"Pop Mart Plummets as 'Labubu' Popularity Wanes — Nearly 2 Trillion Yen in Market Value Vanishes, Is the Global Boom at a Standstill?"

1. What Happened—Understanding the "Plunge" in Numbers

On September 15 (Hong Kong), Pop Mart's stock was sold off to as low as -8.96% at one point, closing lower as well. JPMorgan downgraded its investment rating and cut the target stock price by about 25%, which triggered the sell-off. Since the peak on August 26, approximately $13 billion (about ¥1.92 trillion) has evaporated, wiping out about a quarter of the market capitalization. Year-to-date, it is still over +180%, but the extraordinary rally seems to have hit a "plateau."Financial Times+1

2. Still Strong—The "Extraordinary Earnings" of the First Half of 2025

In the first half of 2025, Pop Mart's revenue increased by 204% year-on-year to 13.88 billion yuan, and net profit expanded nearly fourfold. Among them, the main IP group "THE MONSTERS" (including Labubu) accounted for **34.7% of sales with 48.1 billion yuan**, becoming the engine of revenue.Reuters Japan

Points
・Contribution of Labubu: 34.7% of first-half sales
・Gross Margin: Estimated to have reached **70.3%** in 2025 (luxury brand level)WIRED

3. The Dynamics of the "Labubu" Phenomenon—Blind Boxes x SNS x Celebrities

Labubu has become a global symbol through the "gacha" nature of blind boxes, visualization via TikTok/Instagram, and celebrity exposure from figures like Lisa and Beckham. Flagship stores have opened not only in China but also in London, Los Angeles, and San Francisco Union Square, expanding experiential retail through stores (443) and Robo Shops (2,437 units).Financial Times+1

4. Signs of Deceleration—When "Scarcity" Fades

The recent plunge hints at a decline in resale prices (up to -37% compared to March), indicating a decrease in scarcity. JPMorgan warns of an "overpriced perfect scenario." The company cites increased supply as the reason for the decline in resale prices. The success of blind boxes hinges on scarcity and freshness. Supply adjustments and product cycle design are becoming increasingly challenging.Financial Times

5. Realization of Valuation—PER and the Shadow of Index Inclusion

Currently, the forward PER is about 23 times. It had been rising with the tailwind of inclusion in the Hang Seng Index and H-share Index, but as index fund follow-up has run its course, concerns about performance slowdown and cooling of the secondary market have led to a revision of expectations.Bloomberg.com

6. Dependency Risk—The Light and Shadow of "Conquering the World with One IP"

• Concentration: Dependency on "THE MONSTERS," including Labubu, exceeds 30%.

• Other IPs: While there are popular IP groups like SkullPanda, Molly, and Dimoo, growth is skewed towards Labubu.

• Competitive Pressure: The rise of "peripheral IPs" like Miniso's Wakuku and counterfeit Lafufu is also a topic. While some see the original's strength as intact, market saturation is undoubtedly approaching.Financial Times

7. Overseas Expansion as a "Double-Edged Sword"

Rapid expansion of store networks in the US, Europe, and Southeast Asia. The combination of experiential retail x Robo Shops is capital-efficient and tends to maintain high gross margins. On the other hand,

• Inventory Optimization (adapting to demand differences by country/city)

• Counterfeit Measures (suppressing the inflow of pirated versions)

• Culture Fit (differences in local "cute" sensibilities)
  
  are increasing operational difficulty. Landmark openings like the new San Francisco store become brand assets, but as the "queue" excitement normalizes, revenue patterns smooth out.San Francisco Chronicle

8. Company Strategies—What is the "Next Move"?

• New Version/Mini Labubu: Expanding with mini sizes and derivative series.euronews

• Animation Project: Aiming for long-term fan engagement by expanding the worldview of the IP.Bloomberg.com

• Supply Plan: Enhancing supply capacity to meet strong demand. However, balancing scarcity is crucial.Reuters Japan

9. Three KPIs Investors Should Watch

1. Secondary Market Premium: Premium rate of resale prices (rise → heat, fall → cool).Financial Times

2. IP Mix: From dependence on Labubu (sales ratio) to growth of other IPs.Reuters Japan

3. Inventory Turnover Days: Presence or absence of signs of stagnation due to increased supply.

This article is not investment advice. Please consider individual investment decisions on your own.

10. Implications for the Japanese Market

Japan has a strong foundation for gacha culture and character IP consumption. In phases where short-term overheating cools down,

• **"Entry-level demand" after price correction** expands (resale premium shrinks).Financial Times

• Activation of In-Store Experience (reignite with limited/experiential events).

• Horizontal IP Expansion (anime, games, collaborations) is key to sustaining domestic fandom.

11. Scenario Analysis—Three Future Visions

① Reheating Scenario (Probability: Medium)

Animation and new series become hits. Queues at overseas flagship stores revive, and the secondary market recovers. Maintains **YTD+** while reaching a plateau.Bloomberg.com

② Normalization Scenario (Probability: High)

Premiums thin out, focusing on primary market sales. Core fan consumption x broad and shallow new customers mix for stable growth.

③ Contraction Scenario (Probability: Low to Medium)

Sales plummet due to IP fatigue and competition/IP clones. The backlash of dependency becomes apparent.Financial Times

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