Chinese trend-setting enterprise Bubble Mart is facing a cold winter as its flagship doll Labubu sees a sudden drop in popularity. Investment institutions are downgrading their ratings, citing multiple bearish factors that have led to consecutive heavy losses in the stock price. Since reaching its peak in August, the company’s market value has evaporated over a hundred billion Hong Kong dollars.
On September 15th, shares of Beijing Bubble Mart Cultural Creative Co., Ltd. plummeted by 6.43%, closing at 259 Hong Kong dollars, with its total market value falling below 350 billion Hong Kong dollars. Since hitting a historic high of 339.8 Hong Kong dollars on August 26th, the stock price has dropped by 23.78%, resulting in a market value loss of over 1,000 billion Hong Kong dollars.
Investment institutions are wavering in their confidence. Recently, J.P. Morgan downgraded Bubble Mart’s rating from “Overweight” to “Neutral,” citing the company’s lack of clear growth catalysts and unattractive current valuation. This rating adjustment has further exacerbated concerns in the market about its future performance.
Gone are the days of frenzy over purchases. On September 11th, the popular Bubble Mart IP, SKULLPANDA, released its new “Sleepless Theater Series,” but it only saw “10 people lining up,” a stark contrast to the scenes of long queues in the past.
Online sales data also show drastic fluctuations, indicating abnormal trends. Sales of the new blind box product showed a roller coaster trend on the release night: 93,000 units sold at 10:24 p.m., dropping abruptly to 809 units at 11:08 p.m., then rebounding to over 3,000 units. Market analysts speculate that this fluctuation may be due to a high return rate.
Cross-border new products are facing a similar cold reception. The gold jewelry series “popop” released on September 12th failed to replicate the buying frenzy, with ample stock available at the Beijing World Trade Center store and no queues to make purchases.
Second-hand trading platform data confirm the cliff-like decline in the popularity of the IP. Data from the second-hand app “Dewu” shows that the average transaction price of Labubu’s fourth-generation full box has dropped significantly from the initial price of 1,916 yuan to 1,422 yuan, a nearly 26% decrease. Data from “Xianyu” platform paints an even bleaker picture, with the average transaction price in the last seven days plummeting to 104 yuan, and 68% of users expecting prices to continue downward.
Professional scalpers have adjusted their strategies, announcing on social platforms that they will “temporarily pause the acquisition of Labubu series products” while waiting for a signal of market stabilization. Compared to when the fourth-generation mini Labubu was released on August 28th and the full box price skyrocketed to 3,200 yuan, with hidden models reaching nearly a thousand yuan, it has now seen a “slash” in prices.
Renowned economist Pan Helin previously analyzed on 21 Finance Network that the stock prices of trendy companies are highly correlated with market demands for their products, and the current popular IPs contain elements of irrational exuberance. “Prices have self-reinforcing functions, but they also have self-weakening functions. Once they start falling, the decline may not stop.”
Pan Helin emphasizes that every IP has a lifecycle, and the key lies in whether they can continue to produce new blockbuster items. The trendsetting market needs to shift towards diversified value support, where companies must satisfy diverse demands while continuously operating new IP product lines. “Ultimately, companies’ stock prices need to speak through solid performance.”
It is worth noting that despite Bubble Mart’s inclusion in the Hang Seng Index on September 8th, a significant positive development that did not reverse the downward trend, as the stock price plummeted by 7.11%, resulting in a market value loss of 29.545 billion Hong Kong dollars in a single day.
Labubu made its debut in 2015 and gained attention after collaborating with Beijing Bubble Mart Cultural Creative Co., Ltd. in 2019. In April 2024, it gained popularity when BLACKPINK member Lisa was seen with related products. However, this iconic doll is currently experiencing a significant market cooldown, casting a shadow over Bubble Mart’s future development.