The art market is hardly new to fads, frenzies and speculative bubbles. From Beanie Babies to Bitcoin, the human urge to collect and speculate has driven many a boom and bust. Today, the designer toy scene is enjoying an unprecedented popularity boom as well, with the character Labubu at the front of this new wave. Is the Labubu mania similar to the NFT bubble of the past few years? Perhaps most important, is it going to end up on the same path of hype and soon-to-be disappearance? FearlessToken.com then dives into these similarities to determine whether or not this designer toy craze is here to stay.

The Rise of Labubu and the Echoes of NFTs

Labubu, the whimsical star race of Hong Kong-based artist Kasing Lung, has become an international treasure. These figures, usually sold in blind boxes, have been a hot item for collectors and the average consumer. With their pretty aesthetics, garden pest shapes and adorable designs, they lure you in. The anticipation of opening each one brings adrenaline, while the passion among collectors creates a tightknit camaraderie. This mirrors the rise of NFTs, where unique digital assets gained immense popularity, driven by factors beyond just the art itself.

The Labubu craze and NFT boom have a number of important similarities. Celebrity endorsements are hugely impactful, with influencers and celebrities regularly flaunting their collections, increasing demand and desirability. One tweet from Elon Musk can send a particular NFT’s value soaring. Just like the previously mentioned post with Labubu, such a teaser post can create an immediate buzz among collectors. The fear of missing out FOMO is another strong motivator. Some Labubu designs are short-run, creating a shop-sellout frenzy on the ‘gram. This excitement produces a fear of missing out, pushing consumers to rush in and make last-minute purchases. It sounds a lot like the NFT market to me. There, the fear of missing out on the next big project led folks to take speculative bets on the projects, driving up prices. Lastly, artificially manufactured scarcity is a consistent theme. A lot of NFT projects take advantage of limited editions, and Labubu is no exception. Further, they produce limited editions to enhance scarcity and fan the flames of desire.

FOMO and Artificial Scarcity: Fueling the Fire

As I learned in my attendance at FOMO Fashion Week, the ideas of artificial scarcity and FOMO play a huge role in the Labubu and NFT trends.

FOMO: The Driving Force

  • Impulse Purchasing: The fear of missing out can lead to impulse buying in both the designer toy and NFT markets, as consumers feel pressure to acquire a particular item before it sells out or becomes unavailable.
  • Increased Demand: FOMO can drive up demand for certain designer toys and NFTs, as consumers fear missing out on a potentially valuable or rare item.
  • Higher Prices: The fear of missing out can also lead to higher prices for certain items, as consumers are willing to pay a premium to ensure they don't miss out on a particular opportunity.
  • Limited Edition Frenzy: FOMO can create a frenzy around limited-edition designer toys and NFTs, leading to a surge in demand and potentially even a resale market.
  • Anxiety and Stress: FOMO can also lead to anxiety and stress for consumers, as they feel pressure to keep up with the latest trends and releases in the designer toy and NFT markets.

Artificial Scarcity: Creating the Illusion of Value

  • Increased perceived value: Artificial scarcity can make collectibles like Labubu and NFTs seem more valuable due to the psychological principle of scarcity, which states that people tend to place a higher value on things that are scarce.
  • Fear of missing out (FOMO): Artificial scarcity can create a sense of urgency, triggering the fear of missing out (FOMO) in potential buyers, which can drive up demand and prices.
  • Perceived exclusivity: Limited availability can make collectibles seem more exclusive, which can increase their appeal to collectors and investors.
  • Higher profit margins: By creating artificial scarcity, sellers can increase profit margins, as buyers may be willing to pay a premium for the perceived value of the collectible.

Sustainability: Learning from the NFT Boom and Bust

Despite all of the positive news, the NFT market did go through a major correction after its initial boom. Most of these projects lost 90%+ of their value, and the speculation hype train cooled off. This raises the question: will Labubu and the designer toy trend suffer a similar fate?

Whether collectible trends are sustainable or fleeting depends on a variety of factors. Unlike unconnected, speculative NFTs that came before it, the world of Labubu exists in a physical space, which could give it more staying power. The aesthetic beauty of the figures and the fun of collecting definitely factor in as well. The real difference is the community and usefulness. NFTs that provided actual real-world use, utility, exclusive access, or cultivated dedicated communities were able to survive the fallout. For the Labubu trend to be truly sustainable, it must continue to grow past the collectibility angle. By collaborating with artists, brands will have the opportunity to offer much more engaging and unexpected experiences to NFT collectors. Tapping into other media genres could only increase its sustainability long-term.

Lessons for the Future of Collectibles

The Labubu phenomenon and the current NFT explosion have a lot of surprising parallels. They both offer important lessons for the future of all collectibles, physical or digital. Smart marketing is key, and NFTs licensed to brands or individuals with long-term storied legacies have a better chance of increasing in value. Linking NFTs to physical world assets, such as real estate, gives people a clear-cut use case and lasting appeal. Real Ownership & Great UX API-first development True ownership and a great user experience True ownership and a great user experience Pairing up with well-established brands that possess enduring value can tremendously enhance an NFT’s success, providing unique membership and ownership benefits.

Only time will tell what the future holds for Labubu and this latest designer toy craze. With the right knowledge about the interplay between hype, scarcity, and community, collectors can spend their money wisely. This understanding protects investors from falling into what could be a bubble. FearlessToken.com is always watching the bleeding edge of culture. Our members gain critical knowledge about the evolving world of digital and physical collectibles.