Labubunomics: The Economics of Pop Mart’s Labubu Craze

This Week’s Focus: Labubunomics

Pop Mart’s “ugly-cute” elf Labubu has exploded from niche art toy to global craze, driving revenues to nearly $2 billion in 2024 and pushing the company’s market cap past $20 billion. Celebrity endorsements, viral TikTok unboxings, and savvy scarcity tactics have fueled its rise, with Pop Mart expanding globally through mega-stores and themed cafés. Yet risks like regulatory scrutiny, counterfeits, and the possibility that hype fizzles still loom. Whether Labubu becomes a lasting cultural icon or a fleeting fad, Pop Mart has built a powerful model of scarcity, spectacle, and surprise that could outlive its star mascot.

What do a pointy-eared plush monster and explosive stock growth have in common?

In the case of Labubu, Pop Mart’s mischievous toy sensation, the answer is billions of dollars. Labubu has gone from niche art project to global phenomenon, driving triple-digit revenue growth and turning Pop Mart into a company worth over $20 billion in market capitalization as of mid-2025. While that still trails Western giants like Mattel and Hasbro, Pop Mart’s growth rate and profitability have given it a market value that increasingly rivals them.

In today’s analysis, we’ll try breaking down the “Labubunomics,” i.e., Labubu’s economics, while exploring how its business model works, the role of virality and scarcity, and where this wild ride might be headed next.

And yes, I will use equations to explain the phenomena.

And yes, I have a Labubu, gifted by a former student.

Let’s unpack how running out of toys became a billion-dollar strategy.

Labubu: From Quirky Toy to Global Phenomenon

Labubu began as an “ugly-cute” elf-like character created by artist Kasing Lung in 2015, and was first released as a collectible toy in 2019. For a few years it simmered under the radar, but 2024 saw Labubu’s popularity explode worldwide. A key catalyst was celebrity endorsements—BLACKPINK’s Lisa showed off a Labubu bag charm on social media in April 2024, sparking a viral trend among her 100+ million followers. Soon, other stars like Rihanna and even Kim Kardashian were spotted with Labubus. On TikTok, the hashtag #Labubu has been used in over 1.6 million posts—mostly enthusiastic “blind box” unboxing videos.

This craze translated into serious business. Pop Mart’s revenue doubled in 2024 to nearly $2 billion, driven largely by Labubu’s internet fame. In the first half of 2025, sales absolutely skyrocketed: revenue hit 13.88 billion yuan ($1.93 billion), up 204% year-on-year, while net income rose even faster—up 397% to 4.57 billion yuan.

Much of this success comes from Labubu and its related “The Monsters” line, which saw an astonishing 700%+ annual growth in 2024. In fact, Labubu alone contributed roughly 3 billion RMB (~$418 million) in 2024—about 23% of Pop Mart’s total revenue.

The global reach of Labubu-mania is striking. Pop Mart is racing to open new stores worldwide to capitalize on demand, and even opened the world’s largest Pop Mart store in Bangkok in August 2025, where fans camped out for limited-edition Labubus. The company plans to launch around 100 more outlets overseas in 2025 alone. According to CEO Wang Ning, overseas growth has been “much faster than expected,” and foreign sales are predicted to exceed domestic Chinese sales in 2025. In particular, North America is on track to overtake Southeast Asia as a key market this year. Clearly, Labubu has broken out of its home market and gone fully global—an impressive feat for a toy that, not long ago, was virtually unknown outside collector circles.

The Business Model: Blind Boxes and Big Margins

So, what’s the secret sauce behind Labubu’s economics?

A big part of it is Pop Mart’s blind-box business model and the high-margin collectible strategy. Unlike a typical toy sale, buying a Labubu often means purchasing a blind-box pack – you don’t know which variant you’ll get until you open it. This gamified randomness turns every purchase into a little thrill of unboxing. Fans chasing a specific rare design might buy multiple boxes or cases, which boosts sales per customer. The mystery element also fuels repeat purchases, as collectors keep trying for the full set. In effect, Pop Mart weaponized surprise similarly to trading cards—but applied to designer plush toys.

