The “Ugly Cute” Moat: What Disney and Pop Mart Reveal About Modern Brand Building
When we first saw the Labubu craze, we recognized the playbook immediately. The frantic countdowns. The unboxing rituals. The astronomical resale prices. We should have recognized it. At Disney, we helped write it.
Our team drove the expansion of Duffy at Shanghai Disneyland, growing the franchise from a niche offering to over 4x revenue in just two years. We turned an obscure plush bear into a premium brand that locals flew across Asia to collect. Watching Pop Mart's Labubu explode into a cultural phenomenon felt like seeing our strategy remixed for Gen Z. The mechanics are nearly identical: build a blank canvas for identity, add strategic friction, and maintain discipline to protect the experience.
Here's how both playbooks work; and what they reveal about the future of brand building in an age of abundance.
Principle 1: Make Your Product a Platform
Labubu lore originates from author Kasing Lung's Nordic folklore-inspired illustrated book series, The Monsters Trilogy, but Pop Mart’s genius was ignoring the complex backstory entirely. Instead, they focused only on the core character traits that resonated emotionally with fans.
According to the lore, Labubu is kind-hearted and well-meaning, but sometimes a little mischievous. They often accidentally end up causing trouble or achieving the exact opposite of their intention. Their "ugly cute" 丑萌 aesthetic, a huge grin of jagged teeth paired against large, innocent eyes and a fuzzy body, reinforces these contrasting traits. There is an almost Zen-like lesson wrapped up in Labubu, where the embrace of the charming imperfections of an "ugly cute" doll gives fans the permission to accept life as it is, not as it should be. For this community, Labubu becomes a blank canvas onto which fans project their own identities.
What is "Ugly Cute" (丑萌)?
Combine features that shouldn't work together, but somehow do:
Oversized eyes, Exaggerated Proportions, Unconventional Faces
+
Innocent Charm, Soft Textures, Playful Expressions
= Irresistible Appeal
Through unboxings, creative customizations, collection tours ("shelfies"), and day-in-the-life videos, Labubu enabled fans to create their own stories and share user-generated content across TikTok, Reddit, RedNote, and YouTube. Pop Mart strategically secured high-profile endorsements from celebrities like Blackpink's Lisa, Rihanna, and David Beckham, which minted social currency for Labubu fans overnight. This powerful sense of belonging transformed toy collectors into brand ambassadors who constantly amplify Labubu's cultural relevance.
Duffy the Disney Bear and his friends have a similarly simple backstory. Duffy was sewn by Minnie Mouse to accompany Mickey on his global travels. Duffy and his friends all express the core character traits of innocence, friendliness, kindness, and curiosity, which allowed this franchise to create an unexpected but powerful synergy with Japan's "Lolita" fashion subculture.
In Japan, the term "Lolita" lacks the Western connotations associated with Vladimir Nabokov's novel. Instead it is a fashion and lifestyle movement that rejects mainstream societal pressures. It’s rooted in Japan's "Otome" (maiden) and "Kawaii" (cute) cultures with an identity built on fantasy, innocence, and a touch of nostalgia. The aesthetic is influenced by Victorian era fashion: voluminous skirts, Peter Pan collars, and muted colors. Duffy and his friends, with their cute features and childlike personalities, became the perfect companions for Lolita enthusiasts and their meticulously crafted identities.
Images: LinaBell and Lolita Fan - Shanghai Disney Resort Official WeChat Account; Lolitas on the subway to Shanghai Disneyland by Jason Yu; “Girl in pink lolita fashion” by Jinxx22 - Wikipedia Commons, CC BY-SA 4.0
Disney Parks offer a perfect magical fairy-tale backdrop for Lolita enthusiasts to meet up and celebrate this unique fashion style. The Tokyo and Shanghai Disney parks, in particular, offer them a safe space to wear their elaborate outfits, free from the judgment or harassment they might encounter on city streets.This synergy turned a trip to Disney into a special occasion worthy of donning an elaborate outfit, finding the perfect Duffy accessory, and snapping perfect shots for social media.
Why This Works
The blank canvas transforms products into platforms. To create one for your brand:
Start with universal emotion. Find the feeling everyone understands: imperfection, nostalgia, aspiration, rebellion.
Stop before you limit interpretation. Give just enough personality to resonate, not enough to constrain. No elaborate backstories. No heavy-handed messaging.
Give customers tools, not just products. Make it easy to customize, photograph, share, and remix. The canvas is only valuable if they can paint on it.
When customers create their own stories, they're not just buying, they're investing in their own identity. That's when a toy becomes social currency.
