On October 27th, Bubble Mart (09992. HK) disclosed its recent business situation. The announcement shows that the company's revenue in the third quarter decreased by 45% to 50% year-on-year, with revenue in the Americas market falling by 70% to 75% year-on-year, making it the region with the largest decline among the four major sales regions.This is the second consecutive quarter of pressure on Bubble Mart's Americas business.In the first quarter of this year, revenue in the Americas increased by 55% to 60% year-on-year; In the first half of the year, the revenue in the Americas decreased from 2.265 billion yuan in the same period of 2025 to 1.892 billion yuan, a year-on-year decline of 16.5%.

A source close to Bubble Mart told the Economic Observer that in the face of operational pressure in the North American market, Bubble Mart's management has visited the United States multiple times this year to investigate issues in local business operations and channel expansion.

During the conference call after the performance disclosure on that day, Pao Pao Mart's Chief Operating Officer, Fang De, introduced that the company had adjusted the pricing of some products in the American market. In the United States, Pop Mart has also shortened delivery times by adjusting suppliers and increasing the proportion of local shipments for e-commerce orders. The management stated that the above adjustments have improved delivery efficiency and reduced logistics costs.

In terms of channels, Pop Mart has begun to try to cooperate with large chain retailers in the United States. On the one hand, it distributes authorized products of globally renowned IPs such as Disney and Marvel, which the company calls "big copyright products," and on the other hand, it uses these channels to digest some inventory. This is also the first time that Pop Mart has attempted such cooperation.

Bubble Mart will adjust its organizational structure to four major regions starting from April 2025.In the third quarter of 2026, all four regions of Bubble Mart experienced a year-on-year decline in revenue for the first time.Except for a 70% -75% year-on-year decline in revenue in the Americas, the Asia Pacific region experienced a 65% -70% year-on-year decline in revenue, Europe and other regions experienced a 50% -55% year-on-year decline in revenue, and the Chinese market experienced a 25% -30% year-on-year decline in revenue.

Side attributed the pressure in the third quarter to a high base, stating that "the core of last year's high business explosion occurred in the third quarter, which was also the quarter with the highest sales (scale) in history. Taking the Americas as an example, the year-on-year revenue growth in the region reached 1265% -1270% in the third quarter of last year, which was also the peak period of LABUBU's global popularity.

The American market was once the fastest growing region for Pop Mart.In March 2025, Pop Mart will shift its overseas development focus from Southeast Asia to the United States and Europe. According to the annual performance data for 2025, the revenue of Bubble Mart in the Americas market increased from 802 million yuan in 2024 to 6.806 billion yuan, a year-on-year increase of 748.4%. In August 2025, Side also stated that it will maintain a faster opening speed in the US market in the next one to two years, with more stores entering landmark locations in big cities.

The management has acknowledged that while Bubble Mart is rapidly expanding in the Americas, its organizational capabilities are under significant pressure. In March of this year, Side stated at its annual performance meeting that 2025 is the second year of formal operation in the North American market. The company allocated a budget based on a revenue scale of 2 billion yuan, but actual revenue reached 6.8 billion yuan, putting significant pressure on talent reserves, internal systems, and warehousing logistics.

After the revenue in the Americas shifted from an increase to a decrease in the second quarter, the management of Pop Mart attributed the decline in the Americas market to two reasons at the mid-term performance briefing in August. Firstly, the LABUBU traffic of core IP gradually declined this year, and secondly, the general traffic and customer acquisition capabilities of the Americas online channel are still under construction. At that time, Wang Ning, the chairman of Bubble Mart, defined 2026 as the "year of business adjustment" and admitted that it was highly likely that the 20% revenue growth target set at the beginning of the year would not be achieved, and it was expected that the pressure in the second half of the year would be greater than that in the first half.

As of the end of June 2026, the number of retail stores in the Americas has increased from 41 in the same period last year to 86, more than doubling the number of stores. During the same period, offline revenue in the Americas was 1.007 billion yuan, a year-on-year increase of 19.5%. The proportion of revenue increased from 37.2% in the same period last year to 53.2%, surpassing online channels for the first time. Side stated during the third quarter conference call that the number of stores in the United States has exceeded 100.

For the upcoming sales expectations, Side mentioned that the fourth quarter is a traditional peak sales season, and "various markets will basically achieve month on month sales growth on the basis of maintaining stability".

(Author Luo Wenli)