Raphael Stevens

Pop Mart’s Hong Kong-listed shares dropped more than 5%, extending their slide from the previous session when they had slumped 5.3%.
The high-flying stock is on track for its first negative week since early May — down more than 13%. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.
Chinese state media on Friday criticized the “blind box” phenomenon — pioneered by Pop Mart — and called for stricter regulation.

Customers browse a POP MART display filled with Labubu characters and collectible figures from The Monsters series on June 16, 2025 in Chongqing, China.
Cheng Xin | Getty Images News | Getty Images

BEIJING — Shares in Labubu-maker Pop Mart continued to tumble Friday, after Morgan Stanley removed the stock from a focus list and state media called for stronger regulation for “blind box” toys.
The Chinese toymaker first gained popularity with its “blind box” concept, in which consumers buy unmarked boxes — which can cost from about $5 to $10 each — for a chance at getting a unique figurine and building a collection.

People’s Daily, the Chinese Communist Party’s official newspaper, on Friday criticized the “blind box” phenomenon, advocating for stricter regulation. The article did not mention Pop Mart by name and focused more on children and young people who were spending heavily on unmarked packets to collect cards.
China’s customs agency this month also highlighted several times on social media how it stopped cases of Labubu copycats from crossing the border.
Pop Mart’s Hong Kong-listed shares were last down more than 5%, extending their slide from the previous session when they had slumped 5.3%. That’s put the high-flying stock on track for its first negative week since early May — with losses of more than 13% so far. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.

The investment bank did not elaborate on why it removed Pop Mart shares. The firm on June 10 had raised its price target on the toy company to 302 Hong Kong dollars ($38.47), up from 224 HKD, on expectations that Pop Mart still had room to grow in the long term.

“We think the market has fully factored in Pop Mart’s exponential growth in 2025 but may not have strong conviction on the long-term outlook,” equity analyst Dustin Wei and a team said in the June 10 report.
“That said, in view of its lofty valuation, we do not expect this level of outperformance to continue in the next few quarters,” the report said.
Pop Mart shares hit a record intra-day high of 283.40 HKD on June 12.
The Beijing-based toy company has rapidly expanded overseas with online sales platforms and physical stores, including in the U.S. and U.K.

The Labubu craze

In the last few months, the company’s “Labubu” series of toys featuring an elf-like character have become a global phenomenon, even drawing the attention of fashion and culture-focused New York Magazine and The New York Times.
Pop Mart has also released Labubu stuffed toys, pillows and related merchandise to capture demand. A 4-foot-tall Labubu sold for the equivalent of $170,000 at an auction in Beijing earlier this month. Many of the more affordable versions of the figurine subsequently went out of stock in mainland China.
“We’ve seen certain trends like that before … There seems to always be some cute thing that people have to have,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC on Friday. The company helps foreign brands — such as Vitamix and iS Clinical — sell online in China and other parts of Asia.
He pointed to interest last year in capybara stuffed toys. Chinese retailer Miniso, which also has stores in the U.S. and other countries, was one of the main sellers of the stuffed animal.

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Cooke saw Pop Mart as “more lucky than anything,” although he pointed out it reflects growing interest in toys not just for children but also adults.
Indicating the soaring popularity of its toys, Pop Mart’s overseas sales in 2024 have already surpassed the company’s overall sales in 2021.
The company reported total sales, primarily domestic, of 4.49 billion yuan ($624.6 million) in 2021. In 2024, overseas sales alone surpassed that to hit 5.1 billion yuan, up 373% from a year ago, while mainland China sales climbed to 7.97 billion yuan. More

Pop Mart’s Hong Kong-listed shares dropped more than 5%, extending their slide from the previous session when they had slumped 5.3%.
The high-flying stock is on track for its first negative week since early May — down more than 13%. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.
Chinese state media on Friday criticized the “blind box” phenomenon — pioneered by Pop Mart — and called for stricter regulation.

Customers browse a POP MART display filled with Labubu characters and collectible figures from The Monsters series on June 16, 2025 in Chongqing, China.
Cheng Xin | Getty Images News | Getty Images

BEIJING — Shares in Labubu-maker Pop Mart continued to tumble Friday, after Morgan Stanley removed the stock from a focus list and state media called for stronger regulation for “blind box” toys.
The Chinese toymaker first gained popularity with its “blind box” concept, in which consumers buy unmarked boxes — which can cost from about $5 to $10 each — for a chance at getting a unique figurine and building a collection.

