This summer, the rise of guzi culture, led by trending character Labubu, has sparked a wave of emotional spending. A mint-colored Labubu figure fetched 1.08 million yuan ($150,540) at auction, while licensed trading card company Kayou reported annual net profit of 4.4 billion yuan.
From designer toys to collectible cards, retailers are tapping into this fresh trend where joy itself becomes a reason to buy.
The term guzi refers to merchandise derived from anime and ACG (animation, comics, games) IPs, including blind boxes, badges, figurines, plush toys, trading cards and novelty snacks. A growing number of young consumers are enthusiastically buying, collecting and trading guzi, fueling a vibrant and fast-growing market.
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China's ACG reached 597.7 billion yuan in 2024, and is expected to hit 834.4 billion yuan by 2029, according to consultancy iiMedia Research.
Chinese trendy collectible toy maker Pop Mart, which sold the record-breaking Labubu had become a phenomenon even before the June 10 auction. In the first half of the year, Pop Mart's revenue was 13.88 billion yuan, representing a year-on-year growth of 204.4 percent. On June 9, Forbes' real-time billionaire list named company founder Wang Ning the richest person in Henan province and ranked him 10th among China's wealthiest people.
Pop Mart had opened over 500 stores across more than 30 countries and regions by the end of last year, and reached consumers in over 90 countries through cross-border e-commerce platforms.
Founded in 2011, Kayou produces anime intellectual property derivatives. The trading card company has licenses for IPs including Ultraman and My Little Pony and is pursuing a Hong Kong IPO.
In 2024, Kayou reported revenue of 10.06 billion yuan, up 277.78 percent year-on-year, with adjusted net profit reaching 4.47 billion yuan, surging 378.27 percent year-on-year.
Lu Dazhen, vice-president of Kayou, said one study shows that once per capita GDP reaches around $10,000, cultural derivative industries tend to flourish, as they cater primarily to people's emotional and lifestyle needs.
"China's cultural and trendy toy industry has seen rapid growth in recent years. Kayou taps into the guzi economy through trading cards, badges, stationery, and other merchandise, blending culture with technology," Lu said.
By leveraging a diverse IP portfolio and smart manufacturing capabilities, the company transforms product consumption into unique cultural experiences. For example, ahead of the release of Chinese animated blockbuster Ne Zha 2, Kayou had engaged with the IP licensors while beginning product development.
Lyu Mei, head of strategic consulting with JLL East China, said the widespread adoption of digital culture and a shift in generational consuming preferences are redefining the concept of happiness.
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"Today's youth, who are growing up in materially abundant environments, view consumption more as a form of expression and participation. The guzi economy cares more about personal aesthetics, cultural identity, and community belonging, which makes it a great success," she said.
Liu Xiaobin, vice-president and chief marketing officer of Miniso, said consumer demand is shifting from seeking functions toward attending to emotional values.
"These days, people are not just buying stuff because it's useful; they're looking for things that make them feel good. Trendy guzi toys and collectibles give young people a quick mood boost and a break from everyday stress. Guzi-related communities also help them connect with others," Liu said.
