Every year, new trends emerge that captivate global audiences, generating both excitement and significant financial gains. While the longevity of these trends is often unpredictable, their impact can be profound.
A prime example this year is the meteoric rise of Labubu dolls, sold by Hong Kong-listed Pop Mart International Group Ltd (HKEX: 9992). These collectibles have captured the public imagination and driven the company’s share price to soar by more than 350% in 2024.
Labubu, the centerpiece of this craze, originates from a series of Nordic fairytales brought to life by artist Kasing Lung, a Hong Kong native who grew up in the Netherlands. It is part of a broader collection of characters known as The Monsters, created by Lung. Among these, Labubu has emerged as the fan favourite, propelling Pop Mart into the spotlight.
With such remarkable growth in both popularity and stock performance, what should we understand about Pop Mart’s business and the factors behind this phenomenon?
Read Also: Understanding Labubu Dolls, And Why They Are So Popular (And Expensive)
Pop Mart Listing In Hong Kong
Pop Mart debuted on the Hong Kong Stock Exchange in December 2020, pricing its IPO at the top of the indicated range between HK$31.50 and HK$38.50 per share. The listing marked a significant milestone for the company, which has since seen its business and share price flourish.
Founded by Chinese toy billionaire Wang Ning, who was just 33 years old at the time of the IPO, Pop Mart has carved out a unique niche in the collectibles market. The company is best known for collaborating with various artists to create its signature “blind box” collectibles.
Blind boxes, highly popular among younger consumers, add an element of surprise and excitement. Buyers cannot see which figurine they are purchasing until the box is opened, creating a sense of anticipation and encouraging repeat purchases to complete collections.
The Monsters = Core Revenue Growth Driver
In the first half of 2024, Pop Mart reported revenue of RMB 4.56 billion (US$628 million), marking an impressive 62% year-on-year growth compared to the same period in 2023. This explosive growth was fueled significantly by the success of its Monsters collection, particularly the iconic Labubu.
The Monsters collection alone generated RMB 627 million in revenue during H1 2024, reflecting a staggering 292% year-on-year growth. This meant the series accounted for approximately 14% of Pop Mart’s overall revenue during the period—a testament to its immense popularity.
Labubu’s appeal received a major boost when Lisa, a global icon and member of K-Pop sensation Blackpink, was spotted with the dolls in April 2024. Following her endorsement, the collectibles’ popularity skyrocketed, sparking a frenzy among fans and collectors alike. This surge in demand has increased sales and led to some controversial incidents, including counterfeit production and theft. In Singapore, three boys were caught tilting a claw machine to steal five Labubu dolls worth over S$300.
With its unique appeal and celebrity endorsements, Labubu continues to play a pivotal role in Pop Mart’s success story.
Beyond Labubu: Molly and Pop Mart’s Diverse Revenue Streams
While Labubu and The Monsters series have captured widespread attention, they are not Pop Mart’s biggest revenue driver. In the first half of 2024, the Molly collectibles contributed approximately RMB 782 million to Pop Mart’s revenue, surpassing Labubu’s earnings and accounting for just over 17% of the company’s overall revenue.
The Molly series, a long-time favourite among collectors, is a collaboration with Hong Kong-based artist Kenny Wong. Its consistent popularity has made it one of Pop Mart’s flagship products and a critical pillar of its success.
Pop Mart’s business is further bolstered by its in-house Intellectual Property (IP) studio, the Pop Design Center, which delivered exceptional results in H1 2024. By combining its proprietary IP with the work of collaborating artists, the company has developed a multi-faceted portfolio that appeals to a broad and loyal fan base.
This strategic approach—offering a mix of original and collaborative creations—has enabled Pop Mart to diversify its revenue streams and sustain its position as a leader in the collectibles market.
Pop Mart’s Global Expansion and Share Price Surge
Pop Mart continues to expand its footprint both in its home market of Mainland China and internationally. In the first half of 2024, the company added 20 new stores in Mainland China, bringing its total to 374 stores as of 30 June 2024.
Outside of Mainland China, Pop Mart’s presence in Hong Kong, Macau, Taiwan, and other international markets grew to 92 stores. Notable openings in 2024 included a store in Century City, Los Angeles, in February, a castle-themed store in Vietnam in May, and a new location on the iconic Oxford Street in London, UK.
By combining a curated in-store shopping experience with a robust online strategy and temporary pop-up stores, Pop Mart has successfully captured the imagination of consumers seeking the next big trend. This approach has fueled its tremendous success, reflected in its share price, which has surged 363% year-to-date in 2024, trading around HK$92.
As the year ends, the ongoing Labubu craze remains a key driver of Pop Mart’s appeal. Both investors and collectors will be watching closely to see how much further the company’s popularity—and revenue—can grow in the second half of 2024, with Labubu still wildly sought after in December.
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