From Needs to Wants: The Emotional Turn in Chinese Consumerism
Recently a life-size Labubu figure sold for over 1 million yuan (approximately USD140,000) at an auction in Beijing, cementing its place as a pop culture and collector phenomenon.
Non-collectors may find it hard to grasp the unique appeal of a plush toy, and like many pop culture phenomena, the global craze may ultimately prove fleeting. Yet, its significance lies not just in its popularity, but in what it reveals about China’s evolving consumer culture – one that is becoming more expressive, brand-savvy, and globally influential.
No longer driven solely by price or practicality, today’s consumers – particularly Generation Z – are seeking something more meaningful: emotional resonance, personal identity, and moments of joy. This shift is reshaping how brands connect with audiences, elevating storytelling, design, and cultural relevance as key drivers of value.
The most recent Single’s Day shopping festival revealed a surge in spending on toys and collectibles, particularly those linked to popular games and animated series. In China, this phenomenon is known as “IP consumption” - where consumers engage with intellectual property not just as fans, but as collectors and lifestyle participants.
This is more than a fleeting trend or a wave of impulse buying. It signals a deeper cultural and psychological shift – one that is closely tied to broader economic changes.
Today, Chinese authorities are increasingly turning to domestic consumption as a more sustainable engine for long-term economic expansion, especially in the face of an uncertain global trade environment.
Recognizing this shift, policymakers are now prioritizing domestic consumption as the next engine of growth. Boosting consumption and expanding domestic demand are now a top priority for policymakers1.
This strategic pivot reflects a broader recognition: future growth will depend less on factories and infrastructure, and more on consumer confidence, innovation, and emotional engagement. A recent government action plan on boosting consumption released in March has a remarkably detailed strategy on finding ways to improve the daily lives of Chinese consumers as they deal with both public and private companies2.
In today’s China, how a product makes someone feel is becoming just as important as what it does or how much it costs. The era of competing solely on price is giving way to a new age of emotionally driven consumption – one where brands that can cultivate lasting relationships with consumers will lead the way.
What sustains a brand or IP over the long haul? It’s not fleeting trends or viral moments – they may spark attention, but they rarely build loyalty. The true key lies in long-term emotional resonance. This requires sustained emotional engagement – through storytelling, shared values, cultural relevance, and a deep understanding of what their consumers care about.
Brands that successfully crack the code of emotional relevance gain more than just loyalty – they gain pricing power. This can be thought of as an “IP premium”: the added value a product commands beyond its functional utility, encompassing emotional, cultural, and identity-based value.
These intangible elements transform a brand from merely selling products to offering emotional experiences. In a market saturated with similar offerings, this is what allows a brand to stand out, charge more, and stay relevant over time.
Meanwhile, clever marketing strategies – such as limited editions, exclusive drops, and brand collaborations – can drive repeat purchases and deepen emotional attachment. These tactics not only create urgency and excitement but also foster a sense of belonging among consumers.
Over time, loyal customers evolve into brand advocates, amplifying the brand’s reach through social media and word-of-mouth. This creates a self-sustaining loop of organic growth, where emotional engagement fuels visibility, and visibility reinforces emotional connection.
Of course, it remains an open question whether Labubu’s popularity will endure. Building lasting value in creative IP is inherently challenging. The success of IP-driven businesses hinges on sustained creativity and continuous innovation.
Without fresh content, evolving narratives, or compelling storytelling, even the most visually striking IPs risk losing cultural relevance and fading from public consciousness. This is especially true in today’s fast-moving digital landscape, where attention spans are short and trends shift rapidly.
Moreover, global competition is intensifying. International brands are increasingly vying for IP licenses and market share within China, raising the bar for originality, execution, and emotional resonance.
“IP consumption” represents an exciting new dimension of the Chinese economy – one that reflects rising incomes, shifting lifestyles, and a growing appetite for discretionary, emotionally driven spending. As consumers gain more time and money, they’re increasingly investing in experiences and products that resonate with their identities and passions.
China’s burgeoning creative IP sector is uniquely positioned for success, thanks to the sheer scale and sophistication of its domestic market. This vast consumer base serves as a dynamic proving ground where emotionally resonant IP can find its niche and evolve in response to increasingly discerning audiences.
By leveraging proprietary IP, cultural identity, and emotionally rich storytelling, a new generation of Chinese brands is poised to achieve higher margins, deeper consumer loyalty, and global recognition. After all, if a brand can thrive in China’s hyper-competitive, trend-sensitive market – why not the world?
By creating emotionally resonant, culturally rich IP, Chinese companies have the potential to not only shape global tastes, but also to redefine China’s role in the global creative economy.
A version of this article appeared in South China Morning Post on July 1, 2025 (Opinion | Global Labubu craze reflects China’s creative and consumption ambitions | South China Morning Post)
Investment risks
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
