The secret to Labubus’ success? China’s ‘blind box’ craze

Even Confucius is getting in on China’s “blind box” craze.

At the main temple in Beijing to China’s greatest sage, the souvenir shops sell a range of “blind boxes,” gifts packaged in such a way that buyers don’t know exactly what variety of the item they’re purchasing until after they commit.

One popular blind box at the store is an ice cream treat with a blessing from Confucius. Worshippers pay $4.50 and, only after unwrapping the dessert, read that they are a top student or are destined to have a splendid future.

The mania over mystery boxes is catching on across the economy with everyone from travel agents to supermarkets offering their own versions. Fliggy, Alibaba Group‘s travel services platform, is offering “blind box” flight tickets as low as $64 for a round trip to Japan where travelers select a Chinese departure city and get assigned one of multiple options for dates and destinations.

Beijing-based Pop Mart has been at the forefront of this phenomenon. It’s the company behind Labubu, the elf-like monster doll created by Hong Kong Dutch artist Kasing Lung. Labubu toys are sold exclusively through the collectibles company, driving massive profits, and they’re sold in the same blind box format that can encourage repeat purchases to get just the right one.

Ruan Yue, a 23-year-old student, says she spends $55 a month on blind boxes — and enjoys the gamble. Ruan owns 150 Labubu and other dolls from mystery packaging.

“The moment you open the box if it’s a version you want or a limited edition, you get so excited,” she said. “And it’s something I can afford.”

Prices for Labubus and other characters sold at Pop Mart average anywhere from $9 to $30.

Blind boxes, or “manghe” in Chinese, increased in popularity in China during the pandemic. Pop Mart livestreamed the toys and sold them online and in vending machines at a time when the Chinese population was under constant threat of Covid lockdowns.

Young Chinese consumers, feeling down because of the pandemic controls and slow economy, turned to budget-friendly splurges for a pick-me-up. Buyers could trade toys or earn bragging rights if they were lucky enough to score a rare version coveted by their peers.

Chinese retailer Miniso, which is listed on the New York Stock Exchange, offers blind boxes of watches, adhesive tape, stationery and ballpoint pens.

Retail staff at Miniso told CNBC that curiosity about what’s inside convinces customers to try their luck and ultimately to keep buying.

The Chinese government, however, has warned through its state media against “irrational consumption” and blind box “addiction.”

The People’s Daily in June called for stricter regulations of the trend especially for children. Quoting experts, the official state newspaper reported the practice was a “‘commercial trap’ that precisely targets the psychological vulnerabilities of minors.”