‘Hype stage’: Warning as Labubu craze continues to sweep across Australia

The Labubu craze has well and truly hit Australia, but it’s a growing trend linked to the toy that has prompted a fresh warning.

Australia has well and truly been swept up in the Labubu craze, with people across the country going to extreme lengths to get their hands on the fuzzy, bizarre looking monster toys.

We have seen people line the streets at 3am, wait in queues for up to 12 hours, pay others to camp outside stores and cough up exorbitant prices to score “rare” versions of the toy.

Labubus, designed by Hong Kong-born artist Kasing Lung and sold by Chinese toy company Pop Mart, first became available in Australia in 2023 when the company opened its doors Down Under.

Over the past 12 months, the demanded for Labubus has skyrocketed, sending Pop Mart’s stock up over 500 per cent in the past year.

An increasing number of celebrity endorsements have added to the hype, with Rihanna, Dua Lipa and Kim Kardashian among some of the famous faces seen sporting this viral accessory.

Dua Lipa was seen sporting the accessories. Picture: Instagram

Kim Kardashian shows off her collection. Picture: Kim Kardashian/Instagram

Now, there are 11 Pop Mart stores in Sydney, Brisbane and Melbourne and, on any given day, you are likely to see a line out the door.

Prices for Labubus range from around $20 up to $1580 for the ‘mega’ version of the toy.

They are still in such high demand that, at the time of writing, all Labubus featured on the Australian Pop Mart website were out of stock.

This demand has created a booming market for resellers, with Facebook Marketplace flooded with people selling rare and limited editions of the product for majorly marked up prices.

In Beijing, a four-foot tall edition of the toy recently sold for $A230,000 at auction.

Facebook Marketplace has been flooded with people reselling the toys for massively marked up prices. Picture: Facebook

People are desperate to get their hands on ‘rare’ Labubus. Picture: Facebook

However, anyone considering treating the hype around the product as an investment strategy has been warned to think very carefully.

While there is no doubt there are collectable items that can increase in value over time, treating Labubus in this manner is a risky move.

NAB’s Director of Investor Behaviour, Gemma Dale, told news.com.au that it is safe to say once something reaches the “hype stage”, the longer term returns are unlikely to be very impressive.

“It’s not an investment in the traditional sense, where it is generating an income stream for you and you can trust that it will be something to rely on in your retirement,” she said.

Ms Dale noted the “critical point” is Labubus were originally designed as toys and the expected value after its lifetime as a toy is zero.

“You should assume that it’s expected value over time decreases, not increases,” she said.

When you compare this to investing in shares in a profitable company or buying an investment property that will go up in value and where you will receive rental income, the difference is very clear.

One is generating an pretty reliable income stream, the other is hard to value and is often driven by hype, scarcity and emotion.

Ms Dale notes the pattern is usually the same: prices spike, then fall when the hype eventually fades.

For those that are buying Labubus purely for enjoyment, this doesn’t matter, but it shouldn’t be confused with a long term wealth strategy.

One significant reason behind Labubus’ popularity is that they can be bought in a blind box, meaning you don’t know what type you are going to get, with the possibility it could be one of the “rare” items.

“I think a large element is the anticipation of something that is unknown. If you can walk in and buy the expensive one off the shelf, there wouldn’t be any excitement,” Ms Dale said.

“Because it has become a craze, there is this very real fear of missing out.”

Things like unboxing videos on social media and childhood nostalgia also play a part, which is why it is typically young adults you see lining up to get their hands on these products, rather than just children.

“The other thing is, they’re not super expensive. A lot of the traditional investments feel out of reach and perhaps feel a bit adult and a bit boring. This is $20 or $50, depending on which one you buy,” Ms Dale said.

There are now 11 Pop Mart stores across Australia. Picture: Josie Hayden

However, there are still plenty of investment strategies that appeal to younger Australians, while not being as risky as putting all your money into Labubus.

Data from NAB shows that many Gen Zers are already savvy investors.

Exchange Traded Funds (ETFs) have become particularly popular, with at least 40 per cent of Gen Z and 34 per cent of Millennials owning at least one ETF.

Traditionally, young people have been seen as more aggressive risk takers, tending to be more speculative in their approach to investing and trading.

However, NAB’s data shows that the newer generation are changing this image, being more considered in their approach and more likely to buy and hold compared to their older counterparts.

“We’re seeing young Australians take investing and budgeting seriously and that’s encouraging,” Ms Dale said.

“If you’re looking to grow wealth, consider diversified investments like ETFs, which you can buy on the ASX with as little as $1000 using a platform like nabtrade – these offer exposure to assets and long-term growth potential.”

Originally published as ‘Hype stage’: Warning as Labubu craze continues to sweep across Australia