Mattel's Barbie Under Pressure as Pop Mart's Labubu Toy Brand Set to Reach $4 Billion by End of 2025.

Mattel's Barbie and Hot Wheels face stiff competition from Pop Mart's Labubu, which is on track to become a $4 billion business by year-end, thanks to a 396% surge in net profit and 204% increase in revenue. The doll's popularity soared during the pandemic, with celebrities like Rihanna and David Beckham showcasing it on social media. Mattel's Barbie sales declined in Q2 and the company slashed its guidance, while the US toy industry struggles with increased tariffs on Chinese imports.

Pop Mart, a Chinese toy manufacturer, has seen unprecedented growth with its Labubu franchise, which is on track to become a $4 billion business by the end of 2025. The company's financial report for the first half of 2025 reveals a 396% surge in net profit and a 204% increase in revenue, primarily driven by the success of its Labubu line [2].

The Labubu toys, inspired by Nordic folklore elves and designed by Kasing Lung, gained popularity in 2015 through an illustrated book series titled "The Monsters." The dolls' popularity skyrocketed in China post the COVID-19 pandemic in 2022, further boosted by celebrities like Rihanna, David Beckham, and Blackpink's Lisa showcasing them on social media [2].

The soaring popularity of Labubu has made it Pop Mart's most successful franchise, contributing to nearly 35% of the company's total revenues. The Monsters series generated over 4.81 billion RMB ($670 million) in revenues for Pop Mart in the first six months of 2025, a 668% increase compared to the same period last year [1].

Another significant factor driving Labubu's success is the company's product line of vinyl-plush keychains. These keychains, which combine the softness of plush toys and the sculptural details of facial features, have become viral accessories among celebrities and social media users. The keychains have sold out everywhere, with revenues from plush products growing over 1200% overall this year to 6.13 billion RMB ($854 million), accounting for 44% of the company's total revenues [1].

Pop Mart's growth is not limited to China. The company has been expanding rapidly in the United States, with revenues in the Americas market rising more than 1100% to 2.26 billion RMB ($315 million) in the first half of 2025. The number of physical Pop Mart stores in the Americas has almost doubled to 41, making it the company's fastest-growing region. By June 2025, over 40% of Pop Mart's revenue came from outside China [1].

The success of Labubu is particularly notable in light of the challenges faced by other toy companies. Mattel, a key competitor of Pop Mart, experienced a decline in Barbie sales in Q2 and slashed its guidance. The U.S. toy industry has been grappling with challenges due to increased tariffs on Chinese imports, leading to an unprecedented surge in toy prices in the U.S. [2].

Pop Mart's viral blind boxes and addictive appeal have tapped into the sweet spot of emotional spending at a time of geopolitical and economic uncertainty, contributing to China's rise in soft power rankings [3]. The company's success is part of a deliberate strategy that has captured consumers' hearts globally.

References:
[1] https://www.wired.com/story/labubu-pop-mart-earnings-2025/
[2] https://www.benzinga.com/news/gaming/25/08/47228085/mattels-barbie-under-strain-as-pop-marts-labubu-charts-path-to-billion-dollar-toy-empire-by-2025-end
[3] https://www.cnbc.com/2025/08/18/labubus-boost-chinas-soft-power-as-its-brands-find-global-appeal-.html