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EP 31: Grace Mou explains PopMart's Labubu craze as part of China's brand innovation
40 Plays1 month ago
In Part 2 of a 4-part series, Grace Mou, Chinese trend forecaster and brand strategist, explains how China has emerged from its past of copycatting foreign goods and brands, and is now rapidly advancing its own innovation. Together with Auto Ethnographer host, John Stech, she discusses the so-called soft power of Chinese brands and the increase in their global export.
Grace explores the rise of the Labubu brand under PopMart, saying clearly that it is not a toy company but an intellectual property (IP) company. The nine-toothed creatures have taken over collectors’ hearts around the world thanks to sightings of many celebrities sporting them on their backpacks and handbags.
Next, she shines light on the internationally popular vertical dramas. These short 5-6 minute videos are part of a 50-60 part series watched on the phone in portrait position, hence the “vertical drama” name. Developed during the pandemic period as a form of advertisement, they quickly developed into an entertainment medium of their own.
Lastly, we cover the “instant commerce war”, a name given to Chinese hyper-advanced on-line shopping where convenience is the master. A consumer sees something, clicks, and thirty minutes later there is a knock on the door by the delivery person. This convenience does bring a danger of overspending, something that budget-wary Chinese consumers must keep in mind.
These are just three examples where China’s innovation is leading the world and is driving demand beyond its borders. This thirty-minute episode scratches the surface of this development but promises to open eyes about the speed and direction of innovation.
You can read Grace Mou’s weekly blog with further culture insights here https://www.grace-creativity.com/blog.
You can also follow Grace Mou on Substack at https://substack.com/@trendculturebrand
To learn more about The Auto Ethnographer, visit the homepage at https://www.auto-ethnographer.com
You can also follow on Instagram or Facebook for a daily “Unusual Cars in Unusual Places” post. For Instagram click here.
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Transcript
Introduction to Auto Ethnographer Podcast
00:00:00
Speaker
Because the e-commerce in China was so advanced, they use a lot of the technology and a very crazy ideas to promote a product and the sales online.
00:00:11
Speaker
Hello and welcome to the Auto Ethnographer. I'm John Steck, your host on this journey. We travel the globe to bring you stories about culture and the global automotive industry. Fasten your seatbelt and let's get started.
Series on China's Market Trends with Grace Mo
00:00:25
Speaker
Hello and welcome to today's episode of The Autoethnographer. This is the second of a four-part series on marketing and consumer trends in China. Together with Grace Mo, we kicked off the series by setting the stage on Chinese demographics and the social economic strata.
00:00:43
Speaker
Today, we talk a little bit about China's cultural soft power and its global perception. Again, guiding us through these four episodes is Grace Mo. She's a trend forecaster and brand strategist whose career has mirrored and shaped China's extraordinary transformation over the past two decades.
00:01:03
Speaker
She's born and raised in mainland China and has worked with many global giants, as well as some of the rising Chinese challengers, helping them navigate the country's fast evolving consumer landscape.
00:01:17
Speaker
She publishes a weekly blog, something that I encourage you to subscribe to and read, and I'll be putting the link to that in the show notes.
China's Cultural Soft Power: From Imitation to Innovation
00:01:27
Speaker
With that, I'd like to welcome Grace Mo onto the show. Hello, Grace.
00:01:32
Speaker
Hello, John. Thanks for having me today.
00:01:36
Speaker
It's great to talk. I know since the last recording that we did, both of us have had a cold, we've been sick. So perhaps our voices will sound a little bit different than the last episode.
00:01:47
Speaker
Last time we talked a little bit about the socioeconomic strata, the rise of the middle class in China, the current, let's say, precarious position, a little bit unsteady position of the middle class, and some trends developing such as a shift towards more rural areas.
00:02:10
Speaker
and We also talked about high net worth of individuals. and their role in driving forward the Chinese economy and consumer economy. This time we wanted to talk about cultural soft power and global perception of of China.
00:02:28
Speaker
And In the past, certainly China was famous or um I think I can almost say infamous for copycatting culture and products, but that's really changing dramatically now from from imitation to innovation.
00:02:45
Speaker
Can you talk a little bit about this development, how it's shifting from copying to innovation? And you have the great example of Popmart and their famous Labubu brand.
00:03:00
Speaker
Maybe we can dive into that one and and really explore that one for a little while. Yeah, I would love to tap into this topic because and before 10 years ago, when we just talk about China, there are people want to just mention innovation, that China is a country of innovation.
