How Pop Mart’s Labubu Turned Blind Boxes Into a $1.8 Billion Business

Chinese retailer Pop Mart has mastered the art of the blind box, creating a global phenomenon with its Labubu designer toys. This business model has driven explosive revenue growth and a fervent collector culture. Here’s a look at the economics behind its success and the challenges ahead.

The Blind Box Craze

Pop Mart’s new product drops, particularly for its Labubu line, often sell out within minutes. The core of its strategy is the blind box—a package containing a mystery figurine. Customers purchase without knowing which specific character they will get, fueling a sense of anticipation and excitement that has proven highly addictive.

This model isn't entirely new, but Pop Mart has refined it. Each series typically contains a set of standard figures and a much rarer "secret" variant, with odds as low as 1 in 72. This mechanic taps into a deep-seated human desire to complete a set, encouraging repeat purchases.

From Retail Store to Global Phenomenon

Founded 15 years ago by entrepreneur Wang Ning as a variety goods store, Pop Mart found its breakout strategy by pivoting to designer blind boxes. The 2016 release of the Molly Zodiac series, designed by Hong Kong artist Kenny Wong, marked a turning point.

Today, the company operates over 500 stores and 2,000 vending machines worldwide. While it licenses some IP like Disney and Marvel, over 85% of its 2024 revenue came from its own exclusive IP developed in-house with artists.

The Power of Exclusive IP and Artist Collaboration

A key driver of Pop Mart's growth is its focus on developing unique intellectual property. The company actively seeks out and collaborates with artists to create characters that resonate with its target audience: the adult "kidult" Gen Z collector.

Its most successful IP is Labubu, part of "The Monsters" line by Hong Kong artist Kasing Lung. Revenue from this line grew 726% year-over-year. The company is also localizing its offerings, collaborating with Western artists like Libby Frame, whose "Peach Riot" series became a top seller in North America.

Aggressive Global Expansion

While rooted in China, Pop Mart is rapidly expanding internationally. Sales outside of China more than tripled in 2024, now accounting for nearly 40% of total revenue, up from 17% in 2023.

The company plans to open more than 20 new stores in the U.S. by the end of 2025, nearly doubling its footprint. Its retail stores are designed as experiential hubs, fostering a community for collectors and driving foot traffic.

Risks and Challenges: Regulation and Diversification

The blind box model draws comparisons to gambling due to its psychological hooks. This has attracted regulatory scrutiny. China has banned the sale of blind boxes to children under eight, and Singapore has proposed capping the value of mystery boxes.

Pop Mart emphasizes its products are for adult collectors, not children. To ensure longevity beyond the potential blind box fad, the company is diversifying its product lines into plush toys, accessories, and even exploring digital content and theme park experiences to deepen engagement with its characters.

The Secondary Market and Collector Culture

The scarcity model has spawned a thriving secondary market where rare figures can sell for significant markups. This secondary economy reinforces the brand's value and desirability. Social media unboxings have been crucial for marketing, creating organic, viral content that fuels demand.

The Road Ahead

Pop Mart's future growth hinges on its ability to continually develop compelling new IP, expand its global retail presence, and diversify its revenue streams beyond blind box figurines. While facing potential regulatory headwinds and an uncertain trade environment, the company's deep understanding of collector psychology and community building positions it for continued, though perhaps more measured, growth.