U of GH explains: The phenomenon of the Labubu toy craze

Pictured above: Dr. Alice Kim, Chair of Psychology, holds a Labubu toy

You may have noticed a fuzzy accessory dangling from people’s bags lately. With the flash of a toothy mischievous smile, cartoonishly large eyes and ears, and a furry body, Labubus – the name of a toy monster that’s often on a keyring – are seemingly everywhere. From becoming a trendy trinket, to the subject of addictive TikTok unboxing videos, Labubu has clawed its way to the forefront of pop culture.  

The demand for these toys has skyrocketed; product is consistently selling out from official Labubu retailer Pop Mart, resellers have been taking advantage of the buzz with marked up prices (retail price is around CA$37, often resold for around CA$50-$90+), and with perceived scarcity, owning a Labubu is viewed by some as a status symbol. 

To help demystify hot topics and trends such as Labubu, instructors at the University of Guelph-Humber (U of GH) can offer expert insight and analysis. U of GH Business instructor Charlie Janthur explains why these toys are so in demand.

Labubu mania

Getting your hands on a Labubu is no easy feat when they are constantly selling out. 

One of the fundamental principles of economics is supply and demand, Charlie says. This means when the demand for something increases, then its price increases, and when the demand for something goes down, then the price goes down. Similarly, if the price of something goes up, then its demand goes down, and if the price of something goes down, demand goes up. This is where scarcity marketing of Labubus comes into play. 

“Scarcity simply means that there's a lack of supply in the market, and therefore, the price of the product then goes up,” he articulates. When the demand is seemingly surging, resellers will mark up the price to maximize profits, since the public has an appetite for consumption.

But this isn’t the first time this phenomenon in the toy market has been seen. Charlie says that society has seen it in previous decades with Cabbage Patch Kids dolls or the frenzy to collect Beanie Baby plushies. It also stretches beyond collectible toys; he uses the examples of concert tickets (think: Taylor Swift’s Eras Tour) and the sneaker industry, where coveted products are selling out rapidly, so the price goes up – and fans are left wanting more. 

Click on the Instagram video below to watch a Labubu unboxing:

Is Labubu a recession indicator?

Creators on TikTok have speculated that Labubus are a “recession indicator.” This follows the idea of the “lipstick index” – when there’s a recession and money is tight, people will purchase smaller luxuries like a tube of lipstick, versus making big purchases like a new car or a vacation. Charlie says this is not necessarily the case with Labubus. 

While a Labubu doesn’t cost as much as a designer handbag or a trip to the Bahamas, he says there are more precise economic tools and indicators that decipher if a recession is looming. Labubu serves instead as “instant gratification” for consumers, he says, especially since it often comes in a “blind box,” meaning it’s a mystery which variant of the toy the consumer will get until they open the package. 

“People want instant satisfaction,” Charlie explains, likening the adrenaline of cracking open the box and finding that elusive Labubu to complete a collection to the addictive thrill of scrolling on social media. “It’s the rush. It’s the thrill of the unknown. The thrill of the chase. We’ve seen it with [collectible] cards, like hockey or baseball cards, or Pokémon cards.”

Is the demand sustainable?

No, the hype-driven scarcity model is not sustainable over a long period of time, Charlie believes. Labubu is part of a trend cycle, like many other products – a fad that he predicts will one day fall into obscurity.  

“There was this absolute chaos around [similar trendy items] that lasted for about a year or two. And then suddenly, the fad disappears and then people are on to the next thing,” he explains. “Products go through a development phase, and they go through a phase of educating the public and getting traction in the market until it reaches what's called its ‘maturity point,’ which is where it's accepted in the market.”

Charlie says he’s curious to see where the Labubu trend will be a year from now. Will these still be in demand? Only time will truly tell if the fad will Labu-burn out.

To get in touch with a University of Guelph-Humber expert, please contact:

Caroline Grech, Department Head, Communications and Public Affairs, caroline.grech@guelphhumber.ca 

Erin Alvarez, Manager, Communications and Public Relations, erin.alvarez@guelphhumber.ca