$9992.HK: Pop Mart - The Labubu Bubble Is Bursting
Ticker: $9992.HK Sector: Consumer Cyclical - Collectibles
Company Description: Pop Mart International Group is a Chinese designer toy company that built a global empire around collectible "blind box" figurines. Founded in 2010 and based in Beijing, Pop Mart became synonymous with the viral Labubu character—a quirky, monster-like doll created by artist Kasing Lung. The company operates 570 retail stores, 1,870 roboshops, and sells through major online platforms. With a market cap of approximately $380 billion HKD, Pop Mart's meteoric rise was driven by the global Labubu phenomenon.
However, beneath recent luxury collaborations and meme-driven publicity lies a troubling reality: the Labubu craze is ending, and alternative data reveals declining consumer interest that Wall Street hasn't fully recognized.
The Information Arbitrage Thesis
The Declining Trend: From Viral Sensation to Fading Fad
The Labubu phenomenon, which reached peak cultural relevance in July 2025, is showing clear signs of exhaustion across multiple data channels. What began as an organic viral sensation has devolved into desperate attempts to maintain relevance through increasingly gimmicky collaborations and promotional stunts. The trend's decline follows the classic trajectory of collectible crazes: initial scarcity-driven mania, mainstream adoption, market saturation, and inevitable consumer fatigue.
Our proprietary signals reveals a clear and declining interest across multiple digital channels.
Alternative Data Analysis
Search Intelligence Decline:
Google Trends: 43 decrease in search volume for "Labubu" over the past 2 months.
Social Media Momentum Decline:
TikTok Engagement: #Labubu hashtag views declined 11% from peak.
E-commerce and Resale Market Collapse:
Secondary Market Resale Values: Average Labubu resale prices have dropped 20% from peak values of $62 to current levels of $50
Secondary Total Units Sold: Labubu units sold dropped from 4841 at its peak to 1890 today
Digital Engagement Metrics:
Website Traffic: Pop Mart's global website traffic shows 70% decline in unique visitors over the last 3 months
Business Impact Analysis
The declining alternative data metrics directly translate to fundamental business risks for Pop Mart. Unlike diversified toy companies, Pop Mart's revenue concentration in Labubu-related products creates significant vulnerability to trend exhaustion. The company's business model relies heavily on artificial scarcity and FOMO-driven purchasing behavior. Significant risks for Pop Mart include:
Revenue Concentration Risk: Labubu and related character merchandise likely represents 60%+ of Pop Mart's total revenue, creating massive exposure to a single trend's decline.
Margin Compression: As resale values collapse and counterfeit alternatives flood the market, Pop Mart will face pressure to reduce prices or increase promotional activity, directly impacting gross margins.
Inventory Risk: The company's blind box model requires significant inventory investment. Declining demand could result in substantial write-downs and working capital challenges.
Search interest: Significant Month over month decline in August and September
Financial & Strategic Context
Recent Performance Warning Signs: Recent headlines tell the story Wall Street is slowly beginning to recognize: "Pop Mart's stock market crashes amid demand concerns," "Is the Labubu Craze Fading? Maker Pop Mart's Stock Tumbles," and "Bye-Bye Labubu? The rise and fall of the wide-eyed doll collectible." These aren't isolated concerns—they represent growing institutional recognition that the Labubu phenomenon may be ending.
Market Reaction: Pop Mart shares have already begun declining, with reports of major investors offloading positions and concerns about "demand concerns and profit-taking."
Management Response: The company's pivot to "mini Labubus" and mobile phone accessories suggests management recognizes the core product's declining appeal and is attempting to extend the lifecycle through product variations—a classic sign of a maturing trend.
Competitive Pressure: Miniso's launch of "Wakuku" dolls to directly compete with Labubu indicates the market opportunity is attracting competitors, further fragmenting demand and reducing Pop Mart's pricing power.
Investment Thesis
Pop Mart represents a compelling short opportunity based on the convergence of declining alternative data metrics and fundamental business vulnerabilities. The company's extreme dependence on a single character trend creates asymmetric downside risk as consumer interest wanes.
The Arbitrage Opportunity:
Wall Street Lag: Traditional financial metrics haven't yet reflected the alternative data decline, creating a window for informed investors
Trend Exhaustion: Classic collectible cycle suggests Labubu has reached maturity and faces inevitable decline
Structural Vulnerabilities: Revenue concentration, inventory risk, and margin pressure create multiple downside catalysts
Catalysts for Decline:
Quarterly Results: Next earnings report likely to show first signs of demand weakness
Inventory Levels: Management commentary on inventory management and promotional activity
Alternative Data Confirmation: Continued decline in search, social, and resale metrics
Competitive Launches: Success of competing products like Wakuku
Forward-Looking Assessment: Based on comprehensive alternative data analysis, Pop Mart appears positioned to significantly underperform market expectations as the Labubu trend exhaustion becomes apparent in financial results. The combination of declining consumer interest, market saturation, competitive pressure, and structural business vulnerabilities creates a compelling case for substantial downside.
Price Target Implications: Conservative scenarios suggest Pop Mart could face 30-50% downside as revenue growth stalls and margins compress. Bear case scenarios, assuming rapid trend collapse, point toward 60-80% declines as the market reprices the company from a high-growth collectibles phenomenon to a traditional toy manufacturer facing cyclical headwinds.
The current valuation assumes continued Labubu momentum that the alternative data clearly indicates is ending. For investors seeking to capitalize on information arbitrage opportunities, Pop Mart offers a clear catalyst path with asymmetric risk/reward favoring the short side.
The key risk to monitor is whether alternative data signals a reversal in consumer interest, while current trends point decisively negative, staying alert to any sustained rebound is critical.
This analysis is for informational purposes only and does not constitute financial, or investment advice. Readers should conduct their own research and consult with qualified professionals before making any investment decisions.