In August this year, POP MART released its financial report, earning in half a year what it made in the entire previous year. Founder Wang Ning was ecstatic: initially hoping for 20 billion yuan, but now expecting 30 billion yuan to be easily achievable.
Capital markets love nothing more than proving people wrong. After the half-year report, POP MART's market cap surged to a historic high of 450 billion yuan, only to plummet shortly after. Over the next four months, its stock price dropped by 44%, wiping out 200 billion yuan in market value.
During this period, POP MART aggressively expanded production, largely resolving its supply shortages. However, the loss of "scarcity" became the core argument for bearish investors.
Deutsche Bank's December research report noted that POP MART relies on high transaction volumes to maintain store efficiency, but some overseas stores no longer have queues. Additionally, the company's increased production capacity could diminish Labubu's scarcity, making consumers lose interest and reducing store sales.
Another research firm, Bernstein, released two reports totaling nearly 130 pages, labeling POP MART as a "speculative IP," fundamentally different from evergreen IPs like Hello Kitty and Barbie. Once social media hype fades, demand will vanish.
In the stock market, falling prices are the ultimate sin. When prices rise, everything seems justified; when they fall, even sound logic is questioned.
At 450 billion yuan, POP MART was a new consumer myth; at 250 billion yuan, it became a burst bubble. From an emotional totem to worthless plastic toys—what went wrong with POP MART?
**The Non-Existent Assumption** Bernstein's report highlighted three issues with POP MART: 1. The popularity of its star IP, Labubu, is declining based on metrics from Xiaohongshu, Instagram, and search indices. 2. App downloads and online sales data suggest a downturn in POP MART's e-commerce performance. 3. Secondary market premiums on platforms like QianDao and eBay are also falling.
This reflects a common market view: POP MART's IPs rely on hype. Once the hype fades and production increases, the IPs will quickly lose relevance.
As Bernstein's analyst asked, "Can the company reduce its reliance on Labubu and grow through other IPs?"
Yet, POP MART's financials show that neither "dependence on Labubu" nor "IP irrelevance" is a real issue.
POP MART has multiple IPs, primarily THE MONSTERS, DIMOO, SKULLPANDA, Molly, and CRYBABY. Labubu, part of THE MONSTERS series, contributed 34.7% of revenue in the first half of the year.
In Q3, POP MART ramped up production starting June 18, leading to a 245%-250% YoY revenue growth. While Labubu's surge didn't crowd out other IPs, Bernstein's concerns about "IP irrelevance" remain unfounded.
Take Molly, POP MART's oldest IP. Sales grew from 40 million yuan in 2017 to 2 billion yuan in 2024, despite fading public interest. Similarly, other core IPs continue to grow steadily, proving that "hype" and "commercial value" aren't directly linked.
**Technical Adjustment** POP MART's volatility isn't new. After its 2020 IPO, its market cap soared to 130 billion yuan in two months before crashing to 12.8 billion yuan by September 2022—a 90% drop.
Back then, POP MART was a rare player in the trendy toy market, buoyed by post-pandemic consumer optimism. But as FOMO (fear of missing out) faded, investors began scrutinizing its flaws, such as over-reliance on Molly and imbalanced sales channels.
By 2025, Hong Kong's market narrative shifted to younger brands like Mixue Bingcheng and Lao Pu Gold outperforming established names. POP MART, a veteran in the market, doubled its stock price—only to see a sharp correction later.
**The Core Issue** Since its IPO, debates over POP MART's identity—whether it's an "IP operator" or a "retailer"—have persisted. Unlike retailers like Miniso, POP MART focuses on owning and exclusively licensing IPs to attract consumers.
Critics argue that POP MART's IPs lack "content," unlike Disney's story-driven franchises. Bernstein compared POP MART to Beanie Babies, whose bubble burst in 1999.
However, content isn't always key to an IP's longevity. Hello Kitty, with minimal content, has thrived for 50 years. Pokémon, despite simpler lore than Warhammer or Warcraft, dominates commercially due to its broad appeal.
POP MART's strategy is to continuously incubate new IPs with billion-yuan sales potential. After THE MONSTERS, SKULLPANDA and CRYBABY quickly hit that mark, with HIRONO or Star Man likely next.
The real issue? Many analysts refuse to believe consumers genuinely love these toys, instead attributing demand to hype, speculation, or resale motives.
**Epilogue** POP MART's controversies stem from generational shifts in consumer behavior. Younger buyers value design, aesthetics, and cultural significance, embracing products with intangible appeal.
This shift has turned POP MART into a battleground for conflicting consumer philosophies. Critics dismiss trendy toys as fleeting bubbles, yet overlook the emotional value they hold for fans.
Are POP MART's consumers being fooled? Perhaps. But dismissing plastic toys as worthless while praising traditional investments like Kweichow Moutai reflects a deeper generational divide.
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