IP.

During the same period, multiple billion-level IPs such as Xingxingren, CRYBABY, DIMOO, and SKULLPANDA continued to maintain steady growth, supporting Bubble Mart’s current revenue to maintain a growth rate of 23.76%.

The newly disclosed Q3 business status has completely poured cold water on the market. Revenue is expected to fall by 45%-50% year-on-year, with revenue in China falling by 25%-30% year-on-year, Asia-Pacific falling by 65%-70% year-on-year, Americas falling by 70%-75% year-on-year, and Europe and other regions falling by 50%-55% year-on-year.

This overall decline greatly exceeded the expectations of institutions such as Goldman Sachs. This may also be one of the important reasons why Bubble Mart’s stock price has fallen sharply since October.

disappearing increment

The data of Bubble Mart (09992.HK) in the third quarter is quite divergent and deserves disassembly and analysis.

During the current period, domestic offline revenue fell by 5% to 10%, which was moderate compared to the overall decline. Stores, robot stores and other channels mainly serve long-term players, which shows that Bubble Mart’s user base is still there.

Online is a completely different story, with domestic online revenue falling by 45% to 50%. What is online? It is a live broadcast to bring goods, it is an e-commerce promotion, and it is a rush to buy new products for the first time. This time last year, online was the main battlefield for LABUBU’s rush to buy, and it was the entry point for passers-by to place impulsive orders.

Overseas fluctuations are more pronounced. The Americas grew more than 12 times last year and fell by more than 70% this year; Asia-Pacific went from high growth to a decline of 65% to 70%; Europe went from a growth of more than 7 times to a decline of 50% to 55%.

Through analysis, it is not difficult to see that for Bubble Mart, the loss is not the core players, but the abnormal incremental demand stimulated by LABUBU last year.

Chaowan provides users with emotional value, which is a typical non-rigid need. Users are obviously divided into multiple levels.

The most stable ones are long-term collectors. They chase new products, buy hidden items, and visit stores, which support the resilience of Bubble Mart’s offline channels.

In the middle are the followers. Driven by the popularity of short videos and social platforms, they followed suit and placed orders. This part of the demand is highly dependent on traffic and concentrated online. The 300% growth rate of Bubble Mart online last year largely came from this group of people.

The biggest fluctuation is in speculative demand. Scalpers hoard goods, speculate on second-hand goods, and ultimately realize premium arbitrage. LABUBU’s popular models have been sold for several times their original price, and hidden models have even been sold for thousands of dollars. The high premium in the second-hand market in turn creates a sense of scarcity, further stimulating the rush to buy new products, forming a self-reinforcing cycle.

Now, the cycle is broken.

In June this year, Bubble Mart launched LABUBU’s new “Retro Barber Shop” series. Many regular models were out of date, and even had “hair breakage” half an hour after they went online. This is very different from the previous rush to buy the LABUBU series and increase the market price after the launch.

When the product no longer carries a premium, scalpers quickly leave the market, and speculative demand is directly cleared. Users who followed the trend also waned. The content of LABUBU in short videos no longer flooded the screen, and the rush to buy in the live broadcast room dropped significantly.

The logic is the same for overseas markets. The overseas explosion of Bubble Mart last year was not due to overseas users forming stable consumption habits, but the viral spread on TikTok and the short-term traffic stimulation brought by celebrities bringing goods.

When the popularity subsides, without continuous content output and lack of localized operations, orders will naturally shrink rapidly.

distance of second curve

It’s not that Bubble Mart didn’t see the problem.

Starting from the first half of this year, the company has been adjusting. Slow down the pace of stocking, optimize global inventory, reduce dependence on a single IP, and promote a balanced layout of multiple IPs.

These actions can be seen in the financial reports. Bubble Mart does have 17 IPs with revenue exceeding RMB 100 million, and six IPs with annual revenue exceeding RMB 2 billion. But apart from THE MONSTERS, there is no other IP that reflects the ability to break through the global circle. SKULLPANDA, CRYBABY, MOLLY, DIMOO, etc. all have stable user groups, but their size and influence cannot support the next tens of billions of growth curves.

When is the next LABUBU coming? No one knows. The birth of a hit item itself is a small probability event, something that can only happen by chance. In order to pursue long-term growth, Bubble Mart chose to bet on film and television and amusement parks.

Management mentioned in the third-quarter conference call that it is advancing movie projects and theme parks. We want to break away from the cycle constraints of blind box single products and extend IP from trendy toys to content and offline space.

This is a mature path that Disney has taken, but it has been paved for decades.

Film and television projects require large investments and long cycles, and both box office and reputation are uncertain. The theme park model is more complex. From site selection, construction to mature operation, it is usually difficult to see returns in three to five years.

And Bubble Mart’s new projects such as film and television and amusement parks must be based on the IP built by Chaowan.

Chaowan’s purchase drivers are highly bound to emotions, social interaction, and a sense of scarcity. User loyalty is based on IP popularity. Once the popularity subsides, demand will dissipate.

Many of Bubble Mart’s IPs have become popular in the past, and each round of hits will bring a wave of performance peaks, followed by a natural decline. The same is true for LABUBU, but because the growth is too fast, the coverage is too wide, and the degree of concentration is too high, the impact of the fall is also particularly violent.