China's Emotional Economy

Recent data reveals that Chinese consumers are "increasingly spending on goods and experiences chosen for their emotional resonance over practical value," states a CNBC article. Yet Chinese consumers' preferences for items that aren't the most value-for-money isn't a novel phenomenon. In fact, since 2024, when the Labubu figurines were in high demand, it was evident there was a significant consumer group that was "buying feelings," states the CNBC article.

While consumers constantly search to make purchases of value, "value" equally encompasses emotional return as it does price. Why so? The "Hub of China" writes that younger consumers "expect brands to align with their worldview." 

This has impacted brands, forcing them to connect with consumers emotionally, not just functionally. Rather than solely marketing what a market does, businesses have pivoted their marketing campaigns to include discussions about how products fit into their lives. However, this poses the risk that business over-promise feelings, which can lead to disappointment among consumers. Additionally, not all consumers weigh a product's emotional return just as much as its functionality; in fact, "price-sensitive groups still value practicality." Moreover, there are regulations that can set limitations as to "how far emotional narratives can go," concludes the "Hub of China."

The beauty, wellness, lifestyle, food and beverages, and fashion brands benefit most as a result of China's emotional economy; these categories tend to resonate with consumer emotions. 

Moreover, the designer toy market has heavily influenced the rise of China's emotional economy. In the 1990's, a toy movement arose in Japan and China, giving rise to Kaws figures and Bearbrick toys, and "paving the way for later viral hits such as Jellycat in the 2020s," stated "The World Of Chinese." Young adults are not the only age group to blame for China's emotional economy; rather, "kidults," otherwise known as adults who play with toys, are responsible as well. 

Today, plush toys (maorong wanju in Chinese) are "one of the most popular categories on the designer toy market." Plush toys rekindle feelings of childhood among their consumers. 

Yang Yulong, the founder of a magnetic plush toy startup in China, Black Button, believes that Gen Z seek "content that resonates with them" because they are "becoming more and more isolated," having grown up with devices, such as phones and I-pads. Professor Lian Si at China Youth University of Political Studies in an academic article in July, wrote that "seeking a certain sense of self in an uncertain world has become a universal experience for young people growing up today."

A report by data analysis firm iiMedia Research even estimates that "China’s emotional economy has reached a market size of 2.7 trillion yuan in 2024 and is projected to exceed 4.5 trillion yuan by 2029, spanning industries from designer toys and pets to online games, immersive tourism, and beyond."

Many data scientists describe the U.S. to have an "emotional economy" as well. An article written by "reveconsulting" writes about the underlying issue of chronic loneliness in the U.S., which doesn't just impact mental health, but it affects consumer behavior as well. A Time Magazine article states that "studies show that lonely people spend more time shopping online, seeking parasocial relationships with influencers, and gravitating toward brands that foster community." It is evident that China is not the only country with an increasingly "emotional economy."