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Pop Mart's Blind Box Buzz Faces Government Scrutiny

On June 20, China’s state-run People’s Daily called for tighter regulations on the sale of “blind box” toys to children under eight. The editorial, which didn’t directly name Pop Mart, criticized companies for exploiting kids’ curiosity with mystery-packaged toys and trading cards, urging stricter age verification and parental consent for online purchases.

The backlash targeted the core of Pop Mart’s business model — selling collectible figurines in sealed boxes where buyers don’t know what’s inside until they open it. While the criticism echoed past crackdowns on video game addiction among minors, analysts argue Pop Mart isn’t in the crosshairs the way it might appear.

Stock Drop Followed by Recovery

After the June 20 editorial, Pop Mart’s stock plummeted by 12.1% — its sharpest weekly decline since late 2023. The drop briefly interrupted a monumental rally that saw shares soar more than 600% over the previous 12 months. Since then, shares have recovered and continue to hover near all-time highs.

This market resilience stems from investor confidence in the brand’s consumer base. Gen Zers and millennials, not young children, make up the lion’s share of Pop Mart’s buyers — a demographic with stronger purchasing power and less exposure to regulatory threats.

Analysts Downplay Regulatory Risks

Alfredo Montufar-Helu, senior advisor at The Conference Board’s China Center, said the regulatory environment in China can deliver shocks, but Pop Mart’s core audience shields it from the worst of it.

“Pop Mart’s not a toy company for kids — it’s a collectible culture brand for young adults,” he said.

Jeff Zhang, equity analyst at Morningstar, echoed that sentiment, noting that while smaller domestic players catering to children may suffer, Pop Mart’s adult-focused positioning and overseas push insulate it from major fallout.

Global Expansion Cushions Local Risks

Pop Mart’s diversification strategy is paying off. In 2024, 61% of revenue came from mainland China, down from 80% just a few years ago. The remainder comes from Southeast Asia, East Asia, Hong Kong, Macau, Taiwan — and increasingly, North America.

Sales in the U.S. alone surged by over 550% in 2023 compared to the previous year, with the company now operating 90 physical stores and vending machines across the country. HSBC forecasts overseas revenue will more than double in 2025 to 14 billion yuan ($1.95 billion), driven by the April release of Labubu 3.0. That would make up over half of total projected sales, compared to 39% in 2024.

In 2023, Pop Mart’s total revenue doubled to 13.04 billion yuan, while profits nearly tripled, underscoring its momentum despite policy concerns at home.

The Dopamine Economy: Why Collectors Keep Coming Back

Pop Mart’s rapid rise reflects a broader trend dubbed the “dopamine economy,” where consumers chase affordable thrills and emotional highs. The brand’s collectibles, priced from 59 yuan to 5,999 yuan, offer an experience of exclusivity and surprise — even more so with ultra-rare pieces fetching six-figure sums in resale markets.

Clinical psychologist Chris Wong explained that blind box buyers get a neurological reward. “It’s the anticipation, the surprise, and the delight that people get when they open a box,” he said. Social media further intensifies this cycle, as users post their ‘unboxings,’ encouraging others to join in for the same emotional reward.

Ongoing Challenges: Scalping, Counterfeits, and Production Strains

Still, Pop Mart isn’t without hurdles. Surging demand has exposed operational weak spots. In recent months, the company issued a public apology after logistical bottlenecks delayed deliveries for weeks. Consumers took to social media to vent frustration.

Scalping and counterfeits present longer-term threats. According to Chinese customs, over 1 million fake Labubu figures were seized in the first half of 2025 at Ningbo Port alone, pointing to persistent IP protection issues despite stepped-up enforcement.

There’s also the issue of sustaining relevance. “IP fatigue is real,” said Morningstar’s Jeff Zhang. “Today’s viral figure may not be popular next year.”

Pop Mart’s Ambition to Be ‘China’s Disney’

To future-proof its business, Pop Mart is betting big on brand expansion. The company has launched a film studio, rolled out international pop-ups, and even opened its first theme park. Founder Wang Ning has openly expressed his dream of making Pop Mart “China’s Disney.”

But that leap won’t be easy. According to retail consultant Echo Gong, animation and theme park operations require entirely different skill sets and capital intensiveness. “Storytelling is key. It’s no longer about selling toys — it’s about selling a universe,” she said.

Final Thoughts

Beijing’s criticism of blind box marketing practices may rattle local competitors, but Pop Mart’s focus on adult consumers, aggressive international expansion, and emotional brand appeal keep it in a strong position. Its challenges — from delivery issues to counterfeits — are real, but manageable.

As regulatory tides shift and consumption trends evolve, Pop Mart's future will likely depend on its ability to adapt not just in China, but across a global stage where collectors continue chasing dopamine through every sealed box.