The Collision of New and Old Social Currencies: A Comparative Analysis of Labubu and Moutai

Recently, a research report compared the emerging trendy toy IP Labubu with the traditional liquor giant Moutai, attempting to explore whether this indicates a historical replay of the consumption cycle or a profound paradigm shift.

Analysis shows that although Labubu and Moutai both possess the attributes of social currency, their social functions have essential differences. Labubu is more based on the common interests and values of the younger group, while Moutai mainly relies on power and hierarchical relationships. This difference reflects the fundamental distinction between "new consumption" and "traditional consumption."

The report points out that Labubu's parent company faces dual challenges from the IP cycle and investment attributes, similar to Moutai. If there is a long gap between Labubu and the next blockbuster IP, the company's global growth may slow down.

In addition, regulatory risks and market crowding are two major factors that investors cannot ignore. The current phenomenon of capital concentration pouring into the "new consumption" sector is quite similar to the previous situation where funds clustered around blue-chip stocks, and the fragility of this crowded trading could have a huge impact on valuations.

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Generational Differences in Social Currency

The research team believes that although Labubu and Moutai both possess social currency attributes, there are significant generational differences.

1. Social Function: Moutai serves more as a productivity tool acting as a "social/business lubricant," while Labubu represents the younger generation's pursuit of emotional value, providing consumers with an instant, delicate, and affordable "dopamine" experience.

2. Consumption Motivation: In a digital world where consumers face "meaninglessness" and increasing pressure, Labubu suggests that China is gradually shifting from an investment-driven model to a consumption-driven model.

3. Globalization Process: Moutai is deeply rooted in Chinese traditional culture, and its globalization process is still in the early stages, while Labubu, which is highly in tune with the spirit of the global era, has already achieved significant global success.

The Double-Edged Sword of IP Cycle Risks and Investment Attributes

While growing rapidly, research has also pointed out similar challenges faced by Labubu's parent company and Moutai:

1. IP lifecycle risk: Moutai, with a hundred years of historical accumulation and official endorsement, has proven its ability to weather cycles. In contrast, Labubu has a shorter history, and the IP lifecycle remains a core risk.

2. Pros and cons of investment attributes: The history of Moutai shows that "investability" is a double-edged sword, serving as a booster in an upward cycle and becoming an amplifier in a downward cycle.

The report notes that Labubu's parent company is actively managing the second-hand market prices to ensure its appeal to young consumers and to create a favorable environment for the launch of new IPs and products.

Regulatory and Market Congestion Risks

1. Regulatory risk: Moutai has always been affected by policies such as price controls and anti-corruption campaigns. Similarly, Labubu's parent company is not in a regulatory vacuum. However, as the consumer base becomes increasingly diversified, "mainstreaming" has reduced its risk exposure to minors in the Chinese market. At the same time, the growing overseas business also helps to hedge the regulatory risks of a single market.

2. The vulnerability of "group" trading: Currently, funds are concentrated in the "new consumption" sector, with Labubu as the focal point, which is quite similar to the previous influx of funds into consumer blue-chip stocks. Changes in fund flow and positions may have a huge impact on valuations. In the context of a scarcity of quality investment targets, this "crowding" situation may persist for some time. The real turning point may only come when meaningful turning points appear in overseas market high-frequency data, or when a strong recovery in the Chinese economy provides investors with more options.