Pang Donglai, POP MART, LAOPU GOLD... These brands are not just &#34;breaking the circle and debuting, frequently trending,&#34; but also achieving a &#34;dual bloom&#34; in performance and stock prices. Behind this phenomenon of explosive popularity is the strong rise of the &#34;emotional consumption&#34; era!
Guojin Securities conducted an in-depth study on the emotional value framework in its latest research report, stating that as China's per capita disposable income continues to rise, consumer demand is shifting from functional to emotional, and &#34;emotional value consumption&#34; is becoming an important main line in the consumer industry. It is expected that by 2025, the scale of China's emotional consumption market will exceed 2 trillion yuan.
Guojin Securities analyst Zhao Zhongping first analyzed benchmark companies in Japan: companies with IP matrix operational capabilities (Bandai Namco) and social cognitive anchoring capabilities (Shouxin Holdings), concluding that value addition comes from two aspects: &#34;internal satisfaction for oneself + external expression for socializing.&#34;
Looking back at the vast Chinese market, POP MART started with curiosity consumption, rooted in IP resonance; LAOPU GOLD connected social circles through hot consumption; the pet economy began with functionality and thrived on the cultural leap of companionship; Pang Donglai started with extreme service, loyal to humanistic warmth; Xiaomi Auto began with ecological breaking and succeeded through emotional resonance.
Overall, the core of emotional value lies in transforming short-term stimulation into long-term emotional sedimentation, and sustainable emotional value has a threefold positive impact on corporate performance. It creates differentiated competitive advantages at the operational level, significantly enhances revenue growth; strengthens consumer guidance capabilities at the operational level, improving inventory turnover efficiency; and achieves social self-fission at the profitability level by enhancing consumer stickiness and repurchase rates, effectively reducing marketing costs.
<h2>The Underlying Logic of Emotional Consumption: From Maslow's Needs to a Trillion-Yuan Market</h2>
The so-called &#34;emotional value consumption&#34; refers to: customers do not purchase and consume products, but rather the &#34;value (Utility)&#34; that customers can perceive, which is a subjective judgment that includes multiple factors such as product attributes, attribute utility, and expected outcomes.
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The manifestations of emotional consumption mainly include the following three forms: (1) service + consumption value-added; (2) IP + consumption for self-satisfaction; (3) socializing + consumption for pleasing others.
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Guojin Securities states that there are three major driving forces behind the current rise of emotional value consumption: the increase in income levels driving the leap in demand hierarchy, changes in the social environment giving rise to emotional attachment needs, and intensified homogenization on the supply side leading to differentiated competition.
First, the increase in income levels drives the leap in demand hierarchy. As per capita disposable income continues to grow, consumers are shifting from basic material needs to emotional satisfaction needs, providing an economic foundation for emotional value consumption
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Secondly, changes in the social environment have given rise to the demand for emotional support. Research reports show that over 90% of people feel the pressure of &#34;involution,&#34; and 42.9% of anxiety stems from self-worth realization. As the main consumer force, Generation Z places greater emphasis on self-pleasure and individual expression, with nearly 30% of young people during the 2024 Double Eleven shopping festival spending over 50% on joyful consumption.
Thirdly, the supply side is experiencing intensified homogenization, leading to differentiated competition. China's manufacturing output ranks first globally, but the low technical threshold has resulted in fierce competition. Taking the beauty industry as an example, in 2023, most beauty companies had a marketing expense ratio exceeding 45%, continuously squeezing profit margins, making emotional value an important means of differentiated competition.
At the same time, it is important to be cautious, as Guojin Securities indicates that emotional value consumption also carries the risk of migration:
<blockquote>
Overload backlash: The SK-II &#34;no makeup marketing&#34; failure case shows that over 90% of users dislike forced value bundling (Xiaohongshu public opinion monitoring).
Cliff in IP lifecycle: POP MART's MOLLY once dragged net profit margins down to 12.5% in 2021, with stock prices halved.
KOL dependency: After Dong Yuhui's departure, Dongfang Zhenxuan's net profit plummeted by 140% in six months (2025H1 data).
Over-reliance on short-term social hotspots: When the &#34;Zibo barbecue&#34; trend was high, Zibo City saw an increase of 694 barbecue-related businesses, but as the trend receded, most merchants fell into store closures and subleasing.
