Why China’s Gen Z is turning to plush toys and AI for emotional support
News Summary
A new report indicates that over 90% of Chinese consumers born after 1995 prioritize emotional value in their spending, viewing plush toys and AI companions as essentials. Faced with fierce competition and economic uncertainty, Gen Z consumers are alleviating stress and anxiety by purchasing items like Labubu plush toys, concert tickets, counseling sessions, and even virtual pets and companions. The report was jointly released by social media platform Soul App and the Shanghai Youth Research Centre. Data shows that Labubu plush toys saw an explosive surge in popularity on the platform in Q2 this year, with posts and searches increasing by 31.33 times and 26.44 times respectively. During the same quarter, AI companion posts surged by 1,894 times year-on-year, and searches soared by 225,056 times. Nearly half of Gen Z consumers engaged in emotional spending when unhappy, stressed, or lonely, with 46.8% believing emotional value to be "a good remedy for relieving stress and anxiety."
Background
China's Gen Z (typically those born between 1995 and 2009) represents a significant force in the Chinese consumer market. They grew up during a period of rapid economic growth but now face intensifying academic and workplace competition, along with future uncertainties amidst a slowing economy. This has led to an increased demand for mental well-being and emotional support. Having grown up in a digital environment, Gen Z is also more receptive to the virtual world and AI technology as a complement to real life, seeking solace there. This trend reflects a subtle shift in societal mindset, moving from a sole pursuit of material satisfaction to a greater emphasis on spiritual and emotional fulfillment.
In-Depth AI Insights
What deeper societal and economic issues are reflected in China's Gen Z shift towards emotional consumption? - Intensifying Economic Pressure and "Involution": A slowing economy and fierce job market competition fuel widespread anxiety among young people, leading to a lack of confidence in future income and career development. - Fragmented or Insufficient Social Connections: Traditional social support systems (e.g., family, community) may not fully meet Gen Z's emotional needs, or they may prefer seeking solace in anonymous, low-pressure environments. - Evolution of Consumerism: Consumption is no longer solely for practical value or status symbols; it has become a means of self-healing and stress relief, highlighting a profound shift in consumer behavior patterns. What are the investment implications of this "emotional consumption" trend for companies operating in China? - Emerging Emotional Economy Opportunities: Brands and platforms focusing on providing emotional value, psychological comfort, and companionship services will see growth opportunities, including personalized IP derivatives, AI emotional companions, online/offline social entertainment, and mental health services. - Upgrading Traditional Consumer Goods: Even traditional products can attract Gen Z consumers if they incorporate emotional elements, storytelling, or community experiences. Brands need to transition from functional to emotional connection. - Data and Privacy Challenges: Data collection and privacy protection for AI companions and virtual social platforms will become critical issues, with regulatory risks and user trust management being paramount. How might the Chinese government view or respond to a generation increasingly seeking solace outside traditional social structures, particularly through AI companions? - Content Regulation and Ideological Guidance: Given the conversational capabilities of AI companions, the government may intensify censorship of AI content and virtual social platforms to ensure adherence to mainstream values and prevent potential social risks, such as information security and the spread of undesirable content. - Guiding Social Intervention: More official programs aimed at improving youth mental health and promoting active social participation might be introduced to balance over-reliance on virtual companionship. The state might also invest in or launch officially sanctioned "healthy" AI companion products. - Technological Innovation and Digital Sovereignty: Encouraging domestic companies to innovate in AI companion technology while ensuring data sovereignty and independent control over key technologies to prevent external influence through emotional AI.