Consumer goods Dissecting the Labubu investment mania

03 October 2025

Take a stroll down Orchard Road and it’s hard to not notice the crowds outside Pop Mart stores at ION Orchard and 313 Somerset, with shoppers lining up for the latest (mini) Labubu blind boxes. But the excitement around Labubu has grown into more than just a shopping fad. Since early 2024, Pop Mart’s stock price has skyrocketed by 1,115%, lifting its market value higher than well-known names like Estée Lauder, Garmin, and Prada.1

 

Some naysayers believe Labubu to be just another overcrowded short-term trade while others believe it is here to stay. So how can investors actually tell whether a trend is temporary or structural?

In this article, we will cover:

 

For technical terms, please refer to our Glossary

What is Labubu and the IP product industry?

 

Labubu is a quirky, gremlin-like collectible figure from Pop Mart’s “The Monsters” series. It was initially launched as a vinyl toy sold in blind boxes and quickly gained cult status due to its unique design and viral popularity — especially after endorsements from celebrities like Blackpink’s Lisa.

 

Even though Labubu is a recent phenomenon, the concept of how an intellectual property (IP) can be strategically developed, protected and commercialised into a global business isn’t. For every Labubu, there’s been Frozen (2010s), Harry Potter (2000s) and Pokémon (1990s).

For companies, a successful IP can be a powerful revenue generator. The Walt Disney Company, for example, is one of the most successful companies in the world when it comes to making money out of their IPs. In 2024, it’s IP-intensive divisions (experiences and entertainment) generated over US$75 billion (S$96.4 billion) in revenue.2 That is equivalent to 83% of the Singapore government’s total operating revenue for fiscal year 2024.3

Did you know?

Capital Group founder Jonathan Bell Lovelace helped Roy and Walt Disney finance “Snow White and the Seven Dwarfs” and “Fantasia” during the 1930s.

Learn more about Capital Group's history.

How long do IP cycles typically last?

The fickle nature of consumers and their insatiable urge for the next “in” thing have always been one of the key arguments against investing in companies related to viral trends. To help investors understand the investment dynamics of IP companies, it is important to understand the different stages and duration of a typical IP cycle:

 

  • Initial phase: surging popularity causes supply shortages and elevates secondary market prices.
  • Growth phase: expanding popularity draws additional fans, with increased supply leading to normalisation of secondary market prices.
  • Monetisation phase: sales may continue to rise despite peak popularity levels, as heightened supply meets previously unmet demand.
  • Deterioration phase: sales begin to decline due to market saturation and waning interest in the IP.

 

Calibrating the duration of a cycle can be complex due to numerous external and internal factors that can influence outcomes. These variables include local consumer preferences, IP type, distribution methods, marketing budgets, target audience, endorsements, competition, and other elements. Even when all processes are executed properly, it is still anyone’s guess whether an IP can truly succeed.

 

An analysis of Google Trends data indicates that the lifecycle for Disney’s Frozen franchise lasted about three years, aligning with the release dates of Frozen in 2013 and Frozen 2 in 2019 .

Variance, however, can be significant depending on the franchise and the metrics used. From a sales perspective, Bandai’s Gundam IP remains in the monetisation phase, despite making its debut in 1979 with the anime Mobile Suit Gundam. Gundam remains one of Bandai’s most successful IPs with sales rising at a compound annual growth rate (CAGR) of 14% over the past five years.4

 

This continued success is attributed to diversified monetisation strategies and sustained consumer engagement through the introduction of new models, games, and animated content. Its 2024 animated film Mobile Suit Gundam SEED FREEDOM was the highest-grossing Gundam movie of all-time, showing that regular content development and strategic monetisation can significantly prolong the lifecycle of an IP.5

 

Can IP companies overcome business cyclicality?

 

Although Gundam demonstrates that it is possible for an IP to remain popular over the long-term, there are also instances where companies reliant on a single IP encounter considerable difficulties when the popularity of that asset fades.

Case study: Playmates Toys

 

Playmates, best known for producing Teenage Mutant Ninja Turtle (TMNT) figurines, illustrates the risk of heavy reliance on a single IP. The company has held the license to produce TMNT figurines since 1985 and saw its shares soar five-fold in 2013-2014 due to a popular TMNT cartoon on Nickelodeon. After the peak of TMNT's popularity in the early 2010s, subsequent reboots and toy lines failed to replicate earlier success, leading to declining sales. The company’s shares have since fallen back to pre-2013 levels .

That is why companies with diverse IP portfolios are typically more resilient to earnings and share price fluctuations. If one IP underperforms, other assets can help balance sales. Other tactics that IP companies use to manage earnings volatility include:

 

  • Expand IP revenue streams: Offering a broad range of product categories is an effective way to boost an IP’s presence and pull in extra income. Licensing opens the door to more income avenues without needing a ton of internal resources. Lots of IP companies do this; pay attention to the different Disney and Hello Kitty accessories the next time you are in a Miniso store.
  • Enhance IP value through multimedia content: While Labubu blind boxes may be the craze now, offering a variety of entertainment formats, including film, animation, gaming and even theme parks remain essential for sustaining IP popularity and customer engagement. This is an area Pop Mart is actively pursuing with Pop Land (a theme park in Beijing launched in 2023) and the expected release of a Labubu TV series as well as feature film. 6
  • Acquire high-quality IPs: Since consumer sentiment and various external trends affect IP success, there is no surefire way to create a hit. Regularly updating and diversifying IPs helps manage risk. Companies can also acquire well-known IPs to tap into existing fan bases, like Disney buying Marvel Entertainment in 2009.

 

The bottom line

 

Ultimately, the ability of IP companies to withstand the ebb and flow of consumer interest lies in their strategic approach to managing and evolving their assets. Those that diversify their IP portfolios, expand into new product categories, leverage multimedia platforms, and pursue acquisitions are better equipped to navigate periods of volatility and capture sustained growth.

 

For investors, this means that companies employing these adaptive strategies generally offer more stable earnings and share price performance, making them more attractive long-term holdings. While singular, iconic IPs can deliver exceptional results, long-term resilience mostly depends on adaptability and a willingness to innovate across multiple fronts. By embracing these strategies, IP companies position themselves not only to survive, but to thrive amid the ever-changing currents of the marketplace — giving investors greater confidence in the durability of their investments.

1. Data as at 31 July 2025. Based on market capitalisation in local currency. Source: Bloomberg
2. Based on the Walt Disney Company’s fiscal year 2024 results. The company’s fiscal year runs from 1 October to 30 September the following year Source: Statista
3. Data as at 18 February 2025. Analysis of Revenue and Expenditure FY 2025. Source: The Ministry of Finance of Singapore
4. Based on Bandai Namco Holdings’ fiscal year 2020 to 2025 results. The company’s fiscal year runs from 1 April to 31 March the following year. Source: Bandai Namco Holdings.
5. Data as at 26 September 2024. Source: Bandai Namco Holdings.
6. Data as at 22 June 2025. Source: CGTN
 

Continue reading

What is a 60/40 portfolio?

Explore now

Do tech companies pay dividends?

Explore now

Guide to Multi-Asset Funds

Explore now

 Back to Education Hub

 

Risk factors you should consider before investing:

 

  • This material is not intended to provide investment advice or be considered a personal recommendation.
  • The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
  • Past results are not a guarantee of future results.

 

Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
 
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
 
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.