Pop Mart Plunges as Viral Livestream Sparks Pricing Fury

This article first appeared on GuruFocus.

Pop Mart International (PMRTY) just got hit with another wave of market turbulence. Shares tumbled more than 5.5% on Friday to their lowest level since May, after a viral livestream reignited criticism over its product pricing. The controversy started when a Pop Mart employee questioned the value of a 79-yuan ($11) blindbox phone chain during a live broadcastan offhand remark that spread rapidly across Chinese social media. On Xiaohongshu and Weibo, many users echoed frustrations over what they called overpriced collectibles, while others argued the employee was simply being honest. A company spokesperson said Pop Mart is investigating the incident.

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The backlash comes as sentiment around Pop Mart's flagship Labubu toy line is already cooling. Data from the Chinese trading platform Qiandao showed a 16% drop in average secondary-market prices for a 14-piece Labubu mini set over the past monthsliding below the official retail price of 1,106 yuan. Larger Labubu dolls also recorded single-digit declines. Goldman Sachs analysts suggested that the drop could be tied to Pop Mart's increasing supply and monetization efforts, noting that high-frequency pricing data is beginning to weigh on investor confidence in IP-driven consumer brands.

Investors are now watching whether Pop Mart can sustain its growth as the Labubu craze begins to fade. The stock has fallen roughly 38% since its late-August peak amid profit-taking and doubts about demand durability. Bernstein analysts expect Labubu volumes to peak between 2026 and 2027 and warn that repeating its success with new IPs may be difficult. Morgan Stanley, however, noted that the company's newer character Twinkle Twinkle is emerging as a strong contender in consumer demandthough supply shortages could limit near-term upside.

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