00:03:20
Speaker
We just don call China is a copycat country.
Popmart: A Case Study in Cultural Export
00:03:23
Speaker
we They just mentioned that China stealing ideas from other countries, and that we sell copycats and the counterfeits or around the globe. That's where we got the nickname of stealing country or something like that.
00:03:39
Speaker
But things changed fast in the first ah you know recent years and the China rise and prove to the world that China is a country of for innovation.
00:03:49
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And the ah one very famous and well-spread article wrote written by American academia from Harvard University, if i correct her remember correctly, they mentioned the the China shock second.
00:04:07
Speaker
They ah just mentioned that China just ah shocked the world for its innovation on AI technology and the EV and the biotech.
00:04:19
Speaker
But here, I don't want to just so repeat to what the academia mentioned for EV, AI or biotech. ite I want to just mention the software power, which I just observed the a ground.
00:04:33
Speaker
I'm just ah is a trend forecaster and the future predictor and the I for ah force it. And i just the wondering I'm wondering whether soft power will be the next China shock to the world.
00:04:50
Speaker
ah As you just mentioned, there are some Chinese brands and the Chinese innovative concepts ah are are exporting China's soft the power, the culture, to the world. we just mentioned, the Pogomart is a very good example.
00:05:07
Speaker
And their Labubu becomes a world cultural phenomenon, just encouraged by the world celebrities like Lisa of Blackpink.
00:05:19
Speaker
So that is a quite a cultural phenomenon, and which means that China has a capability to export the culture and the software power to the world.
00:05:30
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And maybe that is a sport we can keep close eye on for the future development which happening in China and will spread outside of China to the world.
00:05:46
Speaker
So you're absolutely right. it's It's funny to see on the television news how celebrities around the world are crazy about the labubu and trying to collect them. quite Quite famous names.
00:06:00
Speaker
um How did it get started? Was was Popmart, the the parent company of the Lububu brand, did they set out to make this an international brand or or did it start in China and somehow it just caught fire with with um popularity and spread beyond the Chinese borders? Was it by plan or by accident?
00:06:25
Speaker
I don't think ah it is planned because it becomes a cultural phenomenon famous ah around the world and the you and it promoted spontaneously by world is celebrities. I don't think that that's an accident, but it is not planned either.
00:06:45
Speaker
And you just look at the business model of the Pop Mart, you will be surprised. It is not the toy company, it is an IP company. I call it is IP innovation company because they bought a lot of ah IP from the various artists around the world the and up they use this IP to just ah to sell the product ah and the one of the famous product is La Bubu, which actually is not inspired from Chinese folklore or legends.
00:07:19
Speaker
the La Bubu, according to the creator of Hong Kong, a very famous, not very famous Hong Kong artist, he mentioned that La Bubu was inspired from Nordic folklore.
00:07:34
Speaker
So it is the the story itself has no Chinese cultural gene. And PopMod uses this a cultural phenomenon because uses the Chinese factor.
00:07:52
Speaker
which is not associated with geopolitics and the Chinese tarnished image around the world. That's a very smart move. It used universal appeal instead of a traditional Chinese elements to push this cultural product ah into the world, which was luckily ah highly encouraged and promoted ah by famous celebrities around the group, like Blackpink's Lisa, who is the first one to wear la bubu as a background around the group tour. So that's a fascinating thing.
00:08:34
Speaker
No, I think you're you're absolutely correct. I think most people, if I think about the United States, probably do not know that labubu originating from China unless they ask or if they look it up.
00:08:48
Speaker
Yeah, actually, that is a very smart move. When you just mentioned Popomart, you won't just associate it with a Chinese company. That's a very smart move.
00:08:59
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And actually, when you just look at Popomart's origin, that is a very humble story. They started a very small and selling some products. Japanese toys and some very small toys. But the the smart thing, the thing they made it right is they buy the IP.
00:09:20
Speaker
That is the magic. They just and let the business fly.
Blind Box Strategy and Consumer Engagement
00:09:26
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float off ah so make them successful around the globe and the one thing i have to mention this is popmat aside ip innovation they use blind box to entice the consumers and hook them repeat buying the product and the toys so that's very smart
00:09:54
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It's almost like using the hook, like getting somebody hooked on social media or on some sort of an app that requires continued participation.