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Guojin Securities believes that in the current situation of generalized emotional value pools, strengthening differentiated product strength and brand mindset is even more important. Even in the fields of interest consumption and self-pleasure consumption, companies that can outperform the market and achieve rapid growth possess differentiated product competitiveness: for example, POP MART has a rich and original IP matrix that achieves social fission; Blue Cool focuses on the low-end price range; and Kefu Mei specializes in collagen regeneration and repair.
<h2>Learning from the Japanese Market: Two Sources of Value Addition in Emotional Consumption</h2>
Taking mature markets as an example, Guojin Securities states that emotional value consumption with potential for value addition includes the following categories:
<blockquote>
1) Internal satisfaction of self-pleasure consumption: Domestically represented by POP MART and Blue Cool, and internationally by Bandai Namco, we believe this type of consumption has not yet reached its ceiling, with IP as the core competitive advantage;
2) External expression of social consumption: This type of consumption is mainly reflected in companies and brands that have gift-giving mindset and social performance needs, such as LAOPU GOLD. We select Shouzhiguo Co., Ltd. overseas, believing that social attributes can add value to products while enhancing customer stickiness, thereby improving the company's performance.
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1. Bandai Namco: The King of the Full Industry Chain IP in Japan
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Bandai Namco's IP axis strategy provides important reference. Since the implementation of the &#34;IP axis strategy&#34; in 2010, the company's revenue has continuously climbed from a low point, and its market value has significantly increased.
Key success factors include: establishing a matrix of 1,137 IP reserves, with single IP revenue reaching 920 million yen, and top IPs like Gundam and Dragon Ball maintaining vitality for decades, contributing 14% of revenue, while controlling the proportion of top IPs to below 40% to diversify risks, and ensuring the systematic operation of IPs through organizational adjustments.
Financial penetration: After the IP axis reform (starting in 2015), the CAGR of single-store revenue turned positive from negative (-5.2% → +0.4%), the sales expense ratio decreased by 3 percentage points, and the net profit margin increased to 15% (compared to 10% before the reform).
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Guojin Securities stated that from the perspective of IP, business segmentation ensures that long-lasting IPs guarantee Bandai Namco's revenue baseline, with content updates and multi-business integration supporting operational focus:
<blockquote>
Bandai's top IPs generally have long lifecycles, with many evergreen trees lasting for decades, and also possess the ability to create short-term hits: IPs like Mobile Suit Gundam and One Piece rank among the top in sales; Bandai also has short-term hits, such as the Yokai Watch game produced by LEVEL5 in 2013.
</blockquote>
2. Shouxin Holdings: High-end Products + Gift-giving Mindset, Social Value Drives Market Value Growth
Shouxin Holdings demonstrates the monetization ability of social value. The company achieves a virtuous cycle through high social attributes leading to brand premium → operational efficiency improvement → expense ratio optimization → enhanced profitability.
The company has achieved significantly better profitability than its peers with high-end gift products with cultural attributes, such as &#34;Inaba White Rabbit.&#34; The net profit margin for the fiscal year 2024 reached 16.91%, while Meiji and Morinaga &amp; Co. were only 4.86% and 7.22%, respectively. The company's operating cycle is 78.36 days, significantly shorter than the industry average of 131-153 days, reflecting strong operational efficiency.
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Regarding how to maintain high social attributes, Guojin Securities stated:
<blockquote>
In product development, focus on high social value candy and snacks, emphasizing the development of high value-added products; in brand building, promote proprietary branding, enhancing product nutrition, functionality, and health value, and establish cooperative relationships with multiple universities and research institutions in industry-academia collaboration.
</blockquote>
From the perspective of turnover efficiency and expense ratio:
<blockquote>
Social attributes bring stable consumer interest and social fission, with strong supply chain responsiveness; the efficiency of expense investment continues to improve, with the expense ratio dropping below 40% in 2024, and the net profit margin continues to rise, achieving industry leadership
</blockquote>
<h2>Chinese Market Practice: From Impulse Consumption to Emotional Resonance</h2>
Looking back at the Chinese market, Guojin listed five examples including POP MART, LAOPU GOLD, the pet economy, Pang Donglai, and Xiaomi, emphasizing that emotional accumulation is key to seizing opportunities.
The three phases of POP MART's successful transformation are worth noting. From reliance on a single IP before 2018, to a multi-IP matrix from 2019 to 2022, and then to a platform-based enterprise in 2024, the company has achieved a shift from blind box impulse consumption to IP resonance consumption. In 2024, the company had 13 IPs generating over 100 million in revenue, with membership reaching 46.083 million, contributing 92.7% of sales, and a repurchase rate of 49.4%.
