Labubu just went from trophy to trouble. The blind box star that helped fuel the designer toy boom is sliding fast. Resale prices have cracked. Shares of Pop Mart, the key Labubu maker, have slumped hard. A hot collectible is now a market risk, and the fallout is real.
What just happened
I can confirm a sharp reset in the Labubu market. Pop Mart stock has dropped roughly 40 percent in recent sessions. That is a wipeout for momentum investors and holders who came in late. On the ground, reseller quotes have collapsed. Some Labubu figures that fetched about 170,000 won are now offered near 20,000 won. That is not a pullback. That is a break.
Stores that ran lotteries now sit on stock. Online groups that flipped in minutes are taking hours, or not moving at all. The spread between mint items and opened boxes has also narrowed. Liquidity is thin. Confidence is thinner.
A collectible cannot hold value if new supply keeps coming and buyers step back.
How the bubble formed
Labubu rode three forces. First, blind boxes turned buying into a game. Second, tight drops made every launch feel rare, even when volumes were high. Third, fast flipping trained buyers to act now. That playbook works, until it does not.
Pop Mart pushed frequent series and variants. That fed the machine, and drove revenue. It also stacked up releases that competed with one another. When the pool of new collectors slowed, the math broke. Sellers outnumbered buyers, and prices fell.
Resale market whiplash
Secondary markets set the tone for this asset class. When the premium over retail is big, hype rises. When the premium dies, demand evaporates. The move from 170,000 won to 20,000 won on some units is a clear signal. It shows that scarcity was more story than fact. It shows that flippers were a big part of the bid.
Why the reversal hit now
Several pressures hit at once.
- Oversupply after months of rapid releases
- Collector fatigue after repeat designs and similar drops
- Weak discretionary spending in key markets
- Rising caution from resellers as profits shrank
Marketing could not offset these forces. People still like the character. They just will not pay peak prices. That shift kills the carry trade for flippers who relied on instant resale gains. It also exposes business risk at the brand.
Do not confuse rarity with liquidity. You can be rare and still not be sellable at your price.
Market impact and what to watch
This is not just a toy story. It touches earnings, cash flow, and sentiment across the niche culture trade.
For Pop Mart, the hit shows up in two places. First, revenue growth slows when drops do not clear. Second, profit margins shrink when discounting rises. If inventory days increase, cash gets tied up. That can stall new launches and marketing.
Artists and licensors also feel the pinch. Fewer sellouts mean lower royalties. Retail partners may ask for better terms, or cut shelf space. Malls that relied on high foot traffic from drops will see softer lines. That hurts impulse sales in nearby stores.
Investors should track a few simple gauges.
- Sell through rates in the first 72 hours of a new drop
- The gap between retail and average resale, the premium matters
- Inventory levels and markdown cadence, weekly if you can
- Release frequency, too many drops drain demand
If these metrics keep weakening, expect more earnings downgrades. If they stabilize, the stock can base. A reset in release pace would help. So would a clear plan to limit editions and protect core lines.
When a collectible craze cools, the strongest signal is discipline, fewer drops, cleaner themes, tighter edition sizes.
Investment takeaways
Short term, this is a show me story. Chasing a bounce is a gamble. Buying quality after a clear reset is a strategy. The difference is time.
Traders who understand event risk may find quick trades around earnings or guidance updates. Long only investors should watch cash, inventory turns, and any move to repurchase shares. A buyback near the lows would signal confidence. New licensing deals with guaranteed floors would also matter.
For collectors, the rule is simple. Buy what you love at or near retail. Treat the possible premium as a bonus, not a plan. For resellers, manage risk like a store. Cap exposure per drop. Cut losses fast. Rotate into lines with stable floors and smaller runs.
There is also a macro read. The Labubu slump tells us discretionary spend is fragile. When budgets tighten, nonessential fads break first. That message reaches across sneakers, trading cards, and other designer toys. Companies that rely on heat need guardrails, or the cycle will bite them again.
The bottom line
Labubu’s rise was fast, and the fall was faster. The price crash, the stock slide, and the empty lines all point the same way. This is a bubble deflating, not a blip. The winners now will be the teams that slow supply, rebuild trust, and protect value. Everyone else will learn the old lesson, markets reward patience, not hype.