00:10:08
Speaker
People keep buying and buying and buying. Yeah, you never know what's inside. Sometimes they even just ah use the ah hide the ah hide the ah hide one. They call the nin chang man.
00:10:22
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That is different from the original versions. They use a hidden version to enhance this a surprise and the unexpected. So...
00:10:33
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People are crazy about the blind box concept. I don't know where this concept come from, but they very smartly use this as a hook to let the consumers keep buying.
00:10:48
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and And the ironic part, of course, is that the Lububu has become so famous, there are actually now copycats in different parts of the world trying to copy the Lububu.
00:11:00
Speaker
Do you know how to identify the authentic one? I've heard that there are a couple of of things that you can use as a guideline. Can you share those? Yes, there is a secret ah which is well known right now because there are lot of counterfeits around the globe for labubu.
00:11:19
Speaker
And the method is very clever. You have to count the how many teeth your labubu has. The authentic one has nine tooths.
00:11:32
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so that So that's a secret one. So after i heard this story, I counted my labubu and the actually he has my tooth. So which proves that my labubu is authentic.
00:11:44
Speaker
Okay, so you have one, but only one? Yes, I have one. I only have one, which he was given as a gift to by my friend. Even though I'm not a fan of La Bobo, and I was very happy to receive this gift tip because because it's a hype.
00:11:59
Speaker
And when you wear it, it's like a social currency. You got the proof from the society. People love it, and you have it You have the social currency around it. Well, it sounds like I'm missing the entire movement. I better go out and get one.
00:12:16
Speaker
You'd better have one. They have the smaller one. That is a very important for you. Just a very smaller one, which is a better suit for the bag, which is smaller. I think definitely I have to follow up on that one with the Labubu.
00:12:33
Speaker
We had also, ah speaking of of smaller size, there's also the small...
China's Vertical Dramas Go Global
00:12:38
Speaker
screen size um and videos and and and watching trends develop coming out of China. And and you and I had previously talked about um vertical dramas.
00:12:52
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And you know it's a series, a video series that's watched on the phone in extremely short episodes. I think there are 50 60 episodes in the season.
00:13:03
Speaker
And probably most people who watch them in Latin America, in the United States, Southeast Asia, they don't even know that this concept started in China.
00:13:15
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Can you talk a little bit about the vertical drama, how they developed and did that become a global phenomenon as well? Because this is really another great example of a Chinese soft power export.
00:13:29
Speaker
Oh, that's a fascinating story. Actually, you know that the Chinese e-commerce yeah it becomes a playbook for the worldwide ah to take load off because the e-commerce in China was so advanced.
00:13:44
Speaker
They use a lot of the technology and a very crazy ideas to promote a product and sales online. So actually the vertical drama is called a mini drama, which you it was originated in China around the 2020 and the ah originally driving by two e-commerce platform like Douyin, Chinese TikTok and Kuaishou to promote or product sales online.
00:14:14
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And the It lasted about, originally it only lasted one or two minutes, but later on it evolved into a dominant digital format and professionally produced and made for mobile reviewing.
00:14:31
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ah Actually in China, people watch a lot of mini dramas and they call it a shang ju, like a feel-good drama because they use a lot of dramatic twists and tricks and ah to hook the people, glue on the screen when they just swipe their smartphones.
00:14:55
Speaker
I've heard ah from ah ah person that I have partnered with in the film industry before that the vertical drama, the the acting quality is not the greatest acting quality. The the plot and the story is often quite similar between the different ah the different shows, but that they make it extremely addictive. It's it's impossible not to to watch the next one, I understand.
00:15:23
Speaker
Yes, that's true, because they ah they specifically designed the for the mobile users. You only just watch it yeah considering the attention span is so short and the people cannot stand a video lasting for 30 minutes. so their attention span only can tolerate less than 10 minutes.
00:15:48
Speaker
Maybe five or six minutes is perfect for them to get involved they into this ah drama. So normally only is ah the vertical drama lasts five to six minutes per episode to hook the viewers the to glue on the screen to enjoy the melodrama.
00:16:09
Speaker
And the winning formula is always like those shangju, feel good drama ah formula, like a dominant team, CEO, falling out with me, or this kind of a 50 Shades of Grey style episode, which is most popular among the masses, especially the mobile viewers.
00:16:32
Speaker
And is this something that the viewers pay for or is this for free? how How does the um ah drama, vertical drama producer, how do they make money?
