Labubu craze dying out? Resale market dip signals end of hype around viral doll
The doll earlier accounted for more than a third of the first-half revenue for Pop Mart, with Labubu sales soaring after several celebrities were seen with it.
The resale prices for the Labubu doll, a collectible plush toy part of Pop Mart's ‘The Monsters’ series, has apparently seen a worldwide drop in popularity since it attained its peak during summer.
The doll had earlier accounted for more than a third of the first-half revenue for Pop Mart, with Labubu sales soaring after several celebrities were seen with it, Reuters reported. These included K-pop group Blackpink member Lisa, singer Rihanna and former soccer player David Beckham.
However, many resale sellers who had ridden the wave of Labubu's success are saying that the days of making money through the doll are past.
“Prices in the Thai resale market are going down really, really, really fast,” Kasidit Teerawiboosin, 22, told Reuters. Teerawiboosin has been buying Pop Mart toys and selling them unopened since early 2024.
While the booming resale market after the toy's success has supported prices of both the toys and the Pop Mart stock, the recent dip in resale prices have raised questions on the longevity of the demand for Labubu, Reuters reported.
According to data from Chinese art toy resale platform Qiandao, the price of Labubu character ‘Luck’, which was launched in April this year, peaked in June when it was above 500 yuan ($70.20) on the secondary market.
However, it has now dropped to around 108 yuan. The prices of other characters in the series have also fallen below the official Pop Mart stores numbers, according to the Reuters report.
Following the recent dip, investors deduced that the fall in resale prices are due to cooling demand, given that Pop Mart's share price was down 25% since August.
However, Pop Mart's revenue grew to as much as 250% in July-September, outpacing the 204.4% growth in the first half of the year, according to a stock exchange filing.
Why the fall in reshare prices?
While many have pointed to a lowering demand as the reason, the analysts and Labubu's parent company have said that the issue lies in supply instead of demand, according to the Reuters report.
The stock is still up 186% year to date, with Pop Mart saying it has increased the supply of plush toys, including Labubus, by 10 times this year. The company said it has produced around 30 million units a month.
Responding to a query regarding the resale value of Labubus, Pop Mart's executive director and co-COO Sid Si drew a reference to concert tickets. “Fans often end up scrambling for overpriced resold concert tickets because venues can't simply add more seats to meet surging demand,” Sid Si told Reuters.
However, the executive director added that there was a “crucial difference” for Pop Mart, saying the company can “proactively increase supply to ease demand pressure.”
Falling resale prices can “potentially” suggest satisfied demand, but also increases supply given resellers likely made up a significant portion of first market sales, Reuters quoted Morningstar analyst Jeff Zhang as saying.
Zhang further said that investors “may also incorporate a higher risk premium for Pop Mart's earnings if revenue growth peaks in this year.”
Further, Morgan Stanley analysts said in a September client note that the prices in second-hand market do not “effectively reflect the true supply and demand situation”, Reuters reported.
They said that new characters such as "Twinkle Twinkle" and the scope for international expansion are important factors for Pop Mart's growth.
