The puppet challenging the Chinese banking system: the Labubu case
A viral soft toy used as bait for current account holders: this is how the fever for Pop Mart's 'little monsters' has turned the spotlight on the (desperate) strategies of Chinese banks
Key points
A sharp-toothed, pointy-eared little monster has wreaked havoc in the Chinese banking system. Its name is Labubu and, until a few days ago, it was the perfect bait used by some lending institutions to grab new customers in times of increasingly tight margins. Deposit 50,000 yuan (just over EUR 6,000) for three months into an account at the Ping An Bank and the customer would receive a valuable surprise box containing the coveted doll as a gift. But what appeared to be a brilliant marketing stunt quickly turned into a national case, prompting the financial regulator of Zhejiang province to intervene with a no-holds-barred ban: stop free gifts to attract deposits.
Regulatory clampdown: no more 'gifts' to buy customers
As Bloomberg reports, the National Financial Regulatory Administration (NFRA), concerned about the costs and risks of unorthodox practices in an already pressurised banking market, has ordered banks to immediately suspend any such campaign. Besides Ping An Bank, in fact, other banks were ready to ride the same wave to try to stem the drop in deposits, but for the NFRA 'this is not a long-term solution'. Not least because the problem is systemic:net interest margins are at an all-time low, deposit rates barely exceed 1 % and competition between institutions has become fierce. The use of gadgets and free gifts risked fuelling a dangerous spiral of rising costs in the face of volatile deposits.
The irresistible charm of Labubu
Born from the imagination of artist Kasing Lung, this character from 'The Monsters' series has become a global cultural phenomenon. With his cuddly and creepy look, and the mystery of the blind boxes that conceal the variant inside, Labubu has conquered online communities and international stars. From posts on TikTok (over 1.6 million with the hashtag #Labubu) to unboxings on Xiaohongshu (RedNote), the plush toy has fuelled an unprecedented collecting fever. The secondary market sees limited pieces sold for exorbitant sums. As the latest exploit shows: a 131 cm giant Labubu was auctioned in Beijing for 1.08 million yuan (over 130,000 euros), consecrating it as a luxury pop icon.
A market growing at a dizzying pace
The Labubu boom is not an isolated case, but the sign of a structural change in Chinese exports. Goods with a strong cultural component are in fact replacing traditional products with low added value. Pop Mart, the company that distributes the little monster, has seen its shares soar and revenues exceed 3 billion yuan (over EUR 360 million) with the 'The Monsters' series alone. The growth prospects are such that Deutsche Bank and Morgan Stanley have raised their share price targets to HK$303 and HK$302 respectively. The 'trendy toys' sector in China, meanwhile, is estimated to be worth more than 110 billion yuan (more than 13 billion euro) by 2026, with an average annual growth rate of 20%.
Banks between despair and creativity
It is not surprising, then, that at a time of economic stagnation and declining confidence in traditional banking products, institutions have sought refuge in more emotional formulas to appeal to a younger audience. As Shen Meng, director of the investment bank Chanson & Co. explains, "young customers no longer require mortgages or car loans, but they have more disposable income and represent the most attractive segment for retail deposits". But the temptation to tie loyalty to a simple gadget is a trap: customers could quickly shift funds to banks with more attractive incentives or better rates, making the effect of puppet-based marketing entirely ephemeral.