00:16:48
Speaker
I'm not just ah diving into the payment episode, but I assume when you just look at the vertical drama production, APP, there is a very famous one called the rio Real What? I have to check it out.
00:17:04
Speaker
Yeah, after maybe after couple of episodes, you have to pay, but the first two or somewhat to you don't, it's for free. Maybe that's a formula, but I have to be to check.
00:17:17
Speaker
And the most ah for most ah vertical dramas, popular ones are free in China. Okay, so they're free. And then they, do they have advertising built into it or or some some other method of monetization?
00:17:34
Speaker
a I think so. I think so. Because the original idea for mini drama is to sell the product. ah I cannot say why they wasted this opportunity to promote ah their product or service.
00:17:52
Speaker
So very smart, like the product placement, why not? Well, i'm I'm starting to understand from this podcast conversation that I'm very uncool because I don't have a labubu and I do not also watch the the vertical dramas.
00:18:09
Speaker
I'm not so well educated on those. Now, as as those have also gone to an export market, um are they Are they Chinese actors and and then they use ah language subtitles or dubbing on the voices? Or have these now has the concept now spread across the globe and they are hiring actors in different parts of the world to appeal to you know different audiences?
00:18:42
Speaker
Oh, actually, that's a very interesting question, John. And in China, they have their own production of vertical drama, but in the U.S., they have a different production line and they hire American actors and they use different versions of stories. So the concept ah was originated from China, but the story was twisted and adapted ah to the local culture. In the US, there may be any dominant CEOs to ah adapt to to the US culture and delete the Chinese element. But in the UK, maybe the audience will get used to Mr. Darcy.
00:19:28
Speaker
So... they They use different versions and storylines to appeal to the local people instead of one storylines. But the formula is the same.
00:19:40
Speaker
and That's fascinating. So it's it's really an innovative new ah entertainment platform that probably nearly nobody understands is is originating from China.
00:19:52
Speaker
if If you're in Latin America or in the US or Europe, you you probably don't even know. Yes, they forgot ah it is originated in China, but it is originated in China. So that's very smart.
00:20:06
Speaker
So the Chinese people don't know that it is from China, but actually the whole production team and the people behind ah Chinese companies and the Chinese people.
00:20:21
Speaker
So it sounds really like there's there's a lot of innovation being developed to there. Something which is is it a big shift as we started off talking about it from the past with with the copycatting.
00:20:33
Speaker
Yeah. Oh, great. Obviously this ah is based heavily on technology, right? that The delivery of the vertical dramas. um Technology plays a huge role in Chinese society, right? With AI, live streaming, commerce, digitization of of of your daily life. and And those are all part of lifestyle drivers in in China.
00:21:01
Speaker
You've called this a retail revolution or even an instant commerce war. Can you explain to the listeners what you mean by that and and how people have integrated technology into their daily lives?
Instant Commerce and Consumer Behavior in China
00:21:15
Speaker
Yeah, as I just mentioned, the e-commerce platform was so advanced, is so advanced in China, which she becomes a playbook for the world to follow.
00:21:27
Speaker
And in the past, in this summer, this heated summer in June, and and July and August, that we have ah instant commerce war erupted in China between the three giants.
00:21:44
Speaker
players like jindong kong alibaba and the meituan they have pledged the millions of ah dollars millions of dollars to subsides to intense consumers and merchandise and either this ah instant commerce will reach this peak on june and has been reaching into the August with no end in sight.
00:22:11
Speaker
It's ah quite a phenomenon happening in China. Can you imagine you can ah during this instant commerce war, you can pay one RMB to buy a huge cup of iced lemon tea for only one RMB. So that's amazing.
00:22:31
Speaker
because the instant commerce war. And they use a lot of technologies to support the ah the welfare, as the warfare warhouse.
00:22:43
Speaker
And they can manage, use the technology to manage, it to deliver ors the product and the service within 30 minutes. That are quite in advanced technology involved ah in this instant commerce war.
00:23:01
Speaker
So based on our conversation in the first episode, where consumers were starting to look very carefully at their spending, this is clearly an effort to help keep them spending, to help keep them ah purchasing and and keep the business running with these with these retail giants.
00:23:24
Speaker
You are absolutely the right. And you know why they pledge billions of dollars into this world. The reason behind it is that is they want shape future consumer behaviors.
