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CNBC
3 hours ago
- CNBC
Pop Mart's Labubus boost China's soft power as Beijing brands find global appeal
For years, China had an image problem it couldn't shake off — synonymous with cheap exports, heavy censorship, and a state shrouded in secrecy and scandal. That has been changing as the country strives to burnish its image, rising in soft power rankings, with domestic businesses helping Beijing secure a significant facelift. Chinese coffee chains are popping up in New York. Chinese video games are generating billions in revenue. Even Chinese makeup, or "c-beauty," companies are expanding into global markets. But the most surprising factor boosting China's cultural rise isn't a flying car, an AI model, or a bestselling game — it's a toy. Labubus are everywhere: Pop Mart's ugly-cute $30 keychain has been spotted on the bags of Rihanna and K-pop band Blackpink's Lisa, with the plushie attracting hundreds of thousands of fans worldwide. Just a few weeks ago, Pop Mart opened its first store in Germany — the latest addition to its more than 500 stores across the globe. Pop Mart's viral blind boxes — items sealed in mystery packages — have become the hallmark of one of China's most aggressive international growth stories. The company has forecast a 350% year-on-year jump in profit in the first half of the year. Goldman Sachs estimates that over the long term, Pop Mart's sales could reach $11.3 billion globally, the same level as Lego sales. The company is even taking on Japanese legacy brands such as Sanrio and Bandai. In 2024, Pop Mart sales rose 107%, while Sanrio, home to Hello Kitty, reported a 45% jump. Pop Mart's success isn't a fluke. It's part of a deliberate strategy that's been capturing consumers' hearts. With several proprietary offerings and the addictive appeal of the blind box, the brand has tapped into the sweet spot of emotional spending at a time of geopolitical and economic uncertainty. "One of the key themes is IP, or chasing small pleasures," said Michelle Cheng, co-Lead of the Asia consumer research team at Goldman Sachs. "It's something the young generation loves — not just in China or Asia, but globally." Pop Mart isn't alone in boosting China's soft power. Video games, once tightly regulated by China's government, are now exploding in popularity. Black Myth Wukong, based on the Chinese folk story "Journey to the West," sold 20 million units in its first month globally, making it one of the fastest-selling titles of all time. Genshin Impact, a "gacha" game, where players spend in-game currency or real-world money to obtain virtual goods (named after Japanese "gachapon"), made $2 billion in its first year on the market, according to market intelligence firm Sensor Tower. It now generates more revenue outside China than at home, with players in Japan and the U.S. leading the charge, according to data by Statista. Home-grown innovators are transforming China's image. Consultancy Brand Finance ranked the country second in its global soft power index this year, up a spot from 2024, overtaking the UK for the first time and sitting just behind the U.S. Brand Finance attributed the jump to China's strategic efforts at enhancing its global image, focus on sustainable development, stronger brands, as well as the country reopening to visitors after the pandemic. "Finally, China has become visible, and young people are no longer attaching negative brand perceptions to China," said Yaling Jiang, a consumer analyst. "The best outcome of these consumer products is that people can see through the negative filter of them being Chinese and see them for what they are." While the perceptions about the country are changing fast, it remains to be seen if a state that has historically taken a top-down approach to reshaping its image can allow its brands to speak for themselves.
CNBC
3 hours ago
- CNBC
The technological trend of AI plus robotics is too important to be ignored: Goldman Sachs
Jacqueline Du, head of China industrial tech research at Goldman Sachs, says she is seeing positive developments on automation, and estimates the robotics market will hit $38 billion by 2035. She says that it'll take several more rounds of evolution before we reach the "ChatGPT moment" for the robotics industry.
Yahoo
5 hours ago
- Yahoo
Geopolitics dominates, before Fed takes the stage
A look at the day ahead in European and global markets from Wayne Cole. You know it's crazy times, when speculation Putin sent his body double to Alaska doesn't sound so outlandish. What does seem clear is that President Trump has shifted back to echoing Moscow's line, tweeting Kremlin talking points about Crimea and Zelenskiy. Putin's position seems to be that Ukraine should give up all the land Russia has taken, and much that it has failed to take in more than three years of fighting. This has been repeatedly ruled out by Zelenskiy and European leaders, and it's notable they will be by his side in Washington when he meets Trump later today. Markets have judged there is a diminished threat of further U.S. sanctions or tariffs on Russian oil exports, and oil prices are down modestly with Brent off 0.3%. Share markets are mostly firmer as Japan and Taiwan make more records, and Chinese blue chips scale a 10-month top. European stock futures are up 0.2% or so, as are Wall St futures. Valuations have been underpinned by a solid earnings season as Goldman notes S&P 500 EPS grew 11% on the year and 58% of companies raised their full-year guidance. This week's results will provide some colour on the health of consumer spending with Home Depot, Target, Lowe's and Walmart all reporting. For monetary policy the main event will be the Federal Reserve's Jackson Hole jamboree where Chair Powell speaks on the economic outlook and the Fed's policy framework on Friday, though there doesn't seem to be a Q&A as yet. ECB President Christine Lagarde and Bank of England Governor Andrew Bailey are on panel discussions. Futures are about 85% priced for a Fed rate cut in September so anything less than dovish from Powell would be a setback for debt markets. While Fed expectations are anchoring short-term yields, the long end continues to fret about inflation, budget deficit and the politicisation of monetary policy, so steepening the yield curve. European bond yields have also been on the rise, perhaps in part on a realisation of how much governments are going to have to borrow to cover increased defence spending. Key developments that could influence markets on Monday: - EU trade figures for June, US NAHB housing survey (By Wayne Cole; Editing by Jacqueline Wong) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
