Why the Labubu Hype Is Dying and What It Means for Toys

Ensito’s engagement metrics tell a stark narrative. Clips that once effortlessly racked up tens of thousands of views within minutes now struggle to break into algorithm feeds. Realizing the tide has turned, his coverage has quietly migrated toward Hello Kitty merchandise and tactile squishy toys. His experience is far from isolated; across TikTok, YouTube, and Instagram, the once-frenzied community of reseller-collectors is witnessing an unprecedented chill. The viral momentum that allowed a Beijing-headquartered startup to achieve a market capitalization surpassing legacy giants Hasbro and Mattel combined is evaporating rapidly.

The Anatomy of a Manufactured Frenzy

When Pop Mart originally introduced the Labubu character in 2019—designed by Hong Kong-born artist Kasing Lung as part of “The Monsters” series—it unlocked a masterclass in modern emotional marketing. Selling primarily through “blind boxes” priced around $15 (£11), the brand combined affordable luxury with the high-dopamine sensation of unboxing mystery items. Consumers weren’t merely purchasing a PVC figurine or a bag charm; they were buying an adrenaline rush rooted in variable reward mechanics.

For several years, the strategy produced explosive financial growth. The craze transcended niche collector circles when global cultural icons, including Kim Kardashian and Blackpink’s Lisa, began featuring Labubu plush charms on their designer handbags. What followed was a golden era of extreme scarcity marketing. Devotees routinely queued for hours outside pop-up shops. In London, physical altercations broke out inside retail locations, forcing management to temporarily pull the items from UK shelves to maintain public safety. On secondary trading platforms, rare colorways fetched thousands, culminating in a headline-grabbing auction where a human-sized Labubu sculpture sold for over $150,000.

“The blind box tactic made collecting feel intensely nostalgic, evoking the exact emotional thrill of opening unlabelled presents as a child. But when the mystery turns into predictable inventory on a shelf, the psychological spell breaks.” — Katelynn Carlson, Retail Brand Strategist

The operational engine behind this mania was Pop Mart’s sprawling retail distribution architecture. By mid-2024, the Hong Kong-listed entity boasted over 500 brick-and-mortar storefronts across 30 countries, supplemented by more than 2,000 automated “Roboshops” (vending machines). According to performance metrics published by Bloomberg financial indicators, the firm’s valuation hovered near $24 billion at its zenith. Yet, underneath this rapid international expansion lay a fatal structural vulnerability: extreme dependency on artificial scarcity to fuel consumer demand.

The Financial Reckoning: By the Numbers

The first major structural crack appeared when Pop Mart published its third-quarter financial updates. Global revenue outside mainland China collapsed by as much as 50% year-over-year, with the crucial United States division taking the brunt of the downturn—suffering a staggering top-line decline exceeding 70%. Stock prices responded accordingly, plunging by more than 50% from their peak high as institutional investors scrambled to adjust their valuations.

To contextualize the scale of this contraction, consider how Pop Mart’s key financial metrics stack up against established global toy manufacturers and emerging competitors in the designer vinyl space:

Market analysts argue that Pop Mart fell victim to the classic scaling trap. As long as supply remained severely restricted, secondary market prices stayed elevated, creating an ecosystem of resellers and speculative buyers who amplified organic social media reach. But when the company dramatically ramped up manufacturing output to capture missed sales revenues, the balance tipped overnight.

The Scarcity Paradox: How Overproduction Killed the Magic

“Exclusivity was the oxygen that kept the Labubu flame burning,” explains Dr. Samer El Hajjar, a senior marketing lecturer at the National University of Singapore. “When consumers realize that anyone can walk into a local mall and pick up an entire series off a fully stocked shelf, the aspirational value vanishes. The product ceases to be a status symbol and reverts to being a piece of plastic.”

Collector Ensito confirms this psychological shift firsthand. “It used to feel like a high-stakes hunt,” he recalls. “Now, I walk into a Pop Mart, and there’s a whole wall of Labubus sitting there undisturbed. The magic evaporated the moment the scarcity did.”

As early adopters retreated, the secondary market crashed. Figurines that previously traded for three to five times their suggested retail price on platforms like StockX and eBay quickly settled below retail cost. This price collapse systematically eliminated the financial incentive for speculative buyers, who had previously purchased blind boxes in bulk to resell hidden “chaser” variants for profit.

The Narrative Gap: Products Searching for a Story

Beyond supply-side miscalculations, brand strategists point to a fundamental distinction between short-lived trendy novelties and enduring intellectual properties (IP). Industry powerhouses like Disney, Mattel, and Sanrio build character equity through narrative storytelling—films, television series, comic books, and video games—before monetizing that emotional connection via consumer products.

Pop Mart attempted to execute this process in reverse. The company manufactured cute, visually arresting figurines first, hoping to retroactively build a narrative universe around them later. While Pop Mart has announced ambitions for a feature-length Labubu animated film and opened a 40,000-square-meter theme park in Beijing, critics remain skeptical that a character built on social media trends can transition into a multi-generational icon.

“The real test for Pop Mart over the next 18 months is whether they can make consumers care about a character without a Hollywood celebrity holding it in an Instagram story. Selling a toy before a story is a dangerous strategy; once the visual trend changes, you have no narrative anchor to hold consumer loyalty.” — Ashley Dudarenok, Founder of ChoZan Market Intelligence

By contrast, Tokyo-listed Sanrio reported record net operating profits during the same fiscal period. Supported by 50 years of character development around Hello Kitty, Cinnamoroll, and My Melody, Sanrio demonstrated that deep emotional attachment withstands shifting algorithmic trends far better than visual viral novelties.

