Chinese toy corporations Pop Mart are accelerating a "post Labubu" strategy by extending the popularity once concentrated on their marquee character "Labubu" to other characters. Observers say the corporations, which grew on Labubu's explosive popularity, are now being tested on whether they can move beyond reliance on a single character and establish themselves as a long-term intellectual property (IP) corporations.
According to Bloomberg on the 16th, even after the Labubu craze cooled once, Pop Mart's in-house characters have built fan bases and continue to steadily draw store visitors. As of the day, on Pop Mart's official site, in-house character products such as Twinkle Twinkle, Mega Space Molly, and Skullpanda ranked among this week's top sellers. Of the top 10 products by sales, five—half—were tallied as Pop Mart's own-brand products.
Their popularity is also evident in the resale market. On Chinese toy resale platform Xianyu, many Twinkle Twinkle-related products are being sold at prices higher than official retail. In particular, the popular series "Vacation Mode On" plush is being sold at a price 72% above list. In the U.S. market, Skullpanda's popularity stands out as well. According to Morgan Stanley, Skullpanda ranked No. 2 among Pop Mart IPs by U.S. sales.
The market says Pop Mart is building a long-term growth base by extending the collectible-toy boom sparked by Labubu to other characters. Of the 400 million toys Pop Mart sold last year, about one-fourth were from "The Monsters" series featuring Labubu. Industry analysis suggests Pop Mart is trying to leap into a content corporations capable of competing with global character corporations such as Disney and Sanrio.
In particular, Twinkle Twinkle, launched in the second half of 2024, is growing rapidly. In the first half of last year, the character posted sales of 390 million yuan (about 84.6 billion won) worldwide, showing the steepest growth among Pop Mart's in-house characters. Morgan Stanley estimated that by 2026, Twinkle Twinkle's sales in China will reach about half of Labubu's.
The revenue mix is also gradually diversifying. According to Huatai Securities, since the fourth quarter of last year, the shares of Crybaby and Twinkle Twinkle in Pop Mart's revenue have increased significantly. In TikTok shops in Thailand and Indonesia, which grew on Labubu's popularity, sales of the two characters also expanded rapidly. From mid-December last year for one month, Twinkle Twinkle accounted for 51% and Crybaby 28% of the top 20 products by sales.
Lydia Ling, an analyst at Citigroup, said, "Skullpanda, Twinkle Twinkle, and Crybaby are not simply characters that replace Labubu; they are emerging as new growth drivers, each with its own independent fan base."
Founder and Chief Executive Officer Wang Ning has emphasized a goal of building the company into a "designer toy IP platform." Over the past year, the company has greatly increased new character launches. It rolled out products combining various IPs, including Skullpanda and Twinkle Twinkle, and boosted online buzz by unveiling collaborations and limited editions with "My Little Pony," a character from toy corporations Hasbro.
Marketing is also being carried out aggressively. Last year, Twinkle Twinkle conducted large-scale promotions, including performances at a Beijing theme park, exhibitions in major cities, and a collaboration with bubble tea chain Heytea. Skullpanda likewise strengthened promotion by holding pop-up events and exhibitions in Shanghai and Guangzhou.
Behind this strategy is Pop Mart's revenue structure concentrated on Labubu. As the Labubu craze spread mainly on social media last year, Pop Mart posted an explosive growth rate of about 1,270% in the third quarter. However, as counterfeits spread and supply increased, price premiums weakened, and the U.S. market sales growth rate in February fell sharply to 40% year over year. Pop Mart's share price, listed in Hong Kong, also fell about 40% from its peak in August last year.
Sammy Xu, a consumer analyst at Deutsche Bank, said, "Labubu is a key factor elevating the Pop Mart brand," adding, "It accounts for more than half of overseas sales and exceeds 70% in some Western markets." Xu added, "Without Labubu, it would have been difficult for other characters to gain recognition and sales as quickly in overseas markets as they have."
Investors are watching how quickly new characters can reduce dependence on Labubu. Recently, Pop Mart launched new characters such as Melody and Key A, but they did not gain as much buzz as expected. That is why criticism is emerging on Chinese social media like Douyin that "the pace of character launches is too fast" and "the characters lack polish."
Still, with the company staking everything on securing its next growth engines, analysts say it will continue to roll out new characters for the time being. Zhang Jeff, an analyst at Morningstar, said, "For Pop Mart to grow into a global IP powerhouse, expanding a variety of characters and the licensing business is essential," adding, "The company will continue to expand new IP launches to reduce dependence on 'The Monsters' series."