Labubu and Moutai: The Social Currency Battle of New and Old Consumption Era

Recently, a report comparing emerging trendy IPs with traditional liquor giants has attracted market attention. This report attempts to clarify the similarities and differences between Labubu and Moutai, exploring whether it reflects a historical repetition of consumer cycles or a profound paradigm shift.

Analysis shows that although Labubu and Maotai both possess the attributes of social currency, there are significant differences between the two in essence. The social characteristics of Labubu are more based on the common interests and values of the younger generation, while the social functions of Maotai rely more on power and hierarchical relationships. This difference reflects the essential distinction between "new consumption" and "traditional consumption."

However, Pop Mart also faces similar challenges to Moutai, namely the dual test brought by the IP cycle and investment properties. If there is a long gap between Labubu and the next blockbuster IP, the company's global growth may slow down.

In addition, investors should also pay attention to the two major risks of regulation and market congestion. The current phenomenon of capital concentration pouring into the "new consumption" sector is quite similar to the previous situation where funds were clustered around blue-chip stocks. The fragility of this crowded trading may have a huge impact on valuations.

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Intergenerational Differences in Social Currency

The research team believes that Labubu and Moutai, while both possessing social currency attributes, exhibit significant generational differences:

1. Social attributes: Moutai relies more on power and hierarchy, primarily serving business occasions; Labubu represents the younger generation's socializing based on interests and values, emphasizing emotional value and instant gratification.

2. Consumption Motivation: Moutai can serve as a "productivity tool," while Labubu satisfies young people's pursuit of emotional value and "dopamine" consumption in a digital social environment, reflecting China's transition trend from investment-driven to consumption-driven.

3. Globalization Process: Moutai is deeply rooted in Chinese traditional culture, and globalization is still in its early stages; Labubu, on the other hand, has already achieved significant success globally, aligning with global trends.

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

While experiencing rapid growth, Pop Mart and Moutai face similar challenges, namely the dual test brought by the IP lifecycle and product investment attributes.

1. IP lifecycle risk: Moutai, with a century of history and official endorsement, has proven its ability to withstand cycles. In contrast, Pop Mart and Labubu have a relatively short history, and the IP lifecycle remains a core risk.

2. Pros and cons of investment attributes: The history of Maotai shows that "investability" is a double-edged sword; it acts as a booster during upward cycles and becomes an amplifier during downward cycles.

The report notes that Pop Mart is actively managing the second-hand market prices to ensure its appeal to young consumers and create a favorable environment for the release of new IPs and products.

Unignorable Regulation and Market Congestion

The report concludes by emphasizing that regulation and market sentiment are two other risk factors that investors must face.

1. Regulatory risk: As the consumer base of Pop Mart becomes increasingly diversified, its "mainstreaming" has reduced its exposure to minors in the Chinese market. At the same time, the growing overseas business also helps to hedge against regulatory risks in a single market. However, this risk may still negatively impact the company's fundamentals or trigger "headline noise" that leads to stock price fluctuations.

2. The vulnerability of "group" trading: Currently, funds are concentrated in the "new consumption" sector centered around Pop Mart, similar to the previous influx of funds into consumer blue-chip stocks. Changes in fund flow and positions can have a significant impact on valuations. Although recent changes in fund flows have put certain pressure on "new consumption" stocks, this "crowded" condition may persist for a while due to the scarcity of quality investment targets.