The toy industry is witnessing a dramatic shift as Pop Mart, the Chinese company behind the viral Labubu dolls, has surpassed traditional toy giants like Mattel and its iconic doll Barbie, in both market valuation and growth momentum, writes eToro analyst for Romania, Bogdan Maioreanu.
This transformation reflects deeper changes in consumer behavior, driven by social media platforms and a new generation of collectors who value novelty over nostalgia.
Pop Mart began as a simple gadget shop but has evolved into a global platform for emotional consumption. The company’s success stems from its blind box strategy, where sealed packages reveal their contents only after purchase. This model, combined with engaging characters and community building, taps into its fans’ desires for reward, surprise, and social connection.
And this is reflected in the company’s financial performance, which for the half year 2025 was spectacular. It is a different model than the one used by Mattel that relies on established brands, Barbie, Hot Wheels, Fisher-Price, and American Girl, traditional retail, story-telling as it adapts those IPs for movies and cartoons, licensed merchandise, and collaborations with other entertainment companies.
The Labubu character, part of Pop Mart’s “The Monsters” franchise, the work of Hong Kong artist Kasing Lung, has emerged as the company’s most significant revenue driver. In the first half of 2025, “The Monsters” series generated 4.81 billion yuan ($670 million) in revenue, representing 34.7% of Pop Mart’s total revenue.
This marks a staggering 668% increase compared to the same period in 2024. To put this in perspective, Labubu’s revenue in just six months of 2025 exceeded sales of iconic toy brands like Barbie ($632 million during the same period for the dolls segment). The character has achieved what Pop Mart describes as “IP prominence” and is recognized as “one of the company’s most sought-after IPs in the first half of 2025”.
Labubu’s impact is very well illustrated in Pop Mart’s plush toy segment. This category experienced explosive growth of 1,276% year-over-year in the first half of 2025, reaching 6.14 billion yuan (over $850 million) and accounting for 44% of total turnover. This represents a massive shift from just 9.8% of revenue in June 2024. The plush toy segment’s transformation has been entirely driven by Labubu products, particularly the viral keychain versions that became popular fashion accessories for celebrities like Rihanna, Kim Kardashian, and Lisa from the K-pop group Blackpink, but also Paris Hilton, RM and V from K-Pop band BTS, Lizzo, and even David Beckham. These small, “ugly-cute” plush keychains introduced in late 2023 became the gateway product that propelled Pop Mart’s international expansion and are now entering the high-fashion realm, frequently seen attached to high-end bags. Journalists have widely credited K-pop star Lisa with kicking off the Labubu trend in mid-April of 2024, when an informal photo of her happily cuddling a freshly unboxed Labubu appeared on her Instagram story.
The viral success of Labubu did not come without controversy. In May, Pop Mart suspended all in-store sales of “The Monsters” plush toys across the United Kingdom due to chaotic scenes of queueing, crowd surges and reported fights. Also in the UK, consumer regulators have warned that fake Labubu dolls could pose a choking hazard for young children have flooded the UK market. While the real dolls sell for 20 to 30 euros in a blind, “surprise” box, some of the dolls have become collectible investments, selling for as much as $10,585.
In stark contrast, Mattel has faced significant headwinds. The company’s second quarter 2025 revenue declined 6% to $1.019 billion, with particularly weak performance in the dolls category. Barbie sales dropped 19% in the latest quarter, generating $335 million in revenue. Mattel’s market capitalization currently stands at approximately $5.78 billion, dwarfed by Pop Mart’s market value of $53.70 billion as of August 2025. Part of Pop Mart’s success can be attributed to their ability to also attract adult buyers, while Mattel’s audience is primarily children, giving Pop Mart a broader customer base who have more money to spend.
While Pop Mart is enjoying its success, some analysts express concerns about the sustainability of trend-driven businesses. The company’s reliance on viral social media marketing and celebrity endorsements creates both opportunities and vulnerabilities. The risks are clear, with over a third of revenues depending on Labubu, it is classic textbook concentration: if the hype dies down, the impact is immediate. Pop Mart’s model also faces potential regulatory challenges, particularly regarding blind box sales to minors. Chinese authorities have already called for tighter regulations on such products marketed to children under eight. And we have seen this in the video-game industry, where several countries have investigated or implemented regulations regarding loot boxes, with some declaring them illegal under gambling laws. Additionally, the company must navigate the challenge of maintaining consumer interest beyond the initial viral phase while expanding its intellectual property portfolio.
The contrast between Pop Mart and Mattel illustrates broader changes in global consumer culture. Pop Mart’s success represents a fundamental change in how toys are marketed, sold, and consumed. The company’s model combines physical products with digital-age marketing strategies, creating a new type of collectible that caters to kids and adults alike. Social media platforms have fundamentally changed how consumer preferences emerge and spread globally. While Facebook transformed into a landscape of advertising and algorithmic bubbles, the real game-changer has been TikTok, which has accelerated global consumption patterns. A single viral video can now disrupt entire supply chains, trigger price surges, and upend market forecasts, as we’ve seen with matcha tea, Dubai chocolate, and now with Labubu dolls.
Whether Pop Mart’s model represents a permanent shift or a temporary disruption of the toy industry remains to be seen. The current data suggests that the traditional toy industry must adapt quickly to remain relevant in an era where viral marketing and social media influence can reshape entire markets virtually overnight.
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