Pop Mart faces declining demand for Labubu plush toys after a year of viral hype

Executive summary: After a year of viral hype, sales of Labubu plush toys have begun to plateau, prompting Pop Mart to look for ways to reignite interest and broaden its character lineup. The slowdown signals a potential saturation of trend‑driven toy sales and puts pressure on Pop Mart to transition from hype‑based growth to sustainable portfolio diversification.

Who is involved: Pop Mart, its licensing partners, retailers, and consumers in China and global markets.

Likely next: Pop Mart is likely to launch new characters, pursue brand collaborations, and adjust pricing or distribution strategies to regain momentum.

After a year of viral hype, sales of Labubu plush toys have begun to plateau, prompting Pop Mart to seek new ways to reignite interest. The company plans to diversify its character portfolio and explore collaborations to sustain growth. This shift reflects a broader trend where short‑lived viral trends may no longer guarantee long‑term revenue.

What's next — scenarios

Cyclical Trend Correction (Base Case) (55%)

Reduced inventory turnover for Labubu line leads to margin compression in Q3/Q4.

Decline in secondary market resale premiums
Reduced social media engagement for Labubu hashtags

Successful Portfolio Pivot (Upside) (25%)

Diversified IP revenue offsets Labubu plateau, maintaining top-line growth targets.

High sell-through rates for new non-Labubu IP
Announced high-profile lifestyle/fashion collaborations

Hype Fatigue & Brand Dilution (Downside) (20%)

Shift toward mass-market diversification leads to brand erosion of the 'collectible' premium.

Aggressive discounting on core collections
Significant drop in repeat purchase frequency

What to watch

Monthly sales data for new character launches (Next 60 days)
Secondary market resale price trends on platforms like Xiaohongshu (Next 30 days)
Quarterly revenue breakdown by IP segment (Next 90 days)