Pop Mart, what kind of game are they really playing?

Source: CITIC Publishing House

The first stock in the collectible toy craze, Pop Mart, has fallen deep into the eye of a storm.

On March 30, after Pop Mart’s share price suffered consecutive two-day drops of more than 30%, the stock finally rebounded to a green close during the trading session. At the same time, an investment heavyweight who almost never “changed his mind” made a rare reversal of his earlier judgment—Duan Yongping posted on Xueqiu: “I’ve decided to withdraw the statement I made to Zhang Fangzi that I won’t invest in Pop Mart.”

This value-investing benchmark figure, who had previously said “I can’t make sense of Pop Mart,” nevertheless chose to reexamine the company when Pop Mart’s share price underwent a major correction.

Just a few days earlier, Pop Mart had delivered an “all-time strongest annual report” that every consumer brand would envy: full-year revenue of RMB 37.12 billion, up 184.7% year over year; and adjusted net profit of RMB 13.08 billion, up 284.5%. That LABUBU with rabbit ears and bared tusks—single-handedly—contributed RMB 14.16 billion, up 365.7%, marking the first time a collectible toy IP was pushed into the “billion-yuan club.”

However, the capital market’s reaction was beyond surprising.

On the day the financial report was released, the share price fell 22.51%; the next day it dropped more than 10% again. Over the two days combined, the cumulative decline exceeded 30%, and the market value evaporated by more than HKD 250 billion compared with its peak.

The market’s “voting” logic is simple and brutal: Pop Mart is far too dependent on LABUBU. And in 2026, it even only promised “not less than 20%” growth?

In the face of questions about “growth losing momentum,” Pop Mart founder Wang Ning threw out a classic analogy during the earnings call: “In 2025, we were like a beginner race car driver suddenly pulled onto an F1 track. In 2026, we hope to get into the pit stop, refuel, and换换轮胎.”

On one side, blowout performance was met with market “voting with its feet” as market value collapsed; on the other, a top investor’s stance reversed. What exactly has happened to Pop Mart behind the scenes?

Earnings “blow up,” but the stock is cut in half—what are investors afraid of?

First, let’s replay this bizarre “divergence.”

In 2025, Pop Mart not only surpassed RMB 30 billion in revenue, but its gross margin rose from 66.8% to 72.1%, and its net profit margin increased from 25.4% to 35.1%—a profit margin strong enough to rival that of premium liquor.

But market panic is also clearly evident, mainly in two areas.

First, the intensifying “LABUBU dependency.”

In 2024, the income share of the THE MONSTERS family where LABUBU sits was 23.3%. In 2025, that figure surged to 38.1%. Citibank’s research shows that 47% of respondents got to know Pop Mart for the first time because of LABUBU.

This means a large number of new users are “coming for LABUBU.” When capital sees a single mega hit capturing nearly four-tenths of revenue, while new IPs like Supertutu get lukewarm responses and even the second-hand prices are nearly cut in half, fear arises immediately.

Second, the “hard braking” of growth guidance.

During the earnings call, Wang Ning gave 2026 guidance: strive for a growth rate of “no less than 20%.” Compared with the triple-digit growth rates in the past, this seems like a “slowdown.”

One industry commentator bluntly said: earnings are something from the past, stock prices are about the future. Mega performance brought by a single mega hit is not enough to support the market’s imagination for 2026, and the probability of continuously hitting mega hits remains unknown.

It’s almost exactly like the doubts Pop Mart faced back when it went public relying on Molly.

Just when the market was engulfed in pessimism, Duan Yongping’s attitude reversal became a signal worth studying.

On March 30, Duan Yongping posted on Xueqiu: “Economics’ ‘speed’ is actually the ‘acceleration’ in physics. What you buy when investing is the total amount in the future—what you get is ‘speed’ times ‘time,’ which produces the total length. Of course, some ‘acceleration’ will run farther within the same unit of time. I spent these two days looking at Pop Mart again and decided to withdraw the statement I made to Zhang Fangzi that I won’t invest in Pop Mart.”

