NEW YORK, Nov 16 — The frenzy surrounding Labubu toys is showing striking similarities to the boom-and-bust cycle that led to the collapse of Beanie Babies in the 1990s, a warning sign for investors in Pop Mart International, according to a bearish analyst.

Melinda Hu, a senior research analyst at Bernstein, argues that the hype over the sharp-fanged monster dolls is nearing its peak, and with doubts about the company’s next sales driver, its shares have limited upside, Bloomberg reported. 

Hu is currently the only analyst out of 46 to have a “sell” rating on the company.

“The scarcity, the hunt, the dopamine hit and the secondary market” fuelling Labubu’s popularity all resemble the speculative cycle of Beanie Babies, she said.

The core of the bearish argument is Pop Mart’s growing over-reliance on a single intellectual property (IP). 

The “Monsters” product series, which includes Labubu, accounted for 35 per cent of total revenue in the first half of the year, up from just 14 per cent a year earlier.

“The bull–bear debate boils down to one question: can the company break free from Labubu dependency and spark growth through other IPs?” Hu said. 

Hu remains unconvinced: “I’ve yet to see proof that the other IPs can independently generate stand-alone interest.”

She also dismissed comparisons to enduring icons like Hello Kitty or Barbie, noting that their long-term success is built on constant availability, not the “speculative marketing, no scarcity, no blind box mechanics” that drive Labubu’s sales.

Despite this, the vast majority of analysts remain bullish, pointing to Pop Mart’s early stage of global expansion and its efforts to diversify.

JPMorgan Chase & Co. argues that the company already has a viable alternative to Labubu in its “Twinkle Twinkle” line. 

Analyst Kevin Yin wrote last month that the star-themed toys are attracting an “authentic fan base” and projects they will contribute 8 per cent of Pop Mart’s sales by 2027.

While analysts remain optimistic, the market appears to be growing wary. 

Pop Mart’s Hong Kong-listed stock has plunged more than 30 per cent from its August high, and short interest in the stock has climbed to its highest level since April 2024, signalling rising doubts among traders about its near-term performance.