On August 20th, Bubble Mart (09992. HK) released its 2026 interim performance report. In the first half of the year, the company's revenue was 17.173 billion yuan, a year-on-year increase of 23.8%. Among them, the revenue from the Chinese market was 12.201 billion yuan, a year-on-year increase of 47.3%; The overseas market revenue was 4.972 billion yuan, a year-on-year decrease of 11.1%, and the proportion of the company's total revenue decreased from 40.3% in the same period last year to 29%.

Overseas business has always been the focus of Pop Mart. Wang Ning, Chairman and CEO of Pop Mart, once stated that the two core strategies proposed by Pop Mart when it went public were internationalization and IP centered groupization. Internationalization has been an important driving force for its development in the past few years. In 2025, Bubble Mart's overseas revenue will reach 16.268 billion yuan, a year-on-year increase of 291.9%, accounting for about 43.8% of the total revenue, which is only one step away from Wang Ning's goal of "overseas revenue accounting for more than 50% by 2025" proposed in 2024.

At the performance conference held on the day of the financial report release, Wang Ning referred to 2026 as the "year of adjustment". He mentioned that in 2025, overseas markets will receive more traffic than expected, which will form a relatively high base; As external traffic gradually returns to normal, Pop Mart needs to re-examine the operational capabilities of its overseas stores, product supply, and local teams.

The proportion of overseas online revenue has fallen

Bubble Mart currently divides its overseas business into Asia Pacific, Americas, Europe, and other regions. In the first half of 2026, the company's revenue in the Asia Pacific market was 2.575 billion yuan, a year-on-year decrease of 9.7%; The revenue of the American market was 1.892 billion yuan, a year-on-year decrease of 16.5%; The revenue from Europe and other regions was 506 million yuan, a year-on-year increase of 5.9%.

Opening stores in overseas markets was once a key strategy for Pop Mart to promote its overseas business. As of the end of June 2026, Pop Mart has 90, 86, and 45 offline stores in the Asia Pacific, Americas, Europe, and other regions, respectively, an increase of 30.4%, 109.8%, and 150% year-on-year compared to last year.

The impact of online traffic is one of the reasons why Pop Mart is determined to expand its offline stores. Pao Pao Mart's Chief Operating Officer, Cheng De, once revealed that when formulating the 2025 budget for the US market in the second half of 2024, the expected revenue was about 2 billion yuan, but the actual "achieved 6.9 billion yuan". At that time, there were only 50-60 offline stores in the United States, and the offline stores' carrying capacity was clearly insufficient. Therefore, Pop Mart sold a large number of products online, resulting in a high proportion of online revenue. By the end of 2025, Bubble Mart's overseas retail store revenue will be 7.179 billion yuan, with online revenue of 7.912 billion yuan. Online channels account for 48.6% of the overall overseas revenue, which is already higher than retail store revenue.

However, this is not the ratio of online to offline income that Bubble Mart hopes to maintain in the long run. Side revealed at the performance briefing in March this year that continuing to open offline stores and adjusting the distribution of goods through different channels, gradually increasing the proportion of offline revenue slightly higher than online, is the direction that Bubble Mart needs to work towards in the future.

The revenue ratio between offline stores and online channels has improved in the latest financial report disclosure. In the first half of 2026, the proportion of overseas retail store revenue of Pop Mart increased from 44.7% in the same period last year to 60.8%, while the proportion of online revenue decreased from 45.8% to 28.8%. Side explained at the 2026 mid-term performance meeting that the decline in overseas online revenue is partly related to the return of traffic to normal. He expects that the year-on-year growth pressure of overseas business in the second half of the year will continue.

No longer just looking at the number of stores opened

At this performance meeting, Wang Ning referred to overseas offline stores as the "basic base" for Bubble Mart's long-term growth in the future. However, compared to the management's previous statements, the focus of overseas business is changing.

At the 2024 annual performance meeting, Pop Mart proposed plans to open approximately 100 new stores overseas by 2025, and to expand the stores to "larger areas and better locations". By August 2025, the number of overseas stores of Pop Mart had increased to 140, and it was expected that this number would exceed 200 by the end of the year. By April 2026, Side stated during the first quarter performance conference call that the development of overseas stores has entered a stage where there is no longer excessive focus on the number of stores opened, but rather on managing each store well.

Pop Mart once used a store in Jakarta, Indonesia as an example. The area of this store is about 50 square meters, and the monthly sales can reach 1.5 million to 2 million yuan, with a high profit margin. But in Bubble Mart's view, the location and area of this store are still not enough to present the brand image it hopes to convey.

Wang Ning further clarified at the latest performance meeting that sales growth in 2026 is not the main goal of Bubble Mart. Compared to short-term performance, he is more concerned about corporate governance and the health of operations. Side said that opening overseas stores has entered a stage where "quality far exceeds quantity" by expanding network coverage.

Side specifically mentioned that this does not mean that Pop Mart will significantly slow down its overseas store opening speed. Pop Mart will continue to increase its requirements for store location, area, and commercial conditions. If the requirements cannot be met, Pop Mart would rather wait than try to open a good store. In the first half of 2026, Pao Pao Mart will have a net increase of 36 overseas stores, which is basically equivalent to the net increase of 38 stores in the same period last year.

Outside of the store, Pop Mart is still adjusting its product supply and overseas team. Side said that some new products in the United States and Europe either cannot be launched at the same time as other markets, or are out of stock as soon as they are launched. The reason is that there is not enough time left for production and logistics in product development, and the goods that can be delivered by sea are limited. In the end, it is necessary to switch to higher cost air freight to ensure timely supply to various markets.

The solution proposed by the management is to advance product development and stocking time, in order to more accurately determine what and how much goods are needed in different regions. In some overseas markets, Pop Mart will continue to upgrade its stores and supplement key positions in the local team. Side said that the Asia Pacific team has basically completed the reconstruction.

(Author Luo Wenli)