As early as last December, during his interview with Wang Shi, Duan Yongping had said: “I highly recognize the ability to turn emotion-value products into something like this. It’s not just arbitrary success, and it can’t be attributed to luck.” Although at the time he also said, “I can’t understand Pop Mart, so I won’t invest in or buy its stock,” he had already taken the company seriously.

In January of this year, when facing a question from netizens, Duan Yongping remained cautious: “I’ve roughly looked at Pop Mart and think they really are quite impressive. But I still can’t understand why people would need this thing—what if in two years everyone stops wanting it?” But he also added: “If you can believe people will keep needing it and the business will keep growing, then that is of course a pretty decent investment for you.”

From “I can’t make sense of it” to “withdrawing the statement,” Duan Yongping’s change can be seen as, to some extent, the ongoing evolution of his investment thinking. What prompted him to reexamine Pop Mart is precisely the company’s posture during the plunge in its share price: proactively slowing down and pursuing steady, sustainable growth.

Pop Mart: Its ambition goes beyond just a “blind box factory”

If you only look at the financial reports, you might think Pop Mart is a “mega-hit manufacturing machine.” But in reality, its ambitions go far beyond that.

In the book The Unique: The Journey of Pop Mart Founder Wang Ning from a Grocery Shop to the World of IP, written by well-known business journalist Li Xiang, Wang Ning repeatedly emphasized one view: Pop Mart is an IP operations company, not a blind-box company.

The book reveals a detail that was overlooked. Back in 2015–2016, when Pop Mart was still only an offline grocery shop, Wang Ning found that the sales share of the Japanese toy Sonny Angel was extremely high, and its repurchase rate was clearly higher than in other categories.

That discovery led him to decide to cut—eliminate all other categories and go all in on collectible toy IP.

The core of The Unique is precisely about the balance Pop Mart has found between “the unique” and “the mainstream.” The book summarizes Wang Ning’s view of Pop Mart’s business model:

Industrialized production of art (turning once-niche artist toys into standardized consumer products); building ready-made channels (bringing collectible toys from niche circles into the broader public’s view); and transforming the consumer market (turning collectible toys from a male-dominated “hobby” into a female-dominated “consumer product”).

These “basic skills,” treated lightly in the book, have become the soil that allows Pop Mart to incubate LABUBU today.

In the CCTV program Dialogue, Wang Ning further explained the company’s barriers: “hard barriers” are the accumulation of detailed operations over 16 years, while “soft barriers” are the early discovery of top industry artists.

He still remembers the line he said when meeting Molly’s artist, Wang Xinming, in 2016: “I hope Molly can sell 1 million units in a year.” Back then he thought it was unrealistic—now it has already exceeded 10 million in a year.

So when investors anxiously ask “Where is the next LABUBU?”, Wang Ning’s calmness actually comes from expectations. In Dialogue, he said: “Any small subcategory can give birth to a great company. And doing one thing well is not easy.”

Today, when Duan Yongping reexamines the company, what he sees is also this kind of accumulation built “little by little.”

As Duan Yongping put it, investing buys the “total quantity in the future”—and that total quantity isn’t built by stacking one mega hit; it’s built by long-term operational accumulation.

A key concept repeatedly emphasized in The Unique is: the vitality of an IP lies in whether it can be integrated into consumers’ everyday lives. At present, Pop Mart has already launched a series of strategic layouts, trying to further break the stereotype of a “blind box factory.”

First, move into small home appliances to capture physical space.

In April, Pop Mart will launch IP-based derivative small appliances, ranging from electric kettles and coffee machines to hair dryers. This is not a traditional cross-industry move; the core is to expand the boundaries of how IP can be expressed. When LABUBU shows up at your dining table and in your bathroom, it is no longer just a toy—it becomes a “life companion.”

Second, develop content to build a spiritual universe.

In CCTV Dialogue, Wang Ning previously said: “Movies can thicken the IP’s ‘thickness.’ Their scenes and stories can also be applied to theme parks and product development, constructing a comprehensive IP commercial framework.” In the second half of 2026, LABUBU will roll out a 4.0 series; picture books and a live-action animated film co-developed with Sony Pictures are also in the works. If selling figurines used to be “selling looks,” then making movies is “selling the soul.”

