Nigeria, June 20 -- Jealousy over Pop Mart, the Hong Kong-listed Chinese toy maker whose Labubu dolls went viral and swept across the globe, is starting to get a rough awakening.

The toy maker's shares dropped once again on Friday, saddled by intensifying regulatory pressure from Chinese state media and a strategic downgrade by global investment bank Morgan Stanley.

What was once China's sweetheart for toys and collectibles, Pop Mart, is now a global phenomenon for its creative "blind box" business model. Consumers spend between $10 and $5 in sets of boxes to buy coveted figurines, a cyclical consumption behavior conditioned by younger consumers. The same business model now has the government increasingly worried.

Last week, People's D...