Labubu Economy Faces Challenge from Pop Mart Competitors

Labubu, a Chinese company behind the popular "Dolls" collectible toys, is facing competition from other Chinese companies looking to replicate its success. Bloomberg Opinion columnist Shuli Ren suggests that Labubu must hold on to its market lead by adapting to changing consumer tastes and maintaining its unique brand identity.

Labubu, the quirky elf-like collectible toy manufactured by Pop Mart International Group Ltd., has become a global sensation. Since its inception, the toy has captured the hearts of consumers worldwide, with celebrities such as Rihanna and Dua Lipa endorsing the product. However, as the toy's popularity continues to grow, so does the competition from other Chinese companies seeking to replicate its success.

Pop Mart's Labubu dolls have experienced remarkable growth, with the company's revenue doubling to 13 billion yuan ($1.8 billion) in 2024 [1]. The company's gross margin stands at an enviable 67%, indicating a high level of profitability [1]. Despite this success, Pop Mart faces significant challenges from competitors such as Miniso Group Holding Ltd. and QuantaSing Group Ltd. [1].

Miniso Group Holding Ltd. has introduced Wakuku, a chubby character with a mischievous grin, which is being sold in blind boxes, a marketing strategy that Pop Mart initially popularized [1]. Although Wakuku is not directly undercutting Labubu on pricing, it is tapping into a similar market segment, potentially stealing market share from Pop Mart. QuantaSing Group Ltd., which owns the intellectual property rights to Wakuku through an acquisition deal in March, has seen its stock price surge by 365% this year [1].

Additionally, the market for counterfeit Labubu dolls, known as Lafufu, is thriving. These cheap knockoffs, while not directly competing with the original dolls, have gained a cultural moment of their own, accentuating the aesthetic of the original Labubu dolls [1]. While these counterfeits may not directly impact sales, they could potentially dilute the brand's image.

Pop Mart's biggest challenge, however, comes from its fragile relationship with resellers. The company must maintain a balance between fostering a broad fan base and ensuring that its dolls do not primarily end up in the hands of scalpers. This delicate balance is crucial for the sustainability of the Labubu brand. For example, during the last day of China's month-long shopping festival, Pop Mart launched its first online presale of third-generation Labubu plush toys, which was a significant success but also led to a crash in the second-hand market [1].

According to industry experts, the key to Pop Mart's continued success lies in understanding and adapting to changing consumer tastes. As the market becomes increasingly competitive, Pop Mart must maintain its unique brand identity and continue to innovate to stay ahead of the competition. The company's ability to do so will determine whether Labubu remains a cultural phenomenon or simply fades into obscurity.

References:
[1] https://www.bloomberg.com/opinion/articles/2025-06-25/labubu-s-biggest-threat-is-not-wakuku-or-lafufu
[2] https://gulfnews.com/world/asia/how-labubu-collectible-toys-made-pop-mart-ceo-wang-ning-a-227-billion-dollar-billionaire-at-age-38-1.500173223