Third, iterate the theme park to strengthen immersive experiences.

During the earnings call, Pop Mart COO Si De revealed that City Park Phase 1.5 is expected to open in summer 2026, and Phase 2 is expected to start construction in 2027. It will add themed scenes featuring SKULLPANDA and the Star people. This “combo” has a strikingly similar path to the one Disney took back then.

But all of this needs time.

In The Unique, Pop Mart founder Wang Ning emphasizes more than once to “respect time and respect operations.” IP cultivation can’t be rushed. It needs time for stories to settle, and it needs to use real-life scenarios to strengthen memory.

He believes, “We belong to long-termism. We think things that should be done over the next decade shouldn’t be rushed—you shouldn’t think they can be done in just one or two years.” In his view, slow is fast, and less is more. Focus on one thing and do it little by little, and only by reaching the best can it be competitive.

This also explains why, in the years when his performance was at its best, he chose the most conservative growth guidance.

Over the past few years, Pop Mart indeed looked like a race car sprinting wildly along the F1 track. In 2025, overseas business revenue surged 291.9% year over year; the Americas market grew even faster by 748.4% (about 7.5 times).

With such high growth rates, the consumption of resources within the organization is enormous.

“Hope that 2026 is a year for getting into the pit stop.” Behind Wang Ning’s words is the meaning that this company, which has experienced the pains of high-speed expansion, has chosen to proactively slow down, adjust its organization, and refine the fine-tuning of global operations.

In The Unique, multiple investors described Wang Ning as “steady in temperament, not talkative, not showing joy or anger on his face, and having many excellent qualities of consumer-industry entrepreneurs.” Also, unlike many internet entrepreneurs, Wang Ning rarely talks about “subversion.” He emphasizes “operations.”

As the book puts it, Pop Mart is the result of “respecting time and respecting operations.”

Proactively slowing down to build a thicker “moat”

In the final part of The Unique, Wang Ning attributes Pop Mart’s success to two broader backdrops: China’s “strength in manufacturing” and China’s “big market.”

In interviews, he said: “China has entered the Dividend 2.0 stage. Reform and opening up have given us two weapons: one is Made in China, and the other is the Chinese market. Made in China has already been tempered by global markets and is mature enough to manufacture products of world-class quality.”

This is one point many people discussing Pop Mart overlook.

That LABUBU has become a world-class IP is not only because of design, but also because China’s supply chain turns the artist’s wild imagination into high value-for-money, tangible products.

In a CCTV interview, Wang Ning proposed the concept “From the world To the world”—coming from the world and then going back to the world. He believes it doesn’t need to rely on traditional elements to go global; “world-class design language plus China-level manufacturing capability” is what can be widely accepted.

Now, when Pop Mart sells LABUBU in front of the Egyptian pyramids and beneath the Eiffel Tower in Paris, what it exports is not only collectible toys, but also a “emotion-consumption” model defined by Chinese companies.

Finally, we return to the question that frightens the capital market: if there were no LABUBU, what would Pop Mart do?

Actually, the most valuable part of Pop Mart’s story isn’t how it manufactures mega hits, but how it still maintains reverence for “operations” even after mega hits.

At the latest earnings call, Wang Ning also answered this question with data.

He said Pop Mart is an IP commercialization platform. Even if you remove all of LABUBU’s performance, the company will still grow rapidly. In 2025, besides LABUBU, the six major IPs—SKULLPANDA, CRYBABY, MOLLY, DIMOO, Star people, and others—each surpassed revenue of RMB 2 billion, and 17 IPs had annual revenue exceeding RMB 100 million.

For now, one thing can be confirmed: Pop Mart’s choice to actively steer into the “pit stop” isn’t about quitting the race. It’s about checking the engine, changing tires, and getting ready for the next longer stretch of track.

The Unique: The Journey of Pop Mart Founder Wang Ning from a Grocery Shop to the World of IP

Li Xiang / Author

CITIC Publishing House