Owner of Labubu Lost $4 Billion in Just Two Days — Due to Criticism from China
Kyiv • UNN
Shares of Pop Mart, maker of Labubu toys, fell by 8% after criticism from the Communist Party over "blind boxes," leading to a loss of $4 billion in market value. The company was accused of encouraging repeat purchases through a hidden content mechanism, especially for minors.
Pop Mart shares, the manufacturer of Labubu toys, fell by more than 8% in two days after criticism of blind boxes in the Communist Party newspaper. The company was accused of an "unrestrained consumer approach". This was reported by SCMP, according to UNN.
Details
On Friday, Pop Mart International Group's shares on the Hong Kong stock exchange fell by 3.6% to 239.60 Hong Kong dollars. In two days, the shares fell by 8.8%, losing market value by 30.89 billion Hong Kong dollars (3.93 billion US dollars).
Pop Mart's business model is based on blind boxes and blind cards, which conceal their contents with sealed packaging. This encourages collectors to make frequent and repeated purchases to get the rarest and most desirable toys or cards, where the probability of finding rare editions is estimated at less than 2 percent.
These products are "business traps" designed to use unpredictable rewards to encourage repeat purchases
It is noted that minors are particularly vulnerable, given their still developing self-control and psychological maturity, the newspaper warns, calling for stricter regulation to protect them from such tactics.
In 2023, Chinese authorities issued a directive prohibiting the sale of blind boxes to children under the age of eight to curb their addiction.
Although "People's Daily" did not name Pop Mart, the company is considered the biggest winner of the hype surrounding "blind" (or "unclear") dolls. The company's biggest success is its Labubu dolls, which have captivated the hearts and wallets of collectors from China to Southeast Asia, the Middle East, and beyond.
International success has made Pop Mart one of the leading players in the Hong Kong stock market this year, and investors expect the growth momentum to continue.
Recall
Ukrainian blogger and owner of a floristic business Nastya Skalnytska (known as Nastya Talpa) created a Labubu flower composition for blogger Stasya Makeeva worth about 250 thousand hryvnias.
Earlier, UNN wrote that Labubu — elf-like cute and somewhat ominous toys — have become a new trend. They were created by Hong Kong artist Kasing Lung back in 2015. They are popular due to their unique features - large eyes, fluffy body, sharp teeth, and rabbit ears. Adults use them as a way of self-expression.