You’ve probably seen them on TikTok: sharp-toothed, spiky-eared monster figurines dangling from backpacks, purses, and phones like charms. Labubus are collectible toys based on mischievous, elf-like creatures created by Hong Kong artist Kasing Lung, who drew inspiration from European folklore monsters. Produced by Chinese toy giant Pop Mart, Labubus come in sealed “blind boxes” so buyers don’t know which one they’ve gotten until they open it. That element of surprise combined with high-profile endorsements from celebrities, including Lisa from Blackpink and Rihanna, have turned Labubus into collector’s items with eye-popping prices. Originally $15, a Labubu recently sold for $170,000 at auction.

Securing a Labubu has become as difficult as finding certain luxury handbags even though they are made from simple, easy-to-obtain materials like plush, plastic, and vinyl. Experts say the craze reflects the “lipstick effect,” a trend where consumers facing economic uncertainty still spend on small, affordable luxuries that bring comfort and joy. For example, sales of Labubus surged in China during strict COVID lockdowns as people sought emotional relief through tactile collectibles that offer a sense of identity, community, and personal expression. Even amid financial worries, demand remains strong for items that provide fun, nostalgia, and escapism — small indulgences with big emotional value.

Pop Mart, founded in Beijing and known for pioneering the blind box model, has built a passionate global fanbase by combining mystery packaging, original characters, and social media buzz. With nearly 500% growth overseas in revenue and partnerships with retailers like Urban Outfitters and TikTok Shop, the company is rapidly expanding. The question is whether Pop Mart can broaden this trend beyond figurines. Entertainment brands like Pokémon, Hello Kitty, Nintendo, and Disney demonstrate how far a lovable character can take a business. According to market analyst Shaun Rein, Pop Mart could even open its own theme park or amusement park, attracting consumers who are “spending to feel better because of the anxiety” caused by economic uncertainty.

Questions:

1. What is the “lipstick effect,” and how does it help explain the global popularity of Labubu?
2. Do you think Pop Mart could possibly expand Labubu into a large entertainment brand similar to Pokémon or Hello Kitty? Why or why not?

Sources: Grace Jackson, “What’s a Labubu? And Why Are They So Popular?” Inc., July 12, 2025; Adrian Volenik, “Analyst Says Viral Doll Labubu Boom Reflects The ‘Lipstick Effect’ Among Anxious Spenders,” Benzinga, July 13, 2025.