Market Migration: Where Are Collectors Going?

The cooling of the Labubu frenzy does not mean consumers have abandoned vinyl art toys entirely. Instead, capital and attention are fragmenting across a wide spectrum of competing blind box ecosystems, signaling a broader evolution in the post-pandemic collectibles market according to reports tracking global retail market metrics.

1. The Rise of Minimalist Office Aesthetics (Sonny Angel & Smiski)

Japanese manufacturer Dreams Inc. has emerged as a primary beneficiary of Pop Mart’s slowdown. Their flagship lines—Sonny Angel (unclothed cherub figures featuring whimsical headwear) and Smiski (glow-in-the-dark, poseable figurines designed to sit discretely on desks)—have seized market share among Gen Z office workers. Unlike the bold, aggressive aesthetics of Labubu’s sharp teeth and bright faux-fur coats, Smiskis and Sonny Angels offer understated, desk-friendly decor that appeals to consumers seeking low-key comfort rather than high-profile fashion statements.

2. High-Volume Value Players (Miniso)

Guangzhou-founded retail titan Miniso has mounted a formidable challenge by leveraging established global media franchises. Operating more than 8,000 stores worldwide, Miniso offers blind boxes featuring Disney, Marvel, Sanrio, and anime characters at prices significantly lower than Pop Mart’s tier. By focusing on established intellectual properties rather than unproven original art characters, Miniso insulates itself from single-character fatigue.

“Modern shoppers aren’t necessarily devoted to a specific brand origin,” stated Vincent Huang, Vice President of Miniso’s International Operations, during a recent retail summit. “They evaluate the immediate physical shopping experience—the aesthetic design, absolute value for money, and personal joy. If a blind box costs $7 instead of $16 and features a character they’ve loved since childhood, the choice becomes straightforward.”

The Collector Spectrum: Exhaustion vs. Absolute Loyalty

The decline of the Labubu craze highlights a fundamental divide within consumer communities: the tension between trend-chasers and genuine enthusiasts.

For content creators whose business models depended on high-traffic unboxing content, the decline has forced an immediate pivot. Lawrence Yu, a Melbourne-based creator who previously spent over $1,400 acquiring 50 Labubus to fuel a channel that routinely racked up over one million views per clip, has almost entirely stopped posting about the brand.

“The hype cycle has definitively fizzled,” Yu notes. “Two years ago, people were borderline hysterical trying to source these boxes. Now, my audience moves past those clips in seconds. I’ve shifted to being far more selective. I’m not buying a full case just because a new series lands.”

Similarly, Canadian collector Clara Barbero bluntly labels Labubu a “dead trend” in terms of mainstream viral relevance. While she retains her existing collection, her purchasing habits have shifted dramatically toward long-term curation. “I used to buy into the fear of missing out,” Barbero admits. “Now I look at new releases and ask myself if I’ll actually want this on my display shelf in three years, or if I just wanted the high of pulling a rare variant.”

Yet, for a small core of dedicated fans, the pop-cultural cool-down is viewed as a positive development. Hedy Khaled, a collector from Liverpool who owns 70 Pop Mart items, views the exodus of speculative buyers as a healthy normalization.

“The scalpers and casual trend-chasers have moved on to the next viral item, which leaves the community back in the hands of people who genuinely love the artistic design,” Khaled says. “I don’t collect Labubus so I can post them on social media for clout. I collect them because looking at them on my bookshelf makes me happy. The decline in secondary market value doesn’t change that at all.”

Strategic Imperatives: How Pop Mart Can Pivot

As Pop Mart faces a new operational reality, turnaround experts suggest the company must undergo a rapid transition from a viral fad generator to an integrated media and lifestyle conglomerate. To stabilize its market position and rebuild investor confidence, several strategic pivots are already underway:

• Diversification of Character Portfolios: Reducing revenue reliance on “The Monsters” IP by promoting secondary character lines such as Molly, Skullpanda, and Dimoo, while actively signing emerging independent visual artists.
• Media Integration & Storytelling: Accelerating the production of long-form narrative media, including animated series and digital interactive content, to forge deeper emotional bonds with consumers that outlast social media trends.
• Experiential Retail Destinations: Expanding flagship lifestyle hubs and theme park experiences, shifting the value proposition from simple product acquisition to immersive brand interaction.
• Localization of Product Lines: Designing region-specific characters and culturally tailored collections in key expansion markets across Europe and Southeast Asia to counteract weakening US demand.

The Post-Hype Landscape of Art Toys

The trajectory of the Labubu craze serves as a case study in the dynamics of modern viral commerce. In an economy increasingly governed by algorithmic trends, speed-to-market and manufactured scarcity can launch a niche art product into a multi-billion-dollar global phenomenon overnight. However, without deep narrative roots, multi-generational relevance, or disciplined supply management, hyper-growth remains incredibly difficult to sustain.

As collectors like Ensito replace their monster figurines with Hello Kitty plushies and tactile squishies, the toy industry is absorbing a powerful lesson. Blind boxes can capture consumer attention, but only authentic emotional storytelling can retain it over time. Pop Mart’s ultimate challenge in the coming years will not be manufacturing more fluffy monsters—it will be convincing a fickle public to care about them after the internet moves on.