People’s Daily, the Chinese Communist Party’s official newspaper, on Friday criticized the “blind box” phenomenon, advocating for stricter regulation. The article did not mention Pop Mart by name and focused more on children and young people who were spending heavily on unmarked packets to collect cards.
China’s customs agency this month also highlighted several times on social media how it stopped cases of Labubu copycats from crossing the border.
Pop Mart’s Hong Kong-listed shares were last down more than 5%, extending their slide from the previous session when they had slumped 5.3%. That’s put the high-flying stock on track for its first negative week since early May — with losses of more than 13% so far. Its year-to-date gains stand at over 160%.
Morgan Stanley said in a note late Wednesday it was replacing Pop Mart with insurance company PICC P&C in the firm’s China and Hong Kong focus list.

The investment bank did not elaborate on why it removed Pop Mart shares. The firm on June 10 had raised its price target on the toy company to 302 Hong Kong dollars ($38.47), up from 224 HKD, on expectations that Pop Mart still had room to grow in the long term.

“We think the market has fully factored in Pop Mart’s exponential growth in 2025 but may not have strong conviction on the long-term outlook,” equity analyst Dustin Wei and a team said in the June 10 report.
“That said, in view of its lofty valuation, we do not expect this level of outperformance to continue in the next few quarters,” the report said.
Pop Mart shares hit a record intra-day high of 283.40 HKD on June 12.
The Beijing-based toy company has rapidly expanded overseas with online sales platforms and physical stores, including in the U.S. and U.K.

The Labubu craze

In the last few months, the company’s “Labubu” series of toys featuring an elf-like character have become a global phenomenon, even drawing the attention of fashion and culture-focused New York Magazine and The New York Times.
Pop Mart has also released Labubu stuffed toys, pillows and related merchandise to capture demand. A 4-foot-tall Labubu sold for the equivalent of $170,000 at an auction in Beijing earlier this month. Many of the more affordable versions of the figurine subsequently went out of stock in mainland China.
“We’ve seen certain trends like that before … There seems to always be some cute thing that people have to have,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC on Friday. The company helps foreign brands — such as Vitamix and iS Clinical — sell online in China and other parts of Asia.
He pointed to interest last year in capybara stuffed toys. Chinese retailer Miniso, which also has stores in the U.S. and other countries, was one of the main sellers of the stuffed animal.

Weekly analysis and insights from Asia’s largest economy in your inboxSubscribe now

Cooke saw Pop Mart as “more lucky than anything,” although he pointed out it reflects growing interest in toys not just for children but also adults.
Indicating the soaring popularity of its toys, Pop Mart’s overseas sales in 2024 have already surpassed the company’s overall sales in 2021.
The company reported total sales, primarily domestic, of 4.49 billion yuan ($624.6 million) in 2021. In 2024, overseas sales alone surpassed that to hit 5.1 billion yuan, up 373% from a year ago, while mainland China sales climbed to 7.97 billion yuan. More

A little more than a century ago, in July 1918, the wives of fishermen in Toyama began to protest against the export of rice from their prefecture. The unrest, which was triggered by the staple grain’s surging price, then spread across Japan. Ultimately, the so-called rice riots were violently extinguished by 100,000 troops; an action that would in time bring down the government. More

Japan, a heavily indebted country, is not known for its fiscal hawks. Yet for a few weeks in May austere types were ascendant. As long-dated bond yields surged worldwide, the Japanese market wobbled and their warnings seemed prescient. After a dodgy auction revealed weak investor demand, 40-year yields reached 3.7%, a record, having started the year at 2.6%. Was a buyer’s strike afoot? Ishiba Shigeru, the prime minister, certainly seemed worried: “Our country’s fiscal situation is undoubtedly extremely poor, worse than Greece,” he told parliament on May 19th. More

