Pop Mart’s China online sales drop 5% YoY in May, Labubu demand questioned

Pop Mart’s Labubu reign just got its first real itch. In May, the Chinese toymaker recorded its first year-on-year decline in domestic online sales since 2024, with domestic online sales down 5% from a year earlier and down 14% versus April, according to Moojing e-commerce data tracking transactions across Tmall, Taobao and Douyin. For a company whose growth story is tightly linked to its intellectual property (IP) portfolio, that is a notable inflection point, not just a bad month.

The headline number matters because it breaks a pattern. A year-on-year decline suggests this is not merely seasonal noise, especially since the drop is framed as the first such dip since 2024. Even more telling: the month-to-month fall is sharper at -14%. Together, those two comparisons can be read as demand losing momentum in the domestic online channel, where IP-driven collectibles live or die by repeat excitement and sustained “want it now” behavior.

To understand why executives should pay attention, zoom out to how China’s toy and collectible market typically behaves online. Platform shopping is fast. Hype cycles are short. When a character becomes a cultural shorthand for a certain aesthetic or status, demand often looks smooth for a while. But once consumers rotate to the next must-have drop, the traffic patterns can cool quickly. That means online sales are not just a measure of production capacity or retail execution. They also act like a live dashboard of attention, frequency, and willingness to spend on a specific IP.

That is where Pop Mart’s IP portfolio enters the conversation. The source explicitly ties the new uncertainty to “sustainability of demand” for Pop Mart’s IP portfolio, including Labubu, its blockbuster character. Labubu is not just a product line. In an IP-toxicity-resistant business model, the underlying bet is that the brand can keep generating new spikes of interest without constantly restarting from zero. A YoY decline, therefore, raises a strategic question: is Labubu still expanding the audience, or is it increasingly relying on the same consumer cohort cycling through fewer repeat purchases?

The data also hints at a second layer of the problem, one that matters for planning. The source notes that sales were “25 per cent below the average monthly level,” though the excerpt cuts off before clarifying the reference window for that average. Even without that detail, the implication is still important: May is not only weaker than last year and last month. It is weaker than what the business might consider a baseline month. For CFOs and board members, that shifts the conversation from “temporary slowdown” to “whether current run-rate is sustainable.”

This is especially relevant for capital allocation. Companies with IP-centric growth often face a classic trade-off: spend more to reignite demand versus protect margins when consumer appetite softens. If the market is cooling, aggressive pushes can turn into inventory or marketing costs that do not convert. But if spending is cut too quickly, the IP flywheel can lose friction, and the next launch may not regain earlier traction.

There is also a governance angle that boards should not ignore. When management guidance or investor expectations have been built around momentum, a first year-on-year decline since 2024 can change internal dynamics. Even if the company ultimately treats May as a blip, the board will likely want clearer evidence about what caused the dip. Was it specific to categories or platforms? Was it tied to timing, product mix, or the cadence of new releases? Moojing’s focus on Tmall, Taobao, and Douyin matters here because it anchors the observation to major consumer touchpoints rather than a single reseller.

For peers in consumer IP, the strategic stakes are broader than one toymaker. The collectibles space is becoming an attention economy. If Pop Mart’s Labubu juggernaut is showing signs of cooling in domestic online sales, it raises the risk that other IP-driven brands may face similar demand elasticity. Executives across toys, fashion-adjacent lifestyle products, and character licensing should read this as a reminder: IP can be sticky, but not immune. When the domestic online channel starts trending down, the burden of proof shifts quickly from marketing storytelling to repeatable, measurable demand.

In short, the May numbers create a real accountability moment. Pop Mart reported the first year-on-year decline in domestic online sales since 2024, with May down 5% YoY and 14% from April, and sales also 25% below the average monthly level, per Moojing data across Tmall, Taobao and Douyin. That is enough to question the sustainability of demand for its IP portfolio, including Labubu, and enough to force executives to look past character popularity and into whether the business model can keep generating momentum when attention cools.