Pop Mart Stock Falls as China Calls Blind Boxes Addictive

Photo by THE CHINA NOW

Pop Mart, the popular toy company known for its surprise “blind box” collectibles, has seen its stock price tumble after Chinese state media raised concerns about how the toys are being sold. The drop came after the People’s Daily, the official newspaper of the Communist Party, warned that these kinds of toys might be too addictive - especially for kids.

Why China Is Worried

Blind boxes are toys sold in sealed packaging, so buyers don’t know which figure they’ll get. This encourages people to keep buying until they collect rare versions. According to experts quoted in the People’s Daily, this kind of marketing uses psychological tricks that are risky for children, who may not have the self-control to stop.

Last year, China banned selling blind boxes to kids under eight years old. Now, officials may be considering even stricter rules. Although the People’s Daily didn’t mention Pop Mart directly, the company is clearly the biggest name in the blind box business, especially known for its hit Labubu dolls.

According to People’s Daily, this kind of marketing uses psychological tricks that are risky for children, who may not have the self-control to stop.

What Happened to Pop Mart’s Stock

After the article was published, Pop Mart’s shares fell by 8.8% in two days, losing nearly US$3.9 billion (28.8 billion yuan) in value. Still, the company is valued at around US$41 billion (306.4 billion yuan) - more than the companies behind Hello Kitty, Barbie, and Transformers combined.

Adding to the trouble, the resale price of its once-scarce Labubu 3.0 toy has dropped sharply. It used to sell for up to 3,000 yuan (about US$417), but after Pop Mart restocked it online, it became easier to find - and less valuable.

Strong Growth Outside China

Even with the recent news, big banks still see Pop Mart’s future as bright. UBS expects the company’s profit to grow 35% per year over the next two years, thanks to strong demand for its toys and a growing lineup of characters. JPMorgan also gave the company a positive rating, comparing Labubu’s popularity to Hello Kitty.

Pop Mart is expanding quickly outside China too. In the first quarter of this year, its sales doubled at home and jumped 480% in other countries, from Southeast Asia to the Middle East.