Japan, a heavily indebted country, is not known for its fiscal hawks. Yet for a few weeks in May austere types were ascendant. As long-dated bond yields surged worldwide, the Japanese market wobbled and their warnings seemed prescient. After a dodgy auction revealed weak investor demand, 40-year yields reached 3.7%, a record, having started the year at 2.6%. Was a buyer’s strike afoot? Ishiba Shigeru, the prime minister, certainly seemed worried: “Our country’s fiscal situation is undoubtedly extremely poor, worse than Greece,” he told parliament on May 19th. More

A Chinese entrepreneur raked in $7.65 million after streaming using an interactive digital avatar.
That was more than what he earned from his previous livestream, which he hosted personally.
“This is a DeepSeek moment for China’s entire livestreaming and digital human industry,” an analyst said.

Chinese influencer Luo Yonghao and co-host Xiao Mu tried out livestreaming on Sunday, June 15, 2025, using interactive digital avatars based on Baidu’s generative artificial intelligence model.
Screenshot

BEIJING — Avatars generated by artificial intelligence are now able to sell more than real people can, according to a collaboration between Chinese tech company Baidu and a popular livestreamer.
Luo Yonghao, one of China’s earliest and most popular livestreamers, and his co-host Xiao Mu both used digital versions of themselves to interact with viewers in real time for well over six hours on Sunday on Baidu’s e-commerce livestreaming platform “Youxuan”, the Chinese tech company said. The session raked in 55 million yuan ($7.65 million).

In comparison, Luo’s first livestream attempt on Youxuan last month, which lasted just over four hours, saw fewer orders for consumer electronics, food and other key products, Baidu said.
Luo said that it was his first time using virtual human technology to sell products through livestreaming.
“The digital human effect has scared me … I’m a bit dazed,” he told his 1.7 million followers on social media platform Weibo, according to a CNBC translation.
Luo started livestreaming in April 2020 on ByteDance’s short video app Douyin, in an attempt to pay off debts racked up by his struggling smartphone company Smartisan. His “Be Friends” Douyin livestream account has nearly 24.7 million followers.
Luo’s and his co-host’s avatars were built using Baidu’s generative AI model, which learned from five years’ worth of videos to mimic their jokes and style, Wu Jialu, head of research at Luo’s other company, Be Friends Holding, told CNBC on Wednesday.

“This is a DeepSeek moment for China’s entire livestreaming and digital human industry,” Wu said in Mandarin, translated by CNBC. DeepSeek, China’s version of OpenAI, rattled global investors in January with its claims of rivaling ChatGPT at far lower costs and using an open-source approach.
AI avatars can sharply reduce costs since companies don’t need to hire a large production team or a studio to livestream. The digital avatars can also stream nonstop without needing breaks.
“We have always been skeptical about digital people livestreaming,” Wu said, noting the company had tried out various kinds of digital humans over the years.
But he said that Baidu now offers the best digital human product currently available, compared to the early days of livestreaming e-commerce five or six years ago.

A growing industry

Livestream shopping took off in China after the pandemic forced businesses to find alternative sales channels. More people are turning to livestreaming to earn money from commissions and virtual gifts amid slower economic growth.
Livestreaming generated so many sales on Douyin last year that the app surpassed traditional e-commerce company JD.com to become China’s second-largest e-commerce platform — and ate into the market share of lead player Alibaba, according to a report from Worldpanel and Bain & Company last week. Both JD.com and Alibaba’s Taobao also offer livestreaming sales portals.
Meanwhile, other Chinese companies, including tech giant Tencent, have developed tools to create digital people that can be used as news anchors. In late 2023, several businesses started trying out virtual human livestreamers during the Singles Day shopping holiday.
But analysts have cautioned that products sold via livestreams tend to have a high return rate as they are often impulse purchases.
The biggest challenge for using virtual humans to livestream is no longer the technology, but compliance and platform requirements, Wu said. Digital humans need to be trained to adhere to regulations about product advertising, while major livestreaming platforms may have different rules about allowing virtual people to host the sessions, he said.

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For example, Douyin has rolled out restrictions on using the technology, especially if the virtual people do not interact with viewers.
While Luo’s next virtual human appearance hasn’t been set yet, Wu said he expects it will be very soon. And in the future, he said, digital humans could easily livestream in multiple languages to reach users outside China. More