The late 1990s saw Beanie Babies. The 2000s ushered in the new wave of Pokemon cards. Today, you’ll
often see brightly colored, cute-yet-monstrous creatures swinging from backpacks and tote bags.
Produced by parent company Pop Mart, these collectible plushes known as Labubus have surged into an
internet phenomenon. The company’s luck-based business model translates this social media virality to
tangible sales, succeeding amidst an increasingly bleak economy and job market.
While the character of Labubu was created in 2015 by Hong Kong illustrator Kasing Lung, its commercial
breakthrough of the plush toy did not occur until late 2023. Unlike traditional collectibles, however,
consumers cannot purchase the specific Labubu they desire. Instead, Pop Mart sells the trinkets in blind
boxes, creating an emotional experience that extends beyond the tangible product.
This business model both creates a sense of scarcity and incentivises repurchases. Blind boxes often hold
a retail price of from $35-50 CAD, yet due to Pop Mart’s limited drops, it is difficult for interested
consumers to purchase one. Individuals stake out the website for the perceived privilege of buying a
Labubu, adding to the social media discourse and public perception of the product as a luxurious,
desired item. Even when individuals manage to purchase a blind box, the design of the Labubu inside is
up to chance. If a consumer is dead-set on a specific design, they must either purchase several blind
boxes to increase their chances or hunt on the resale market- both of which drastically increase the
average purchase price of the collectible. Additionally, each new line of Labubus presents a Secret Rare
option, highly coveted by the community due to the status they offer. In the age of social media,
consumers are increasingly purchasing products not for their functionality, but for their symbolic or
expressive value. While functionally, the Secret Rare design is quite similar to the others, it serves as a
distant dream for consumers that fuels repeat purchases.
Pop Mart’s business model, while unconventional, aligns well with the current pop culture zeitgeist and
the gamification of consumption. According to the New York Post, Pop Mart generated a net profit of
636 million in the first half of 2025, with their “The Monsters” line attributing 34.7% of total revenue.
Jeff Berkowitz of Aurora Retail Group, who represents Pop Mart in Canada, expects 10 new stores to be
opened in Canada in response to the meteoric 204.4% revenue increase from last year. Yet, this rapid
development comes at a time where other major retail brands are closing down amidst economic
uncertainty and inflationary pressure.
Contrary to what many would expect amidst financial difficulties, however, individuals are spending
more than ever on recreational purchases. Statistics Canada reported households spending $5,231 on
recreation in 2023, following an upwards trend from the two years prior. Entertainment spending from
Canadians nationwide grew 10.2% from January to November 2025, accounting for 16.7% of all
spending. This phenomenon has been traditionally known as the “Lipstick Effect,” which sees the
purchase of small commodities during times of economic hardship rise. While individuals are forced to
cut back on their lifestyle, they choose certain small items as splurges to maintain a sense of freedom,
autonomy, and luxury. Labubus, perceived as both a status symbol and a viral commodity, are
positioned as an affordable indulgence, offering psychological comfort and momentary joy. While
lipstick tubes have been the archetypical example of recession-era indulgence, the ascendance of social
media has introduced new viral products and trends to occupy that role.
While everyone has an opinion on how cute, unique, or raggedy these new collectables are, Pop Mart’s
business model effectively translates broad interest into a steady stream of loyal customers. By
positioning their products as valuable frivolities and selling a gamified experience, the brand has not
only survived economic struggle, but thrived amidst it.
Sources:
https://nypost.com/2025/08/19/business/chinas-pop-mart-sees-profit-soar-400-as-labubu-dolls-fly-off-s
helves-around-the-world/
https://retail-insider.com/retail-insider/2025/11/pop-mart-enters-canada-with-multi-store-launchstrate gy/
https://www150.statcan.gc.ca/n1/daily-quotidien/241104/dq241104c-eng.htm