Pop Mart’s surging profits and an inflated secondary market will only last as long as ugly doll fad
If you want to invest in a truly classic bubble, forget artificial intelligence firms and crypto, and instead buy shares in Pop Mart, the company responsible for the Labubu craze. Collecting these so-called “ugly-cute” toy dolls, many of them sold in a “blind box” so that you don’t know which of the characters you are getting until you open it, has become a summer hit, popular with celebrities including Rihanna, Lady Gaga, BTS and David Beckham.
New Labubus cost in the region of £13 but rarities can fetch hundreds or thousands of pounds on the secondary market. There is also a lively demand for fakes (“Lafufu”).
Pop Mart, a Chinese toy maker founded in 2010, last week announced bumper results with a 400% surge in profits in the first half of this year. It is worth nearly $50bn (£36.9bn), more than Lego (estimated at $25bn), Mattel ($6bn) and Hasbro ($11bn) combined.
There are reasons to think the financial fun will soon be over. Fad fatigue is bound to settle in. Pop Mart may not be able to maintain premium pricing as competitors proliferate. And regulators are increasingly tempted to crack down on blind-box consumer products that can be viewed as a form of gambling. When share analysts say the market has “fully factored in exponential growth”, it is time to take your money – and your Labubu – and run.
Photograph by Faga Almeida/UCG/Universal Images Group via Getty Images
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