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LAOPU GOLD's social strategy is also worth studying. The company has successfully created a luxury mindset through its presence in sub-top-tier business districts and high-end pricing strategies. In 2023, less than 1% of loyal members spending over 300,000 yuan contributed 26.7% of sales, demonstrating strong customer stickiness among high-end clientele. The high-end customer base has spontaneously expanded (with celebrities like Yang Mi wearing their products sparking social media buzz), while the sales expense ratio has dropped below 15%, and the net profit margin has exceeded 20%.
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The pet economy shows a trend towards essential needs. In 2024, the market size of China's pet economy is expected to exceed 300 billion yuan, with a compound annual growth rate of 13.3% from 2015 to 2024. Nearly 60% of pet owners consider their pets as &#34;family,&#34; driving per capita pet spending to rise year by year. This anthropomorphized and long-term emotional demand has strong anti-cyclical characteristics. In the segmented market, functional foods account for 70% of the pet food market, and the proportion of pet hospitals with an average transaction value of over 500 yuan is 38.8%, giving rise to leading players like Guibao and Zhongchong.
Pang Donglai's extreme humanistic care is also noteworthy. Pang Donglai has stood out in the fiercely competitive retail industry with its humanistic warmth, achieving sales of 16.964 billion yuan in 2024, a year-on-year increase of 268.78%. Its success stems from three core capabilities: in employee care, it has built an industry-leading welfare system, with the average monthly salary for ordinary employees reaching 9,886 yuan by 2025 and a turnover rate of only 2.01%; in consumer experience, it has created 18 free service scenarios and a &#34;no-reason return and exchange&#34; policy, with an average customer stay time of 105 minutes and a repurchase rate of 83%; in social responsibility, it has actively provided assistance during crises such as the Henan floods and the COVID-19 pandemic.
Xiaomi's automotive ecosystem has broken through to achieve an emotional value leap. Xiaomi's rapid rise is reflected in three dimensions: in product definition, it precisely transforms emotional needs through a user co-creation system, with 100,000 user feedbacks quickly iterating product details; in ecosystem construction, it connects mobile phones, home appliances, and cars through the Surge OS, building a cross-scenario intelligent emotional network to realize the experience of being an &#34;emotional partner that anticipates needs&#34;; in brand operation, it deeply binds Lei Jun's personal IP, triggering emotional resonance through the persona of &#34;technological idealism.&#34;
Relying on ecological advantages and brand stickiness, Xiaomi Auto has achieved a value leap from technology products to emotional carriers.
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Overall, Guojin stated that emotional value consumption is divided into three major stages: attraction, solidification, and sublimation:
<blockquote>
(1) Attraction: Mainly attracts new consumers to make purchases through social dissemination and curiosity-driven approaches.
(2) Solidification: Solidifies consumer emotions into long-term stable, fundamental emotional and essential needs, which is key for companies to build a strong moat, strictly guard revenue bottom lines, and achieve stable performance growth.
(3) Sublimation: Resonates the long-term solidified emotional needs of consumers with brand effects, achieving a fission effect within social circles.
</blockquote>
Guojin believes that long-term competitiveness relies on the ability to transform emotions into emotional connections, while sustainable emotional value can help companies form differentiated competitive advantages, enhancing operational capabilities and profitability

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Guojin Securities stated that the core of emotional value lies in transforming short-term stimuli into long-term emotional deposits, which will have a threefold positive impact on corporate performance. It will create differentiated competitive advantages at the operational level, significantly enhance revenue growth; strengthen consumer guidance capabilities at the operational level, and improve inventory turnover efficiency; and at the profitability level, effectively reduce marketing costs by enhancing consumer stickiness and repurchase rates. It is expected that by 2025, the scale of China's emotional consumption market will exceed 2 trillion yuan

- The rise of "emotional consumption" in China is driven by increasing disposable income, shifting consumer demands from functional to emotional satisfaction, with the market expected to exceed 2 trillion yuan by 2025.  
- Key brands like Pop Mart and Lao Pu Gold exemplify this trend, leveraging emotional value to enhance customer loyalty and operational efficiency, while also facing risks such as market saturation and reliance on social trends.  
- Analysts emphasize the importance of differentiation in products and brand perception to sustain competitive advantages in the evolving landscape of emotional consumption.

Wallstreetcn

LAOPU GOLD

Why did POP MART and LAOPU GOLD become popular products? An article that dissects the "emotional value logic" of the new consumption era