Case · Emotional Consumption
Emotional Consumption: Selling Meaning Where There Is No Function
The fastest-growing consumer category of the decade sells objects that do nothing — and the economics are extraordinary.
At a glance
This is a category reading, not a client record — the firm’s assessment of an opportunity, published in the form we use before capital commits.
01
The Model
The model creates original characters, attaches emotional and aesthetic meaning to them, and sells them as physical objects — frequently through blind-box formats where the buyer does not know which variant they will receive.
Pop Mart’s 2025 revenue rose 185% year-on-year to RMB 37.12 billion, with profit attributable to owners up 308% to RMB 12.78 billion. Its leading IP generated RMB 14.16 billion, up 365.7% — roughly 38% of total revenue from a single character family. Gross margin expanded to 70.3% from 64.0%, and overseas revenue reached 40.3% of sales, up from 22.8% a year earlier, with Americas revenue growing over eleven-fold.
The drivers are the “kidult” trend, where adults buy toys for themselves, and “spiritual consumption,” where products are valued for emotional and aesthetic appeal over pure functionality.
02
Why It Works
Emotional products escape functional price ceilings. A functional object is priced against what it does; an emotional object is priced against what it means. That is why a 66.8% gross margin is achievable on a high-margin, low-cost structure.
The blind box converts a purchase into an event. Uncertainty creates repetition, collection creates completion pressure, and rarity creates community trade — turning one transaction into an ongoing behaviour.
IP monetises across formats indefinitely. Character IP extends into films, collaborations, and global sporting partnerships — the same asset earning across products, media, licensing, and experience with no additional creation cost.
And the underlying demand is macro, not fashion. Analysts tied the trend to young urban shoppers, frustrated by limited career options and social mobility, spending on hobbies and small pleasures rather than big-ticket items like a home. That condition exists in every major economy with expensive housing and constrained mobility. It is not going away.
03
Why It Does Not Transfer Directly
Concentration risk is severe and publicly acknowledged. Shares fell more than 20% on earnings day despite the results, as analysts questioned reliance on a single blockbuster IP, with warnings that dependence on one character exposes the company to volatility if consumer interest fades or counterfeiting intensifies. The chief executive told investors the company “has more than just” its lead character, and disclosed six IPs above RMB 2 billion and seventeen above RMB 100 million — a portfolio argument that is exactly the right one to be making.
The category also has history. In 2022 the same company’s gross margin fell 4% and operating profit dropped 49%, with negative social media sentiment indicating weakening consumer interest in blind boxes. Emotional consumption cycles. And blind-box formats attract regulatory attention around minors and gambling-adjacent mechanics in several markets, including India.
04
The India Opening
India’s position here is genuinely unusual: it has among the richest character and mythological IP traditions in the world, an enormous young population, growing discretionary spending, and almost no organised character-IP consumer products industry. Indian characters exist in comics, mythology, regional folklore, and cinema — and are monetised almost entirely through media licensing rather than through owned physical product with controlled scarcity.
The manufacturing capability exists. The retail formats exist. What does not exist is a company treating original character IP as a compounding asset and building product, scarcity, community, and eventually media around it.
05
Chitrangana’s Build Advisory
- Build a portfolio from the start, and measure concentration monthly. A single character carrying most of the revenue is the category’s defining risk. The discipline is launching the next IP while the current one is still ascending, not after it peaks.
- Design scarcity honestly and stay clear of gambling-adjacent mechanics with minors. Limited editions and artist collaborations create the same collection dynamic without the regulatory exposure that blind-box formats increasingly attract.
- Treat community as the product’s second half. Trading, display, and shared identity are what convert a purchase into a habit. A collectible without a community is an ornament.
Establishing whether an IP can carry a consumer products business is Business Consulting; building the commerce, scarcity, and community architecture around it is eCommerce Consulting.
India owns some of the world’s richest characters and sells almost none of them as objects people collect.
Chitrangana
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