00:23:38
Speaker
There is a hypothesis. It is about nurturing the consumer's behavior. and for immediate to gratification, get what you want.
00:23:49
Speaker
And the when you want, the hypothesis behind the is that once you get hooked on this level of convenience, and then you will become addicted to make a more frequent and spontaneous purchase online,
00:24:06
Speaker
for the instant commerce to get a huge profit from your instant, spontaneous, and the frequent behaviors because of the immediately gratification needs.
00:24:22
Speaker
This sounds like it can be ah a great idea in the short term. for these commerce companies. um But it sounds like it could also be a ah maybe a little bit dangerous, a slippery slope for the consumer in terms of their spending habits getting out of control based on you know being addicted to this you know type of instant gratification.
00:24:48
Speaker
It's very dangerous actually for the consumer side. It's very dangerous because once you are hooked to this high level of convenience, you can get rid of it. you will keep spending more and the more on those tiny, since tiny expense, but actually in total it ah accumulated to a huge amount of money.
00:25:13
Speaker
Consider maybe 10 QI RMB for a cup of coffee, then you just purchase ah three cups or four cups of coffee a day.
00:25:24
Speaker
Guess what? It is about 40 RMBs slipped away without your notice. Yes, it it adds up quite quite quickly.
00:25:36
Speaker
So you have the um convenience and the speed of the technology. It's it's so easy to use. um and And I understand, of course, that in China, there are many very convenient and easy payment methods that are that are built into your phone and and various apps that that help to make this even even faster.
00:25:58
Speaker
That's very dangerous. and you You are correct on this point because China becomes a cashless society. People are getting used to pay online, use these apps like WeChat and Alipay on their mobile. is that we I don't just ah carry a ah purse around when I just...
00:26:19
Speaker
in the city or go shopping. I pay it through my mobile. Very convenient. So it is dangerous because you just, your money disappears instantly in front of you without your notice.
00:26:33
Speaker
You just to pay on mobile. So very dangerous. You are correct. So ah we assume that the technology companies ah be responsible. Don't hook the consumer to spend too much.
00:26:48
Speaker
But to Actually, I don't know. It's a very fierce competition. If you don't do it your competitors will invest a lot of money on it.
00:26:59
Speaker
So, hard to say. Yes.
Recap and Upcoming Topics
00:27:03
Speaker
So as we as we wrap up this short episode, part two in our conversation, this one on soft power and culture, it it sounds like the three main topics we talked about. The culture wrapped up around the Pop Mart and the Labubu, the vertical dramas on the phone that you can watch and subscribe to, as well as the last one, the technology in in this um instant commerce war.
00:27:33
Speaker
it it sounds like all of them are designed to help the consumer spend and and to to get them addicted to something, ah whether it's a physical product or entertainment, in order to continue to to get the consumer to spend money. That seems to be the common thread between these three different developments.
00:27:57
Speaker
ah You can see that they just use technology to encourage people to spend them more frequently and the more on the product and the service. But ah on the other hand, they provide ah infinite possibilities for the opportunities for the merchants.
00:28:20
Speaker
The Chinese economy is going slower than before. So this also we just provides a lot of possibilities to make money for those ambitious merchants and the brands.
00:28:37
Speaker
Two sides of one coin. Absolutely two sides of one coin. And it seems to open up the borders in terms of um being able to to make those earnings overseas with something that apparently people from many different cultures are able to be attracted to these these products.
00:28:58
Speaker
Again, whether it's physical product or or a um entertainment product. Yes, absolutely. If you are getting used to this convenience provided and offered by high technology, why not?
00:29:14
Speaker
It's a super convenience. That is the offer bliss of the modern society. Great. Well, thank you very much, Grace, for joining again for this second part in our four-part series and talking a little bit about the the technology and the products and the soft power through brand from China.
00:29:36
Speaker
Next week, we're going to come back together and talk about electric vehicles and how the Chinese electric vehicle brands have taken over the market and how this is also causing a ripple effect a ripple effect across the globe.
00:29:53
Speaker
I would love to mention about the EV market. That's a fascinating topic. Thanks for having me, John. Yeah, you're very welcome. And we'll be back next week for another episode to talk about those electric vehicles.
00:30:08
Speaker
In the meantime, thank you to all the listeners for joining us this week. Until next week, keep on driving. Thank you for joining us on today's journey.
Engagement and Social Media Interaction
00:30:20
Speaker
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