Meanwhile, the company keeps fans spending by continually releasing new Labubu series and collaborations. On average, new Labubu collections drop every few months. Each series features Labubu in different themes or outfits (e.g., macarons, astronauts, holiday editions), including some figures more scarce than others. Pop Mart staggers these releases and often makes them event-like—for example, restocks happen at set times (Thursdays, online) and tend to sell out in seconds. This constant cycle means there’s always another Labubu for collectors to chase, preventing the fad from going stale and encouraging ongoing purchases. It’s a bit like sneaker drops or trading card sets: a never-ending “collect ‘em all” pipeline.

Furthermore, Pop Mart has built an omnichannel sales network to get Labubus into eager hands. In China, they pioneered automated “Robo Shop” vending machines to sell blind boxes in malls and subway stations. Globally, they’ve opened dozens of brick-and-mortar stores (21 in the U.S. as of mid-2025, aiming for 40 by year-end), and flagship megastores like the one in Bangkok.

They’re also leveraging e-commerce and social platforms: notably, TikTok Shop in the U.S. has been a huge success for Pop Mart, with sales growing 1000% year-over-year as of May 2025. Pop Mart runs marathon livestreams on TikTok that draw thousands of viewers, and Labubu drops during these streams routinely sell out within minutes. Interestingly, Pop Mart achieved this with a relatively small influencer footprint—the brand worked with far fewer content creators than typical top sellers—indicating that much of the demand is truly organic fan enthusiasm rather than paid promotion.

Having such direct channels to consumers (physical stores, vending machines, and livestreams) gives Pop Mart both visibility and control over customer experience, which further strengthens its economics by reducing reliance on middlemen. In short, Pop Mart has crafted a high-margin, high-volume model where each Labubu release is a mini-event that drives fans into a buying frenzy.

Engine of Hype: Social Media and Viral Growth

Just like everything these days. Labubu’s rise would not have been possible without the fuel of social media and the virality of an engaged collector community. In many ways, Labubu spread like an internet meme—a cute, oddball character that caught eyes online and then kept gaining momentum as people shared it. Platforms like TikTok, Instagram, and Xiaohongshu (China’s Little Red Book) have been crucial. Users film themselves unboxing Labubu blind packs, showing off their collections, or even incorporating the doll into outfits and skits. Those videos rack up millions of views, attracting even more curious buyers into the fold. The more people post about Labubu, the more others want to join the fun—a classic viral growth where the fandom’s visibility begets further growth.

Celebrity influencers amplified this effect—BLACKPINK’s Lisa or pop star Lizzo flaunt a Labubu, it instantly validates the toy as a trendy accessory, not just a kids’ plaything. Their fans jump on the bandwagon, and the cycle continues. Pop Mart couldn’t have bought better advertising than the free hype these celebs and viral videos provided. The result is that Labubu has become a household name (at least among Gen Z, collectors, and toy enthusiasts, but even in the house of this Gen-Xer) in an amazingly short time. As one resale platform director observed, unlike many fad products that spike and then fade, Labubu has shown a steady month-by-month rise in demand.

It also helps that collecting Labubus has a built-in social component. The thrill of the hunt and the mystery-box reveal make for sharable moments. Fans don’t just want the toy; they enjoy the experience and community. Online forums and groups swap tips on where to find certain variants, and marketplaces like Whatnot and StockX host live trading events that feel like virtual conventions for Labubu lovers. Notably, Labubu became the No.1 traded brand in collectibles on StockX for eight months straight, with some limited sets breaking records for first-day sales on the platform. When a new release hits, collectors worldwide are essentially competing (often publicly) to snag them, which creates a frenzy that only draws more attention. This kind of consumer behavior—where people are setting calendar alerts, lining up at stores, and tuning into hour-long livestreams just for a chance to buy—shows how powerful the network-driven hype around Labubu has become. Every excited buyer or post is like a node reinforcing the Labubu phenomenon. In essence, the community markets itself.

