Labubu: The Ups and Downs from Physical Toys to Digital Assets

The stock price of Labubu toy manufacturer has surged recently, with a market value exceeding HKD 350 billion, placing the founder among the richest in Henan. As of the end of last year, the company had 401 stores in mainland China and 130 stores overseas, with operations in more than 30 countries and regions, and overseas revenue accounting for over 38%. However, the related digital asset LABUBU has failed to maintain its long-lasting prosperity, with a market value dropping to USD 27.89 million and a 24-hour decline of 20.4%.

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The Origin and Development of Labubu

Labubu is a unique sprite character toy, with a round and cute appearance yet slightly fierce. It has a furry body, wide-open big eyes, pointy ears, and a mischievous smile made up of nine sharp teeth.

This character was designed by the artist Long Jiaseng, who was born in Hong Kong and grew up in the Netherlands, inspired by Nordic folklore and mythology. Long Jiaseng initially created the design with a fountain pen, and his love for fairy tales led him to create Labubu and his companions.

Labubu made its debut in 2015 and gained wider attention after collaborating with a toy company in 2019. According to the company's mid-year report for 2024, the series to which Labubu belongs generated sales of 6.3 billion RMB in the first half of that year.

In April 2025, the third generation of Labubu rubber plush products sparked a buying frenzy in multiple countries. In May of the same year, the related digital asset LABUBU was launched, which initially caused speculation, but ultimately could not escape the fate of a price decline.

On June 10, an auction of Labubu artworks was held in Beijing, where a humanoid Labubu was sold for 1.08 million yuan, with a total transaction amount reaching 3.73 million yuan.

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Reasons for the Labubu Craze

1. Unique Sales Model: Adopting a blind box format increases the excitement and uncertainty of purchases, driving up the secondary market prices of popular styles.

2. Excellent Cultural IP: Crossing cultural barriers, while being loved by both Asian culture and Western stars.

3. Multiple Advantages: The product possesses cross-cultural global consumer characteristics; creation and promotion have undergone patient accumulation and innovation; China has a complete industrial chain and a mature industrial ecosystem.

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The Fluctuations of the Digital Asset Market

Although the digital assets related to Labubu benefited from the popularity of physical toys, they still could not escape the fate of plummeting. Similar cases include the Fat Penguin series, whose NFTs and digital assets were once very popular but have now significantly declined.

Other well-known digital collectibles such as Bored Apes and CryptoPunks have also experienced similar price fluctuations. Despite attracting celebrities and large corporations to purchase at high prices, they subsequently faced significant price drops.

These cases indicate that whether supported by physical products or pure digital assets, it is often difficult to maintain high value after a brief boom. Assets that primarily rely on hype and speculative psychology are particularly susceptible to price crashes.

The volatility of the digital asset market reflects its high-risk characteristics. Even with tangible products as a backdrop, if there is a lack of practical application value and long-term development planning, it is still difficult to avoid the fate of significant price fluctuations. Investors participating in such markets need to remain cautious and fully recognize the risks involved.

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