Labubu Boom: How Pop Mart is Growing Manufacturing Capacity

The Chinese toymaker Pop Mart experienced a significant surge in attention during the summer of 2025, driven by the Labubu craze that captured global consumer interest.

The launch of Labubu 3.0 in June 2025 proved particularly lucrative, adding US$1.6bn to the net worth of Wang Ning, the company's CEO and founder.

These distinctive 'monsters' fuelled rapid retail expansion worldwide, with Labubu-dedicated vending machines appearing in prestigious locations such as Selfridges in London.

The phenomenon reached its peak between June and August 2025, with retailers reporting unprecedented demand.

Now, as Pop Mart pursues further growth through international production expansion, questions are emerging about whether this success represents sustainable momentum or just a passing trend that could soon lose its appeal.

The company's strategic decisions in the coming months will prove critical to maintaining investor confidence and consumer interest.

Expanding production globally

Pop Mart is moving to strengthen its manufacturing footprint beyond its traditional bases in China and Vietnam.

The company operates through partnerships with local manufacturers rather than running its own facilities, and has recently established new production sites in Cambodia, Indonesia and Mexico.

This expansion responds to particularly strong growth in the North American market, where demand for the collectible dolls has soared.

"It's a strategic move to expand and strengthen our supply chain to improve resilience, efficiency and service to our customers," Pop Mart said in a statement released in November 2025.

The expansion addresses challenges the company faced between May and September 2025, when retailers witnessed lengthy queues and resale frenzies as delivery times extended.

Pop Mart was forced to limit stock both online and in physical stores after hitting its monthly production capacity of 10 million units.

Following the August 2025 boom, the company increased its monthly output to 30 million units.

The new production facilities could reduce wait times from factory floor to customer delivery, potentially improving the company's ability to meet demand spikes.

Retail presence requires further development

Beyond manufacturing expansion, Pop Mart is planning to increase its physical retail presence across the US, building on the 60 stores it currently operates.

The company opened its first permanent store in Manila on 15 December 2025, continuing its global retail push.

"The pace of store openings has lagged behind the surge in consumer demand, particularly in the US," says Lina Yan, a consumer analyst at HSBC, in comments published in a December 2025 research note.

This contrasts with Beijing and Shanghai, which each host more than 100 stores.

"Were it to mirror the strategy deployed in Beijing and Shanghai, it could open as many as 200 more stores in the country," Lina explains.

The retail expansion strategy represents a significant investment in physical infrastructure at a time when many retailers are prioritising digital channels.

The company faces the challenge of balancing rapid expansion with maintaining the brand's premium positioning and ensuring each location remains profitable.

Store locations in high-traffic areas command premium rents, requiring sustained sales volumes to justify the investment.

Market concerns mount

Pop Mart produces several character lines beyond Labubu, including SkullPanda, Crybaby and Nyota.

In the final quarter of 2025, these non-Labubu dolls became significant drivers of growth and profit.

The company is preparing to launch new products in February 2026, including toys dedicated to 'the year of the horse' featuring a mix of its popular characters.

This diversification strategy aims to reduce reliance on any single character line.

However, analysts are questioning whether the boom represents sustainable demand or a temporary fad.

Shares in Pop Mart have dropped 40% from their August peak, reflecting concerns about the brand's long-term mainstream appeal.

The second-hand market, which saw significant activity during the summer of 2025, is now experiencing declining resale prices. 

"Labubu doesn't actually have that much of a story behind it, it's just a strange-looking doll," says Chris Pereira, founder of iMpact, in an interview published in January 2026.

"I don't think it's what they were expecting, for it to go so crazily viral. The question is 'what next'?"

Chris warns that Pop Mart must introduce new characters or products rather than relying on continued Labubu momentum.

A major element of the appeal has been the mystery factor, with the brand's main attractions sold in 'blind box' format, where customers receive a surprise with each purchase.

Whether Pop Mart's production expansion and new product lines will prove the company can transcend the Labubu phenomenon remains uncertain.