From Tulips to Beanie Babies to Labubu: The anatomy of a crash.

Labubu and PopMart’s US$13 billion crash

The rise of Labubu and PopMart

In 2025, headlines across the financial and cultural press were dominated by one name: Labubu, the quirky rabbit-eared collectible figure that transformed PopMart from a niche toy company into a global powerhouse.

Created by Thai artist Kasing Lung, Labubu was not originally meant to become a mainstream sensation. Its early life belonged to underground art toy communities and designer circles. Yet, when PopMart acquired licensing rights and built a brand narrative around the character, it triggered a cultural explosion.

PopMart engineered scarcity through blind box sales, limited editions, and surprise drops, creating a marketplace driven as much by anticipation as by the product itself. The company added fuel through celebrity endorsements. Blackpink’s Lisa and David Beckham’s family were seen interacting with Labubu merchandise, cementing its desirability. What had begun as an indie art figure now became an aspirational lifestyle symbol.

From 2023 to 2024, PopMart’s stock surged more than 180 percent, pushing its market capitalisation close to US$20 billion. Analysts compared its cultural impact to Supreme in streetwear, with collectors queuing overnight outside PopMart stores and resale markets flipping figures for five to ten times retail prices. At its height, Labubu accounted for more than 30 percent of PopMart’s merchandise revenue, making it not just a product but the engine of the company’s growth.

Trading platforms pexels tima miroshnichenko 7567443.jpg? nc cat=111&ccb=1 7& nc sid=6ee11a& nc ohc=QwTDklpLC6wQ7kNvgEmg1GS& nc zt=23& nc ht=scontent.fpos1 1

TradingView — Track All Markets

Where the world charts, chats and trades markets. We’re a supercharged super-charting platform and social network for traders and investors. Free to sign up.

From cult collectible to cultural currency

Labubu’s success was not based on the toy’s physical design alone. PopMart marketed Labubu as cultural capital. Owning one was a form of identity signalling among Gen Z and millennials. In online communities like TikTok and Xiaohongshu, the “Which Labubu are you?” trend took off, blending social media virality with personal branding.

By framing Labubu not as a toy but as a lifestyle accessory, PopMart blurred the line between collectibles, fashion, and art. Collaborations with streetwear brands and appearances at red-carpet events elevated Labubu into a luxury-adjacent category. For a younger generation that values uniqueness and social visibility, the figure represented status in the way designer handbags once did for older demographics.

This cultural positioning enabled PopMart to spread internationally, with flagship stores opening in Europe, North America, and Southeast Asia. It seemed unstoppable. Yet the very forces that drove Labubu’s meteoric rise also created the conditions for its collapse.

The fragile foundation of PopMart

Despite the hype, PopMart built its empire on a foundation that proved fragile. Three key weaknesses stood out:

1. No long-term storytelling: Unlike Disney or Lego, PopMart failed to create a rich narrative around its characters. Labubu had no deep lore or evolving storyline that could sustain long-term emotional attachment.

2. Over-reliance on a single IP: While other PopMart characters such as Molly, Paky, and Dimoo existed, none captured cultural attention like Labubu. The brand became dangerously dependent on one star.

3. Hype-driven growth without diversification: The business model centred on novelty drops and scarcity marketing. When consumer excitement began to fade, there was no consistent foundation to fall back on.

By mid-2025, the cracks became impossible to ignore. The resale market, which had once seen $100 Labubu figures sell for $500 or more, collapsed as prices fell 50 to 75 percent. Collector fatigue set in. Investors who had once valued PopMart at 23 times earnings began selling off shares, aware that the valuation far exceeded the industry’s standard 15 times multiple. Within months, PopMart lost $13 billion in market value.

Parallels with Beanie Babies

The collapse of Labubu and PopMart is not without precedent. In the 1990s, Beanie Babies swept through the US and global markets with a similar formula: limited releases, retirement of characters to create scarcity, and mass cultural adoption. Ty Inc, the company behind Beanie Babies, saw people hoarding plush toys not only for sentimental reasons but also as speculative investments.

Like Labubu, Beanie Babies benefited from a thriving secondary market where rare plushies were sold for multiples of their retail value. At the peak of the craze, a Princess Diana commemorative bear sold for thousands of dollars. Collectors treated the toys as assets rather than playthings.

However, when consumer enthusiasm waned and supply outpaced demand, prices plummeted. Many investors who had stored entire basements full of Beanie Babies were left with near-worthless inventory. The speculative bubble burst, leaving behind a cautionary tale about overvaluing cultural fads without long-term foundations.

PopMart’s Labubu followed the same trajectory. Both relied on artificial scarcity, rapid consumer hype, and speculative resale value. And both collapsed once the novelty factor wore thin.

