Summary of Key Points
As the top-tier trendy toy IP of Pop Mart, Labubu went from global sensation within two years (with celebrity endorsements, a 25-fold premium in the secondary market, and half-year revenue of 4.4 billion yuan) to weak growth in 2026 (its revenue share dropping from 34.7% to 26%, with company profits falling short of expectations). This reflects three core issues in the trendy toy industry: the logic behind the rise of the "ugliness economy," the challenges of IP lifecycle management, and the debate over whether trendy toys represent a form of "intelligence tax." The article analyzes the business patterns and consumer behavior in the trendy toy industry through Labubu's rise and fall.
1. Labubu: From Crowds to Slowing Growth – Even Trendy Toys Can’t Escape the Cycle?
How popular was Labubu in 2024? Fans lined up outside stores, and celebrity endorsers like BlackPink’s Lisa and Rihanna wore Labubu, generating 4.4 billion yuan in revenue for Pop Mart. Some limited-edition items were sold for 25 times their original price. However, in 2026, although Labubu still led the company’s revenue, its share had decreased to 26%. The new “Star People” series saw a 580% increase in sales year-on-year. It’s not that no one wanted Labubu anymore, but rather consumers’ interest had waned, indicating a decline in its dominance. Just as even the most popular celebrities don’t have every hit, trendy toys have a short-lived craze. The cycle includes initial scarcity, price speculation by scalpers, and eventual oversaturation, leading to the loss of their appeal.
2. The Rise of the “Ugliness Economy”: It’s About Credibility, Not Genuine Love for Ugliness
Labubu is not an isolated case. The trendy toy market is seeing more items that deviate from traditional cute toys. For example, Fuggler, with its realistic-looking teeth that make it seem like it could crawl out of bed at night, and the 2025 “Mouse Dry” toy, with its awkward design, have become popular despite being inexpensive. Why do these “ugly” toys sell well? AI and mass production can create “beautiful” items, but the mass-produced look is too generic. Consumers prefer items with unique, “ugly” features that make them stand out—like Labubu’s sharp ears and sly smile, which encourage sharing on social media. However, simply imitating such features without originality will only result in short-lived popularity.
3. How Long Can a Trendy Toy IP Survive?
Trendy toys have a short-lived craze, but a successful IP requires sustained effort. Brands like Kaws and Jellycats have remained popular since the late 1990s because they are more than just temporary hits. Successful IPs deliver ongoing value through collaborations, interactive experiences, and strategic partnerships. Pop Mart is taking steps to build a lasting legacy for Labubu, such as opening a theme park in Beijing and collaborating with Sony on a movie. The real challenge is to transform a hit into a sustainable IP that continues to attract customers even after the initial craze subsides.
4. Are Trendy Toys a Form of “Intelligence Tax.”
This question is similar to whether bubble tea is a form of “intelligence tax,” and the answer depends on your perspective:
- Not a tax: If you buy Labubu because you like its design or enjoy displaying it, and the cost is within your budget, it’s a worthwhile investment in emotional value.
- A tax: If you see it as an investment with the hope of profit, you’re at risk. The secondary market price of trendy toys is influenced by scarcity and demand, both of which are unstable. For example, while Labubu’s limited-edition items were once highly sought after, prices have since dropped. Once the brand resumes production, their value diminishes. Trendy toys are meant for enjoyment, not as financial investments.
Conclusion
Labubu’s journey reflects the dynamics of the trendy toy industry: short-lived hits rely on novelty, while successful IPs require long-term management. The “ugliness economy” emphasizes uniqueness and recognition over mere ugliness. When buying trendy toys, focus on the enjoyment they bring, not their potential as investments. The industry is evolving, but the ultimate test is whether the IP can continuously provide value to consumers—whether through entertainment, aesthetic appeal, or cultural significance.