China state media warning on blind-box toys sends Labubu maker Pop Mart shares tumbling

Hong Kong – Pop Mart International Group shares dropped in Hong Kong on June 20 after a Chinese state media commentary called for stricter regulation of blind-box toys and trading cards, stoking concern over the company’s wildly popular Labubu dolls’ business.

While the commentary did not call out Pop Mart by name, it spooked traders who have propelled its stock to a nearly 170 per cent gain in 2025 amid the craze for its toothy monster dolls. Pop Mart often sells its dolls inside a blind box, which means the buyer does not know what specific character is inside. 

Shares of the Beijing-based toymaker, which has a market value of about US$40 billion (S$51.5 billion), dropped as much as 6.6 per cent after tumbling 5.3 per cent on June 19. Bloks Group, which sells similar products, fell as much as 9.3 per cent.

China should further refine regulations for “blind cards” and “mystery boxes” as some of the current business models easily induce minors to become addicted to purchasing these products, according to a feature story carried on the 19th page of the People’s Daily, the flagship newspaper of the Chinese Communist Party, citing legal experts. 

The commentary has weighed on investor sentiment, flashing some overheating signs in the business, said Mr Steven Leung, an executive director at UOB Kay Hian Hong Kong. “Still, it’s a mild reminder as it didn’t come directly from a government official.”

At traditional Pop Mart stores, the blind boxes generally sell for 69 yuan (S$12.33) and up, but consumers have shown a willingness to shell out much more for limited editions.

Last week, a Beijing auction house

sold a human-size Labubu figure

for 1.08 million yuan, setting a record and marking the toy’s switch from craze to collectible.

In China, the government prohibits sales of blind boxes to children under age eight due to concern over potential addiction. Before the authorities imposed such guidelines in 2023, regulatory risk was a key concern among investors. 

But even with the slump this week, Pop Mart shares are still the best performer in the MSCI China Index, as consumer fervour for its toys has turned it into one of the hottest Chinese growth companies. Wall Street analysts have been increasing their price targets for the firm, citing the growing influence of its intellectual properties.

Celebrities including Rihanna and Blackpink’s Lisa have been spotted carrying Pop Mart’s toys, making it one of China’s most notable consumer brands to gain popularity globally. Policymakers in Beijing have sought to encourage such success stories, which may temper expectations for a more disruptive crackdown.

Kayou, a Chinese maker of trading cards, pushed back its plan for an initial public offering in Hong Kong in 2024 after negative publicity surrounding the industry from Chinese state media. It refiled for the listing in April. BLOOMBERG