The two 'Basic Instincts' behind the Labubu Surge
and $50 Billion Market Cap
660 words; Reading Time: 3.5 minutes
A rabbit-like creature with sharp teeth shouldn't be worth $500. But try explaining that to the crowds camping outside Pop Mart stores at 3 AM to get their hands on the latest Labubu drop.
Since Labubu's breakout, Pop Mart's market cap has exploded from $3.4 billion to over $52 billion—a 15x surge. Revenue hit $2 billion in 2024, with Labubu products driving 35% of sales. The company now operates across four continents, and those secret rare Labubus that retail for $50 regularly resell for $500+.
Pop Mart didn't win by inventing a new kind of toy. It won by sequencing two very old human instincts in a clean retail system:
Little Treats
Dopamine hits
When you put "a little treat" and "a safe gamble" into the same purchase, you lower the friction to start and raise the desire to repeat.
Little Treats
Start with the "little treat." In uncertain times, people substitute big, delayed milestones with small, certain pleasures. Economists give it labels—the lipstick effect, treatonomics—but the behavior is obvious in stores: modest prices, quick decisions, and objects that feel like a reward.
Pop Mart builds for that zone. A blind box typically sits in the impulse band, the packaging feels gift-worthy, and the figure is display-ready as a keychain to be hooked to your carry-on.
Because the spend is low and the delight is visible every day, the buyer doesn't need to rationalize the purchase or wait for a special occasion. The result is frequency: you can add a box to a mall visit or a payday errand without consulting a spreadsheet.
Dopamine Hits
Then layer the uncertainty. Variable outcomes are sticky because the next turn might be the win. Casinos know this, mobile games know this, and social feeds know this.
Labubu blind boxes translate the same reinforcement schedule into physical retail without the stigma of gambling. A series teases a full lineup, a few rares, and usually a secret figure; most boxes deliver something you're happy to own, and once in a while you pull the chase that spikes emotion.
Pop Mart amplifies the reveal with content and community: short unboxing videos do the marketing work, and local swaps or online groups give duplicates a path to value. When buyers believe the odds are credible and the chase is achievable, the habit sustains itself without heavy discounts or hard selling.
When the two meet
The compounding happens where the two instincts meet. Low entry cost gets you to try; intermittent wins keep you circling back; social proof from displays and unboxings normalizes the behavior for the next buyer. Scarcity and cadence do the rest. Limited runs, seasonal finishes, and collaborations create genuine "now or never" moments, while characters with personality turn randomness into a story. It's not just "box number seven"—it's "the raincoat Labubu" that completes your collection.
What makes Pop Mart different from previous collectible crazes isn't the blind box mechanism—that's been around since baseball cards. It's the precision of the system. Where other collectibles relied on either pure nostalgia (trading cards) or pure luxury (limited sneakers), Pop Mart found the sweet spot: accessible enough to be an impulse buy, designed enough to display, mysterious enough to repeat.
The genius is in the restraint. They didn't gamify everything or chase whale customers with $1000 ultra-rares. They kept the core experience clean: a reliable little pleasure with a chance of delight, wrapped in characters that make the randomness feel like destiny.
Strip away the hype, and Pop Mart is a masterclass in behavioral design. They took two instincts that usually work against each other—the desire for certainty (a treat) and the thrill of uncertainty (a gamble)—and made them amplify each other instead. The result isn't just a toy company. It's a repeat-purchase engine built on the most reliable fuel there is: human nature.
cheers
Rohit
PS: I haven’t written as often as I wanted to. Hopefully you’ll now see me more often in your inbox.
This mechanism has worked so well in Japanese market, but not so big in other places. What could be the reason that it works so well there (or does not work at other places).
MR.ROHIT KAUL convinces me about The two 'Basic Instincts' —Little Treats &
Dopamine hits—behind the Labubu Surge and $50 Billion Market Cap.
Mr.Rohit deeply analyses the current MAD rush and shares his deep insights which go beyond a simple Labulu rush —-it tells us about the human brain itself and how Our Brains Feel Objects. Mr.Rohit tells us that The brain doesn't just see materials; it experiences them across multiple sensory dimensions.