Prime Minister Sir Keir Starmer has presented Chinese toy giant Pop Mart’s planned European headquarters in London as a key achievement of his recent visit to China, touting the investment as both a diplomatic and economic success.
The company has announced plans to open 27 new stores across Europe over the next year, including up to seven in the UK, claiming the expansion could create more than 150 jobs. The government has highlighted the move as evidence of successful trade engagement and inward investment secured during the visit.
Yet as the applause fades, questions are beginning to surface.
Sales Momentum Faltering
In the final quarter of last year, signs emerged that Pop Mart’s growth, driven heavily by its flagship designer toy, Labubu was losing steam.
High-frequency consumer data suggests transaction volumes, social media engagement, and online search interest in the brand’s major intellectual properties have all declined simultaneously. In October, year-on-year growth in offline transactions via Alipay slowed to 54 per cent, down from the previous quarter. Online sales across e-commerce platforms and flagship stores fell to their lowest level in roughly 18 months.
Labubu, once so sought-after that securing one felt akin to winning a lottery, has seen enthusiasm cool sharply. Engagement on the Chinese social platform Xiaohongshu reportedly fell between 86 and 91 per cent quarter-on-quarter, while search indices on Baidu and WeChat have also declined. Activity in the resale market has contracted significantly, with price cuts failing to stimulate demand.
This appears less a brief fluctuation than a broader cooling of interest.
Labour Concerns in the Supply Chain
More troubling than softening sales are allegations regarding labour conditions in the company’s supply chain.
A report by the US-based advocacy group China Labour Watch alleges serious labour violations at Jiangxi Xinfeng Shunjia Toy Factory, one of the facilities producing Pop Mart products. The factory is said to employ more than 4,500 workers, including individuals under the age of 17, who were reportedly assigned to standard production lines alongside adults and subject to the same output targets and disciplinary systems.
According to the report, underage workers regularly logged more than 100 hours of overtime per month and were not provided with legally required occupational health protections or medical checks. Overall overtime levels were described as extreme, frequently exceeding 100 hours per month and reportedly reaching as high as 145 hours during peak production periods. Workers were said to labour six to seven days a week, with some months allowing only a single day off. Instances of more than 14 consecutive working days were not uncommon, and daily rest periods reportedly fell below ten hours, conditions that would breach China’s labour law.
Production targets were described as intense: teams of 25 to 30 workers were expected to assemble at least 4,000 Labubu units per day. Basic breaks were reportedly restricted, with workers permitted to leave their stations only twice within a three- to four-hour shift, even for toilet or water breaks, and reprimanded for exceeding that limit.
One worker quoted in the report said: “The pay is low, the management is strict. I was scolded just for going to the toilet twice in the morning.”
Approximately 30 per cent of the factory workforce was reportedly composed of agency labour, a triple to China’s statutory 10 per cent cap. China Labour Watch estimates that the direct labour cost per Labubu unit is around $0.70 (approximately £0.55). Pop Mart has stated that it is investigating the allegations.
Investment Success — At What Cost?
With sales momentum weakening and labour concerns unresolved, the decision to frame Pop Mart’s UK expansion as a flagship diplomatic success invites scrutiny.
Supporters will argue that securing international investment and job creation remains a priority for the UK economy. Critics, however, question whether celebrating such deals without addressing underlying commercial volatility and supply-chain risks represents prudent economic strategy.
As the initial hype subsides and serious labour allegations remain under investigation, the central question lingers: is this a strategic trade success — or a premature political victory lap?