Pop Mart Slumps 8%, and Bernstein’s Earlier Warning Suddenly Looks Timely

Pop Mart shares dropped more than 8% on December 8, as renewed investor concerns about the company’s growth trajectory resurfaced. The selloff has prompted markets to revisit a Bernstein report published weeks earlier on November 11, which offered one of the most comprehensive bearish assessments of the company this year. Although the note is not new, the latest price move has brought its core arguments back into focus.

Bernstein maintains an "Underperform" rating on Pop Mart, arguing that the market continues to overestimate the strength and stickiness of its user base. Despite Pop Mart’s reported 59 million members, Bernstein’s proprietary survey of 850 consumers suggests that headline traffic significantly overstates the depth of true demand. The analysts warn that user retention is weaker than implied, with the business still heavily reliant on short-lived trend cycles rather than durable, collector-driven engagement.

At the time of the report’s publication, Pop Mart traded near HK$218.8 versus Bernstein’s HK$225 target—already signaling limited upside. The firm argued that the current valuation left “little room for error,” especially given the fragility of the consumer base and the lack of structural momentum needed to support long-term compounding growth.

Surface-Level Engagement

A central theme of the Bernstein report is the “shallow” nature of Pop Mart’s consumer participation. Although the demographic profile appears attractive—92% aged 18–44 and 61% female—the behavioral data points to weak commitment.
The survey found:

• 68% of users are casual or impulse buyers, motivated primarily by aesthetics.
• Only 6% qualify as dedicated collectors (owning 20+ items or systematically completing series).
• 60% own fewer than five items; 69% spend under RMB 500 (US$69) per year.
• Only 17% purchase monthly.

Bernstein concludes that for most consumers Pop Mart remains an occasional discretionary purchase rather than a recurring hobby—posing challenges for retention and revenue consistency.

The “Labubu” Dependency

The report also highlights concentration risk, noting that recent growth has been disproportionately driven by a single IP: Labubu.

• Labubu accounts for 38% of new customer acquisition.
• Traffic linked to the character is four times higher than the next-best IP.
• 29% of surveyed users buy only Labubu and show no interest in other lines.
• Cross-IP conversion remains weak, suggesting low brand-level loyalty.

Bernstein warns that if Labubu’s popularity fades, Pop Mart currently lacks an equally powerful successor IP to absorb the shock.

Rising Churn and Model Fatigue

Forward-looking indicators also appear soft.
Among surveyed consumers:

• 13% plan to stop purchasing within 12 months.
• Another 26% expect to reduce spending.

The top drivers are thematic rather than economic—“fading novelty,” “loss of interest in IP,” and “blind box fatigue”—which together account for 50% of churn reasons. While 65% still view blind boxes positively, 47% describe the uncertainty as “frustrating,” indicating that a large share merely tolerates the mechanism.

Outlook

With the recent share price slump bringing past concerns back to the forefront, Bernstein reiterates that Pop Mart must break what it calls the “dual shackles” of shallow user engagement and single-IP dependency. The firm argues that sustainable recovery depends on (1) growing the density of the 6% core collector segment and (2) developing a second blockbuster IP. However, Bernstein remains cautious on the likelihood of a near-term turnaround.