Young Chinese consumers are increasingly spending on products that evoke feelings rather than practical utility, fueling a fast-growing "emotion economy" [1].

This shift in consumer behavior reflects a broader psychological trend among Gen Z and millennials who prioritize excitement and comfort. As traditional markers of success become harder to achieve, these low-cost emotional rewards provide a sense of fulfillment and mental relief.

The trend is most visible in the popularity of blind boxes and collectible toys, with companies like Pop Mart and the Labubu brand leading the market [1, 2]. These products leverage the thrill of the unknown, as buyers do not know which figure they are receiving until the package is opened. Beyond toys, the emotion economy encompasses gaming, immersive experiences, and the consumption of milk tea [1].

Market acceleration occurred throughout the early 2020s, with significant reporting on the craze appearing in mid-2025 [2, 3]. The appeal lies in the ability of these goods to offer a temporary escape or a curated emotional experience, which consumers value more than the physical function of the item [1, 2].

However, the rapid rise of this sector has attracted government attention. In July 2025, reports surfaced that China slammed "blind box" addiction, suggesting a period of strong regulatory scrutiny [3]. This tension highlights a conflict between the commercial success of the industry and public health concerns regarding addictive spending habits.

Despite these warnings, some industry observers remain optimistic. By August 2025, analysts said that fears regarding regulatory headwinds were overblown [2]. This suggests that while the state may monitor the trend, the underlying demand for emotional consumption remains a powerful force in the domestic economy.

“Spending is driven by products that evoke feelings rather than pure utility.”

The rise of the emotion economy signals a pivot in Chinese retail from material accumulation to experiential and psychological satisfaction. For global brands, this suggests that targeting the youth demographic in China now requires a strategy centered on 'emotional value' and 'surprise' rather than traditional quality or status markers. The volatility of the regulatory environment remains the primary risk for companies scaling these models.