A core driver of Labubu’s economics is engineered scarcity. Pop Mart keeps supply low enough to spark frenzy, but frequent enough to keep collectors hooked: nearly every drop is limited, stock vanishes within minutes, and fans line up for hours at stores. This has turned Labubu into a gold rush for both Pop Mart and resellers—retailers report stock flipping from a few thousand dollars into hundreds of thousands in monthly revenue, while items that cost $20–30 routinely resell for several times more, with ultra-rare figures fetching auction prices in the six figures.

For Pop Mart, the strategy minimizes inventory risk and turns each release into an event; the danger, of course, is that if enthusiasm tilts too far toward speculation, a sudden crash could follow. For now, genuine cultural cachet and fashion appeal mean scarcity is more accelerant than foundation—an ingredient that intensifies the dish rather than being the dish itself.

Explaining the Labubu Doll Craze with Economic Models

To bring the economics of Labubu into sharper focus, it helps to formalize how the toy delivers value to consumers and why that value has fluctuated so dramatically over the past two years. We can think of each prospective buyer weighing a simple utility function:

where v is the intrinsic enjoyment a person gets from owning a Labubu, p is the purchase price, R(N) captures the recognition or bandwagon effect (the visibility of Labubu in society as the owner base N grows), L(N) measures resale-market liquidity (the thickness of secondary markets as more participants join), and γN reflects the exclusivity loss as ownership expands (the dilution of status once “everyone” has one).

This structure builds the key dynamics into one compact equation. At first, when few own the toy, recognition and liquidity are low, so value is driven mostly by intrinsic appeal. As Labubu becomes widely seen—popping up on celebrities’ bags and in TikTok feeds—recognition soars and resale liquidity deepens, raising utility for new buyers. But as ownership grows further, the snob effect kicks in: exclusivity fades, and the very ubiquity that fueled virality begins to erode status.

At its core, this model translates the intuition behind collectible crazes into economic terms. The buyer’s decision balances four forces: intrinsic enjoyment of the toy, the out-of-pocket cost, the added value from being seen with a culturally recognized object, and the option value embedded in liquid resale markets. The counterweight is exclusivity: as more people own the toy, the very scarcity that made it attractive in the first place begins to erode. Unlike a classic network effect, where more users consistently raise utility for everyone, Labubu’s economics combine a rising recognition curve with a declining exclusivity curve. The result is a hill-shaped utility function—one that initially grows with adoption but eventually flattens and declines as the market saturates.

Estimating Parameters from Data

We don’t have a lot of public data, but we can use the trajectory of revenue and resale prices from 2023 to 2025 to get a sense of the parameters.

Price sensitivity: In early 2025, blind-box sets retailed at roughly ¥594 but resold for ¥1,500–2,800. The fact that fans were willing to pay 3–5× retail implies very inelastic demand at launch—indicating that utility from recognition and resale prospects were high enough to offset a huge premium. Plugging that into the model, αR(N) and μln⁡L(N) were clearly dominant in this phase.

When Pop Mart dramatically increased supply in June 2025, resale prices collapsed to ¥650–800. The sharp decline is evidence of the −γN term at work: as N rose with new production, exclusivity diminished, and the incremental recognition effect was outweighed by status dilution. Put differently, γ was large enough that additional buyers reduced marginal utility, driving equilibrium prices closer to retail.

On the revenue side, Labubu (The Monsters) generated about ¥0.37 billion in 2023, jumped to ¥3.0 billion in 2024 (+726%), and reached ¥4.8 billion in just the first half of 2025. If we interpret these sales figures as reflecting the area under the demand curve where U(N)≥0, they reveal the S-shape implied by the utility model: a slow start, then explosive adoption once recognition took off, and finally a bend toward saturation as exclusivity loss became material. The model’s recognition term αR(N) dominates in the steep part of the curve, while −γ pulls it down at higher levels of penetration.