Lessons from the Dutch Tulip craze

Going further back in history, the Labubu phenomenon can be compared to the Tulip Mania of 17th-century Holland. Tulip bulbs became so fashionable among the wealthy that their prices skyrocketed to irrational levels. At the peak, a single tulip bulb could be worth as much as a house.

The similarities with Labubu are striking. Tulips, like collectible toys, had no intrinsic value beyond beauty and rarity. Prices were sustained not by the utility of the product but by speculative trading and social signalling. Owning rare tulips was a form of status expression among Dutch elites, much as owning exclusive Labubu editions was among digital-age collectors.

When the market corrected itself, tulip bulb prices crashed, leaving many financially ruined. Tulip Mania is often cited as one of the first recorded speculative bubbles in history. The Labubu collapse, centuries later, follows the same script in a digital and globalised economy.

TradingView — Track All Markets

Where the world charts, chats, and trades markets. We’re a supercharged super-charting platform and social network for traders and investors. Free to sign up.

The financial mechanics of the crash

The fiscal side of the Labubu collapse reveals deeper lessons for investors. PopMart’s valuation soared to levels that assumed indefinite growth. Yet, growth was tied almost exclusively to a single product line. Once demand faltered, earnings expectations evaporated.

The company’s reliance on the resale economy further exposed it to volatility. As long as collectors could flip figures at huge mark-ups, demand remained artificially inflated. But when secondary market prices fell, consumer urgency disappeared. Without speculative profit, Labubu lost much of its appeal as an “investment collectible”.

For shareholders, this meant the market corrected quickly and harshly. PopMart’s overvalued stock tumbled as institutional investors abandoned it. In this way, PopMart’s downfall is reminiscent of other modern hype-driven collapses, from cryptocurrency tokens with no utility to meme stocks sustained only by online enthusiasm.

Cultural lessons from the Labubu bubble

Labubu’s story is not merely financial. It reflects a generational shift in consumer culture. Younger audiences are more attuned to identity expression through consumption, and products like Labubu fulfilled that desire. Yet this same volatility also means brand loyalties are less stable.

The rise and fall of Labubu shows that hype alone cannot sustain a cultural movement. PopMart failed to anchor its success in deeper storytelling, diversified intellectual property, or intergenerational appeal. Unlike Marvel, which can rotate superheroes, or Lego, which continually evolves through themes and partnerships, PopMart remained bound to a single character with limited narrative depth.

For marketers, the cautionary tale is clear. Scarcity and celebrity can ignite demand, but only narrative richness and product diversification create resilience. Without them, even billion-dollar brands can collapse overnight.

Comparing the three bubbles

Tulip mania: Driven by novelty and elite status signalling. Collapsed when speculative prices became unsustainable.

Beanie Babies: Driven by artificial scarcity and secondary market speculation. Collapsed when collectors realised intrinsic value was limited.

Labubu: Driven by hype culture, celebrity endorsement, and digital virality. Collapsed when collector fatigue and overvaluation eroded consumer and investor confidence.

All three demonstrate the same economic principle: speculative bubbles form when cultural products are treated as assets rather than experiences. Once speculation fades, the market corrects rapidly.

Trezor Safe 5

Ultimate convenience with a vibrant color touchscreen & confirmation haptic feedback. Experience crypto security on an entirely new level.

Enhanced usability with a 1.54” touchscreen
Secure Element, PIN, passphrase protected
Crypto management with the Trezor Suite app

What happens next for PopMart?

The question now is whether PopMart can recover. Some analysts argue that diversification into new IPs and narrative-driven franchises could rescue the brand. Others believe the collapse has irreparably damaged consumer trust.

What is certain is that Labubu, once the crown jewel of PopMart, will be studied in business schools as a modern case of cultural hype turned financial disaster. Its story will sit alongside tulips and Beanie Babies as examples of how consumer psychology, scarcity marketing, and speculative finance can combine to create and destroy fortunes.

Conclusion

The Labubu phenomenon illustrates the enduring cycle of speculative bubbles. From tulip bulbs in 17th-century Holland to Beanie Babies in the 1990s and Labubu in the 2020s, the mechanics remain the same. Scarcity fuels hype, hype fuels speculative value, and when consumer enthusiasm fades, collapse follows.

PopMart’s $13 billion crash underscores the importance of building brands on more than novelty. Storytelling, diversification, and emotional connection are what create resilience. Without them, even the most beloved cultural icons can fall from grace with astonishing speed.

For collectors, investors, and brand strategists, the lesson is clear. Hype can generate explosive short-term gains, but only depth sustains long-term success. Labubu’s rise and fall is not simply a toy story; it is a modern cautionary tale of economics, culture, and the fragility of speculative value.

___________________