Labubu's Decade-Long Rise: How Pop Mart's 'Ugly-Cute' Monster Conquered the World

Pop Mart's 2024 annual report painted a rosy picture, with Chairman and CEO Wang Ning using an affectionate term to describe the past year. The Pop Mart Group reported a revenue of 13.04 billion yuan, a staggering 106.9% year-on-year increase.

Adjusted net profit soared to 3.4 billion yuan, a 185.9% jump, marking a new high for the company. Wang Ning's personal wealth has also seen a significant boost, reaching $22.4 billion as of June 11, according to Forbes, placing him among the top 100 billionaires globally.

This 'fluffy' story is gilded with wealth. Wang Ning's creation of Pop Mart has coincided with a new consumer era that has propelled both the company and himself to success.

The Labubu Phenomenon

In Los Angeles, hundreds of young people line up outside the Beverly Center at 3 AM, eager to purchase a quirky monster toy from China: Labubu. The popularity of Labubu is not limited to Los Angeles; similar scenes have been witnessed in cities around the world.

Fans proudly display their Labubu figures, expressing their adoration for the 'ugly-cute' creature.

Labubu's appeal lies in its contrasting design elements: a blend of 'Nordic elf, devilish fangs, and a soft, plush texture'. This unconventional aesthetic defies traditional notions of cuteness, resonating with young people who seek individuality and companionship. The high-quality craftsmanship of the toy is also a key factor in its success.

Wang Ning emphasized that Pop Mart's pioneering use of vinyl-plush material was crucial to Labubu's popularity. By combining vinyl and plush, Pop Mart created a unique texture and prevented facial deformation, enhancing the toy's overall appeal.

Beyond the product itself, strategic marketing tactics such as limited releases, celebrity endorsements, and user-generated content on social media have contributed significantly to Labubu's cultural phenomenon. These factors have transformed Labubu into a contemporary symbol of emotional connection and community identity.

A Decade in the Making

Contrary to the perception of overnight success, Labubu's journey to becoming a top-selling toy has been a decade-long process. The Labubu character is part of THE MONSTERS series, which debuted in 2015. Pop Mart acquired the IP in 2019, but it wasn't until 2024 that the series achieved significant commercial success, generating over 3 billion yuan in revenue, a 726.

6% increase year-on-year. Wang Ning also faces similar misconceptions about his journey.

Pop Mart: The 'Record Label' of the Toy World

'People think we are a new company, but we have been around for 15 years, and Labubu has been around for 10 years. This is a long time,' Wang Ning noted. In 2010, Pop Mart began as a retailer of trendy merchandise, profiting from wholesale and resale.

The company's transformation began in 2014 when it became the distributor of the popular Japanese IP, Sonny Angel. Within two years, Sonny Angel accounted for nearly one-third of Pop Mart's revenue.

However, disagreements with the Japanese licensor led Wang Ning to recognize the importance of owning exclusive IP rights. In 2016, Pop Mart secured the exclusive rights to Molly, a doll with a distinctive pout and large blue eyes. Molly became Pop Mart's first proprietary IP, paving the way for a new business model.

Pop Mart began signing promising original designs, acquiring IP rights, and refining designs based on market trends and fan preferences. The company evolved from a retailer to a brand operator with core IP assets and a sophisticated supply chain.

Wang Ning likens Pop Mart's IP-centric approach to that of a record label, finding talented artists, producing their work, and distributing it globally.

Finding the 'Third Option'

Wang Ning emphasizes the importance of respecting time and operations, a principle that has been ingrained in the company culture since its inception. Pop Mart has faced its share of criticism and skepticism over the years. During its IPO, many questioned the company's business model.

In 2022, Pop Mart experienced its first-ever decline in revenue, and its stock price plummeted, leading some to label it a 'bubble mart'.

Wang Ning draws inspiration from the Taoist concept of 'Tao produces one, one produces two, two produces three, three produces all things,' interpreting it as a methodology for overcoming conflict. Instead of getting bogged down in binary oppositions, he suggests seeking a 'third option' that allows for a more expansive approach.

This philosophy has guided Wang Ning's strategic decisions, such as shifting from distribution to self-development and expanding globally when the domestic market became saturated. Pop Mart expanded into Southeast Asia, Europe, and other regions in 2023, aiming to increase sales and brand recognition.

Wang Ning's vision is to transform Pop Mart into a global brand. In 2023, Pop Mart's overseas revenue reached 1.066 billion yuan. During the 2024 annual results presentation, management stated that overseas sales could maintain over 100% growth this year and become the driving force of the group's core business, with confidence that overseas sales will exceed 10 billion.

The Next Blind Box

'Every company, whether it's working on AI or opening a dumpling restaurant, ultimately comes down to the details of daily life, managing people, managing things, and managing money,' Wang Ning stated. Pop Mart is now focused on refining its operations and addressing emerging challenges.

One immediate challenge is supply chain management, with stock shortages and product discontinuations impacting customer satisfaction. Counterfeit products also pose a threat to brand value and the legitimate market. The company also faces criticism for its reliance on blind boxes and the associated risks of gambling-like behavior.

The inflated resale prices of rare Labubu figures have raised concerns about consumer exploitation.

IP dependency and cultural depth are also areas of concern. The success of IPs like Labubu remains largely accidental, and Pop Mart's emotional core and cultural depth pale in comparison to established brands like Disney. As the toy market shifts from rapid expansion to refinement, Pop Mart must focus on optimizing supply, protecting its brand value, and fostering lasting emotional connections with consumers.

Like the enigmatic smile of Labubu, the future holds both challenges and opportunities for Pop Mart.