Pop Mart's Global Expansion and Labubu Phenomenon: A Multi-Billion-Dollar Investment Opportunity in Chinese-Driven Consumer Culture

In the ever-evolving landscape of global consumer culture, few stories have captured the imagination—and wallets—of investors as effectively as Pop Mart International Group (9997.HK). The company's meteoric rise, fueled by the Labubu phenomenon and a relentless focus on IP monetization, has transformed it from a niche toy brand into a multi-billion-dollar powerhouse. But as the company accelerates its global expansion, the critical question for investors remains: Is this growth sustainable?

The Labubu Effect: A Cultural Catalyst for Growth

At the heart of Pop Mart's success lies Labubu, the pointy-eared, sharp-toothed plush toy that has become a global pop culture icon. In 2024, Labubu generated RMB 3.041 billion in revenue, a 726.6% year-over-year surge, and contributed 25% of the company's total revenue. By 2025, its influence has only deepened. The Americas, now Pop Mart's second-largest market, saw a 1,000% revenue spike in Q1 2025, driven by Labubu's viral appeal among Western consumers.

The blind-box model, which leverages scarcity and surprise to drive demand, has proven to be a masterstroke. With a gross margin of 68% for Labubu, far exceeding traditional toy margins of 20–30%, Pop Mart has created a high-margin engine for growth. The secondary market for rare Labubu figures further amplifies this model, with resales often fetching multiples of the original price.

Global IP Monetization: Beyond Labubu

While Labubu is the star, Pop Mart's broader IP portfolio—comprising 93 intellectual properties—ensures long-term sustainability. The company has strategically expanded into licensing and partnerships, collaborating with global giants like Disney, Universal, and Sanrio. For instance, a Disney princess collection reimagined in Pop Mart's signature style tapped into existing fanbases while introducing the brand's aesthetic to new audiences.

These partnerships are not just about co-branding; they are about emotional resonance. By aligning with established IPs, Pop Mart reduces cultural barriers in international markets. The result? A 440% surge in overseas revenue in H1 2025, with Asia-Pacific (excluding China) and the Americas leading the charge.

Moreover, Pop Mart has diversified into high-margin lifestyle products. Labubu-themed jewelry, priced between $50 and $380, has positioned the brand as a lifestyle platform rather than a toy company. This shift into fashion and accessories opens new revenue streams and strengthens brand equity.

Retail Scalability: Robo Shops and Strategic Store Expansion

Pop Mart's retail strategy is equally innovative. The company operates 2,597 automated “Robo Shops” across 18 countries, enabling low-cost, high-efficiency distribution. These kiosks, combined with 571 physical stores (including 40 new openings in H1 2025), create a hybrid retail network that balances accessibility with brand visibility.

The company's aggressive store expansion is no accident. By 2025, Pop Mart plans to open 100 new international stores, with a focus on the U.S. and emerging markets like the Middle East and Central Europe. The Louvre in Paris and Times Square in New York now host flagship stores, blending retail with cultural tourism. This strategy not only drives foot traffic but also reinforces Pop Mart's global brand identity.

Consumer Engagement: The Psychology of Collecting

Pop Mart's success hinges on its ability to tap into the psychology of collectibility. The blind-box model, combined with limited-edition releases and celebrity endorsements (e.g., Rihanna, David Beckham), creates a sense of urgency and exclusivity. Daily active users on Pop Mart's digital platform have surged 257% year-to-date in 2025, underscoring the brand's digital stickiness.

The company's omnichannel approach—integrating social media, e-commerce, and physical retail—ensures that consumer engagement remains high. TikTok and Instagram campaigns, often featuring unboxing videos and influencer collaborations, drive virality and sustain demand.

Risks and Opportunities

Despite its strengths, Pop Mart faces challenges. Overreliance on a single IP (Labubu) could lead to fatigue, though the company's 93-IP portfolio mitigates this risk. Regulatory scrutiny in China and shifting consumer preferences in Western markets are also potential headwinds.

However, the company's financials suggest resilience. A 70.3% gross margin in H1 2025, coupled with a 397% net income surge, highlights its profitability. With CEO Wang Ning targeting 30 billion yuan in 2025 revenue (up from 13.88 billion in H1), the company appears well-positioned to capitalize on its momentum.

Investment Thesis

For investors, Pop Mart represents a unique confluence of cultural trends, retail innovation, and financial discipline. Its global IP monetization strategy, scalable retail model, and consumer-centric engagement create a durable competitive advantage. While valuations remain elevated (25x EV/Revenue, 61.9x EV/EBITDA), the company's growth trajectory justifies the premium for those willing to bet on the next phase of the collectible toy boom.

Recommendation: Investors with a medium-term horizon should consider a position in Pop Mart, particularly as the company continues to expand into high-margin markets and diversify its IP portfolio. However, monitoring IP fatigue and regulatory risks is essential.

In conclusion, Pop Mart's global expansion and Labubu phenomenon are not just a passing trend but a testament to the power of IP-driven consumer culture. For those who recognize the potential of this multi-billion-dollar opportunity, the time to act may be now.