Predictions

Fitting a logistic diffusion curve to these revenues suggests a saturation point around ¥8–10 billion annually for Labubu, equivalent to perhaps 20–30 million units worldwide depending on the average selling price. That is the implied carrying capacity MMM consistent with the observed inflection in 2024–25. In terms of the utility model, this means that beyond that level of adoption, the exclusivity penalty γN outweighs any further gains from recognition or liquidity.

That said, logistic curves assume steady diffusion and gradual saturation. Collectibles often behave differently: demand can overshoot and collapse as recognition turns into overexposure, much like Beanie Babies in the 1990s or Funko Pops more recently. In other words, the model is a useful baseline but not a guarantee—it can’t fully capture the boom-and-bust dynamics of fad-driven markets.

Translated into practical terms, we should expect Labubu revenue growth to slow sharply after 2025. Prices in secondary markets will hover closer to retail, with occasional spikes only when Pop Mart engineers artificial scarcity through special editions or regional drops. The bandwagon effect (α(N)) is already near its peak: most consumers who respond strongly to recognition have seen the product by now. Liquidity in resale markets (μln⁡L(N)) will remain an important support, but it’s unlikely to generate further premiums once supply is abundant.

The model also points to the strategic levers Pop Mart controls. By managing supply, it can influence the relative size of the −γN. By creating new variants or IP, it can reset N and restart the recognition cycle. And by building official trading platforms or digital tie-ins, it could strengthen the liquidity channel, potentially turning a weak externality into something closer to a network effect.

In short, the compact model captures why Labubu mania rose so quickly and why it will inevitably level off. Early recognition and liquidity propelled demand far beyond intrinsic value, but exclusivity loss now constrains future growth. Pop Mart’s challenge is to keep refreshing the equation—by creating new characters, staging scarcity, or embedding stronger network complements—if it wants Labubu’s billion-dollar moment to endure beyond a single S-curve.

Outlook: Bubble or Long-Term Boom?

The big question is whether this plush-monster economy is a bubble waiting to pop or the beginning of a lasting franchise.

For now, the signs point to more froth: demand keeps rising, resale prices are still high (if a little less absurd after supply was increased), and Pop Mart is doubling down with mega-stores, cafés, and 100 overseas openings in a single year. Those aren’t the moves of a company bracing for a crash; they’re the moves of a firm convinced its fuzzy mascot has legs—or at least enough teeth to bite into every market from Bangkok to Brooklyn. The Western market is barely tapped, and with celebrities still casually turning Labubu into a fashion accessory, the hype cycle has plenty of fuel left. We could expect backpacks, Netflix spin-offs, and a holiday season plastered with Labubus—because why not, we’ve commoditized stranger things.

But history is littered with once-irresistible fads that ended up in garage sales and attics—Beanie Babies say hello.

Other risks are possible: regulators in China have already placed restrictions on blind-box sales to minors, and similar scrutiny could spread to Western markets if the model is seen as too close to gambling. Counterfeits are another threat: Labubu knock-offs are already circulating widely, which could dilute brand equity and squeeze margins. And while the character has proven irresistible in Asia, cultural translation is uncertain—what resonates in Bangkok or with K-pop fans may not automatically sustain demand in Europe or the U.S.

If scarcity tips from exciting to exasperating, if regulators decide blind boxes look too much like slot machines, or if consumers tire of paying speculative prices for plush goblins, the Labubu train could hit the brakes fast. The most optimistic scenario is that Labubu graduates from fad to evergreen icon, joining Hello Kitty or Mickey Mouse in the cultural pantheon. More realistically, Pop Mart has perfected a formula—scarcity, spectacle, and surprise—that can be recycled into new characters even if Labubu’s shine fades.

Either way, the company has created a feedback loop where hype begets sales, sales beget expansion, and expansion keeps the hype alive. Whether that loop spins into permanence or peters out in a puff of polyester stuffing is anyone’s guess, but for now Wall Street and Main Street alike are happily along for the ride.