POP MART's trendy toy business is forging closer ties with the luxury sector. On December 10, POP MART announced that Wu Yue, President of LVMH Greater China, has joined its board as a new non-executive director. Wu Yue first joined LVMH in 1993 as the head of Dior Perfumes in China. After rejoining in 2005, she became President of LVMH Greater China, overseeing multiple luxury brands in the region. Her appointment signals POP MART's ambition to further explore the international fashion and trendsetting circles.
Despite comparisons to luxury brands like Hermès due to its gross margins nearing 70%, POP MART remains a relatively young company at just 15 years old. Compared to its earlier "hard-to-get" hype, POP MART products now see significantly lower premiums in the secondary market, with cooling demand.
Founder Wang Ning has expressed interest in how luxury brands like LV create "controlled scarcity." "I love art and business, but these two are contradictory—business seeks universality, while art pursues uniqueness. We’ve been searching for a balance," Wang said. Amid fluctuating market valuations, deeper ties with global luxury giants like LVMH may represent a new expression of this balance.
**A Win-Win Strategy** Scarcity is a shared pursuit in both the collectible toy and luxury industries. Luxury goods derive value not just from the product but from signaling status and taste. Exclusivity forms the basis of social stratification and identity. POP MART understands this well. Scarcity drives up prices and consumer desire, turning purchases into "conspicuous consumption." Whether through blind-box mystery items, limited-edition collaborations, or tightly controlled restocks, the goal is to create artificial scarcity. A stable collector community and active secondary market sustain interest and attract new buyers.
Yet absolute scarcity alone cannot sustain a business. Brands still need sufficient sales to operate and reach broader markets through products and marketing. Traditional luxury groups employ a tiered pyramid model: - Flagship products and haute couture serve top-tier clients, elevating brand prestige. - Leather goods target the affluent middle class, reinforcing identity. - Cosmetics, perfumes, and accessories act as "entry-level" products to attract younger consumers.
POP MART has experimented with this logic, launching high-end MEGA collectibles and partnering with luxury brands like Moncler, BALMAIN, and Lamborghini. In H1 2025, the MEGA series generated nearly ¥1 billion, accounting for 7% of revenue. But collectible toys remain inherently mass-market products. POP MART’s diverse IP portfolio thrives on emotional connections and self-expression, with core revenue still coming from ¥100-range figurines and plush toys.
However, the global popularity of LABUBU has given POP MART leverage to expand. In October, LVMH’s leather brand Moynat collaborated with LABUBU designer Long Jiasheng on a bag collection, with LVMH Chairman Bernard Arnault personally attending the launch—a sign of its significance.
This partnership also reflects challenges facing the luxury sector. Bain & Company reports the global luxury market is slowing for the first time since 2009, with stagnation in the U.S. and China—the latter marking six consecutive quarters of decline. Meanwhile, consumers increasingly seek individuality and emotional engagement, pushing brands toward more socially driven products.
Wu Yue’s appointment suggests POP MART and LVMH may move beyond marketing into deeper strategic collaboration. Industry analysts see potential for mutual benefit: - LVMH gains access to LABUBU’s youthful fanbase and insights into trends. - POP MART can learn from luxury brand management to elevate its value, broaden its audience, and refine its brand-building and lifecycle strategies.
**Long-Term Challenges** POP MART’s stock fluctuations closely track its IP lifecycles. Concerns loom that if LABUBU peaks in 2026 without a new hit, growth and valuations could suffer. This year, POP MART has aggressively expanded overseas using LABUBU’s appeal, opening 70 net new stores in H1 (25% larger on average) and targeting 200 stores annually.
LABUBU’s success has spurred cross-IP sales, with backup IPs like CRYBABY and Starry People showing promise. CRYBABY is POP MART’s fastest IP to hit ¥1 billion in sales, while Starry People achieved ¥390 million in six months post-launch in 2024. Yet replicating LABUBU’s global success won’t be easy.
**Market Pressures** Balancing IP value, scarcity, and scalable revenue is POP MART’s long-term challenge—but markets want quick results. Since August, its stock has plunged 45% from its peak of HK$339.8, erasing over HK$200 billion in market cap. Even minor setbacks—like resale price drops or licensing issues—can trigger sharp corrections.
Secondary market declines have particularly hurt sentiment. LABUBU’s "Heart Code 4.0" series, with its once-hot "Love" figurine, now sells for ¥270 (vs. ¥380 two months ago). Overseas, previously scarce LABUBU and Crybaby items are now readily available on POP MART’s site and Amazon.
Bearish reports add to the pressure. Deutsche Bank warns of an "Availability Paradox," where LABUBU’s shift from scarce collectible to mass product may signal waning appeal. Bernstein highlights risks like slowing growth, IP concentration, and resale price drops, predicting LABUBU sales could peak in 2026–2027, earlier than expected. Another report notes POP MART’s consumer base has shallow engagement and low loyalty, driven by novelty rather than a sustainable collector community.
Wang Ning often emphasizes "respecting time and operations," but external volatility has proven sharper than anticipated. Production surged from 300,000 units/month in early 2024 to 10 million, with plush output hitting 30 million/month by August—a pace "far beyond normal corporate experience."
**Building for the Future** POP MART is investing in long-term IP development. It registered the script for *LABUBU & Friends* Season 1 in March, and Sony Pictures has acquired film rights, with early-stage preparations underway. A second phase of its Beijing theme park aims to deepen user engagement through immersive experiences.
IPs need soul—clear worldviews and values—but this takes time. For now, POP MART must navigate uncharted territory.
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