How Labubu dolls turned into a high-stake asset in the age of pop culture investing

Vijay Valecha, June 20, 2025, Finance Middle East

When the subject of investing is broached, one typically thinks of equities, bonds, real estate, cryptocurrencies, and commodities. However, another interesting form of investing has gained traction in recent years, one based on collectibles. These entail rare items that are highly demanded yet scarcely supplied, making them an ideal candidate for speculative investment. Rare coins, vintage furniture, and artwork are some of the most sought-after items that come to mind. However, articles inspired by pop culture have emerged as the latest fad, not just to flaunt within one’s social circle, but as a potentially lucrative investment pursuit rooted in principles of Behavioral Finance. The slightly eccentric Labubu dolls, manufactured by Hong Kong-listed toy maker Pop Mart, have created quite a stir worldwide as teenagers and businessmen alike scramble to get their hands on these feisty creations.

Viewing this trend through the lens of Behavioral Finance reveals how social influences, cognitive biases, and intense emotions drive people to treat collectibles as speculative assets. The artist Lung Kasing created Labubu in 2015, designing a family of elfish monsters with toothy grins. However, Labubu captured global attention in 2019 when the plush toys were produced in bulk for the masses. Soon after, celebrities across industries, from Dubai-based beauty influencer Huda Kattan to global music sensations Rihanna and Dua Lipa, embraced the Labubu trend. When K-pop star Lisa was spotted sporting different versions of Labubu, her followers went on a shopping spree, as her stardom compounded their popularity further. Given its cult following, Pop Mart’s annual report for 2024 showcased a 726.6% year-on-year spike in revenue to 3 billion yuan. The company’s overseas segment experienced a remarkable revenue surge of over 475%, significantly outpacing the more than 95% growth recorded in the Chinese market.

The purchase of Labubu dolls encompasses characteristics of both speculative investment and emotional spending.

Lottery effect and herd mentality – Initially popularised through a blind box purchasing model, it appealed to the “lottery effect” bias that drew people to the potential asymmetric payoff on a relatively small investment. Upon unboxing, those fortunate enough to land a limited-edition version could cash in their gains by selling it in the secondary market for a considerable premium. Labubu dolls typically retail for Dh300 in the UAE, with blind boxes carrying a heftier price tag of Dh1,500. Over in the US, purchasing one on resale platforms starts at $350 but can easily exceed $1,000. Stocks are always limited and are sold out within a very short period.

Fear of missing out – The FOMO syndrome has further amplified demand. Extensive coverage on social media platforms and videos narrating stories of adrenaline-pumping resales has generated a sense of urgency to participate in Labubu sales or risk missing out on what has now become a global investment phenomenon. This frenzy is either driven by the thrill of the chase or the prospect of earning a tidy profit by “flipping” a rare edition doll. The resultant herd mentality has inflated the perceived value of these dolls, driving sharp swings in prices on the secondary market.

The endowment effect and overconfidence bias – The considerable effort and financial investment involved in acquiring a limited-edition doll can disproportionately inflate its perceived value in the owner’s eyes. As a result, they might be reluctant to resell the doll unless compensated with a significant premium, perpetuating a feedback loop of perceived value in the market. This can reinforce an exaggerated sense of confidence in their ability to flip the dolls for profit, inspired by others’ success stories.

This bias makes it a high-stakes gamble rather than a rational assessment of potential risk and reward.

Instant gratification – Long-term utility plays a marginal role in governing such purchases. Instead, people pursue the immediate dopamine spike from acquiring a rare collectible, which drives emotional spending. This behaviour can be a coping mechanism for some during periods of high stress or a way to climb the social ladder by being perceived as “cool”.

From Non-Fungible Tokens (NFTs) to Pokémon cards, the transformation of consumption goods into speculative investments is propelled by artificial scarcity, heightened liquidity in the secondary market, and their evolution into cultural capital. The makers of these collectibles strategically limit supply to exacerbate their perceived value. Secondary markets, such as StockX and online rental platforms like By Rotation, offer investors good entry and exit options. Finally, ownership of rare collectibles is associated with high social status and standing.

Thus, it is no surprise that China’s IP goods market is projected to nearly double from 169 billion yuan ($23.2 billion) in 2024 to 300 billion yuan by 2029, potentially reaching $50 billion. Between 2019 and 2021, intellectual property-intensive industries accounted for nearly one-third of Hong Kong’s gross domestic product, approximately HK$878 billion, and generated over one million jobs.

Investors have also discovered arbitrage opportunities due to currency fluctuations or discounts in other geographies. Customs authorities, particularly in China, have caught travellers purchasing the dolls overseas and bringing them back into China to resell at a premium. Thus, Labubu’s success highlights how scarcity, emotional attachment, and herd behaviour can converge to drive outsized demand, reinforcing the decisive role of psychological biases in shaping consumer and market dynamics.

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Finance Middle East