Labubu and Microtrends: The Psychology of ‘Frugal Luxuries’

In today's world of ever-changing microtrends, “convenience culture” and instant gratification, consumer behaviour has become increasingly emotion-driven and shaped by the rapid cycles of social media trends. Once a product goes viral, it's instantly available at the tip of our fingers - we buy it, the hype goes up and then falls just as quickly. This creates a self-perpetuating cycle, fuelled by our fear of missing out (FOMO) and desire to stay socially visible. 

Think Labubu's for example. People are shelling out thousands of dollars to collect limited-edition “blind-box” plush toys. These toys are accessible, playful and nostalgic - tapping into a sense of comfort and small luxury in a time of uncertainty and rising living costs.

What is the Lipstick Effect?

The Lipstick Effect is a theory coined by Leonard Lauder, former head of Estée Lauder. It describes how sales of affordable luxuries like lipsticks rise during recessions, as consumers’ treat themselves to smaller indulgences despite financial hardship.

Today's “lipstick”, however manifests in different forms: a daily iced coffee, Sephora hauls and hype-driven collectibles like Labubu's . These are justifiable treats; affordable enough for people to rationalise yet emotionally rewarding. The psychology behind this is simple: if we can't afford a house in this economy, why not buy something small that brings us joy? Thanks to TikTok's "little treat culture" and influencer endorsements, this impulsive behaviour is not painted as wasteful but rather restorative self-care. 

How Marketing and Hype Creates Business?

Consumers' perception of value no longer centres on the physical product but on the perceived value. This emotional meaning and social identity attached to brands allows firms to define products as luxury, justifying huge markups; luxury eyewear companies markup their products by as much as 1000%. A pair of glasses that costs $30 to manufacture may sell for $300 or more (Kotob, 2025).

As a result, marketing has become more critical than ever. Brands such as Louis Vuitton Moët Hennessy are responding by investing in data-driven, consumer-centric marketing that emphasises experience over product.

Take Labubu again - its marketing exploits consumer psychology to create scarcity, urgency and repeat purchases. Limited editions feed into consumers’ FOMO, amplified by social media influencers showing off their rare collections such as the "24 Karat Gold Labubu". The idea of a blind-box plays into consumers’ need for instant gratification by creating excitement during the time of unboxing. Just this one toy has boosted Pop Mart's net profit by 362% (Yang, 2025).

Its Effect on Our Wallets...

Balancing these indulgences with daily budgets is tricky. Marketing reframes our $5 daily coffee into "self care", a pair of $300 sunglasses as "status" and collectibles as "nostalgia". Yet as trend cycles accelerate, these "little treats" add up. While indulgence connects us socially and offers comfort, mindful spending and financial self-awareness are becoming crucial life skills. At the end of the day, true luxury lies in living intentionally, not expensively.

Until next time,

WIF 💙💙

Article by Tishya Anand in collaboration with WIF

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• Kotob, S. (2025, January 10). Why are glasses so expensive? eyeOs Eyewear. https://eyeoseyewear.com/blogs/news/why-are-glasses-so-expensive

• Yang, Z. (2025, August 19). Labubus are on track to be a Billion-Dollar business this year. WIRED. https://www.wired.com/story/labubu-pop-mart-earnings-2025/