Principle 2: Make Them Earn It
This flywheel is the engine of a modern brand, but an engine needs a spark to ignite. That spark is strategic friction. The blank canvas gives fans a platform for their identity, but the drama of the chase supercharges the story and makes it worth telling. We've all felt the simple pride of assembling our own furniture, a phenomenon researchers call the IKEA effect. The satisfaction we feel from an achievement directly reflects the effort we invested.
For this new generation of "social clout" goods, the product is an embodiment of the owner's investment in developing cultural capital within the group. This cannot be bought simply with cash. It must be earned by waiting in digital or physical queues for a limited drop or spending time on different social channels to learn about a special event. While mass retail is moving towards faster, more seamless transactions, both Disney and Pop Mart are masters of adding friction and drama to the process so that a simple figurine or plush toy becomes a trophy.
For Labubu, the key mechanic is the blind box sales format. For each themed series, usually 8 to 12 unique designs are released, including a rare "secret" figure. Each box is sealed in opaque packaging, so buyers cannot see which figure they’ve purchased until they open it. This injects an element of chance into every purchase, creating the psychological hook that incentivizes repeat purchases.
Pop Mart has developed a sophisticated omnichannel model of online distribution, flagship retail, and automated vending machines to give their fans the ability to buy whenever the urge strikes. However, in the age of effortless, "no questions asked" return policies pioneered in e-commerce, Pop Mart maintains a strict "no returns, no refunds" policy for blind boxes based on personal reasons. This added friction feeds back into the community: the brand recommends that fans record unboxing videos as proof of product defects or quality issues that would qualify for a refund. This, combined with the scarcity of secret figures, supercharges conversation about collecting, trading, and resale as fans turn to online platforms to share their latest trophies and gush about their grails.
“THE MONSTERS Lazy Yoga Series” Pop Mart US, https://www.popmart.com/us/products/1436/the-monsters-lazy-yoga-series-figures-2387
At Shanghai Disneyland, the accepted wisdom was that guests prioritize rides, only stopping for quick purchases at ride-exit shops. After all, the relatively high ticket prices incentivized guests to maximize their time on rides and attractions. However, one unassuming shop tucked behind a restaurant and away from any major rides or attractions shattered our assumptions.
At Disney, we meticulously tracked the revenue per square foot for each of our retail outlets. Our data revealed that the "Whistle Stop Shop," a small railroad-themed store that held most of the Duffy SKUs, had by far the highest performance of any store in the park. More surprisingly, revenue at this location was highly correlated with attendance of Annual Pass holders, a group notorious for their low spending habits.
We discovered that for Duffy fans, this shop had become a destination unto itself. Local Annual Pass holders visited on weekday mornings when other guests were on rides. Duffy fans from across Mainland China, Hong Kong, and Japan flew to Shanghai specifically to see the newest collections. The planning, anticipation, and journey itself to Shanghai Disneyland became the key mechanic driving Duffy purchases.
Why This Works
Strategic friction makes effort visible—and visible effort creates value. To design friction that drives engagement:
Make them choose. Blind boxes force decisions. Limited drops demand prioritization. The act of choosing creates investment.
Make them travel. Physical or digital pilgrimages turn transactions into experiences. The journey becomes part of the story they tell.
Make them wait. Scarcity without friction is just shortage. Friction without scarcity is just annoyance. Together, they create anticipation that compounds value.
The goal isn't to make buying hard, it's to make earning meaningful. When customers work for something, they don't just own it. They become it.
Principle 3: Say No to Protect Yes
The most overlooked element of both strategies is disciplined execution. Neither the blank canvas nor strategic friction will sustain a brand without the commitment to protect the core experience over short-term revenue gains. For Duffy and Labubu, this meant making difficult choices that most retailers would never make.
Maintaining the trust of Labubu collectors required more than novelty. Pop Mart had to maintain strict quality control and scarcity management. The brand recommends that fans record an unboxing video as proof for any product defects or quality issues that would qualify for a refund. This signals that Pop Mart cares deeply about the quality of what fans are earning, not just about volume sold.
The "no returns, no refunds" policy isn't just friction, it's a quality commitment. By refusing casual returns, Pop Mart forces itself to ensure every box that ships is worthy of being opened and treasured. The scarcity of secret figures is carefully managed to keep the chase alive and prevent the community from moving on to the next trend.
When we discovered the Whistle Stop Shop had become a destination, our discipline was tested. Scalpers were reselling plushes found in the easily accessible World of Disney store in the mall outside the park. The easy decision would have been to ignore it. The disciplined decision was to protect the value of the fan pilgrimage. We withdrew all Duffy merchandise from outside locations, consolidating it exclusively inside the park. This took short-term pain, making the product harder to buy, to maintain the long-term value of the fan's journey.
This scarcity was intertwined with a relentless focus on quality. As we continuously launched new collections, we had to maintain the trust of our fans. We would rather lose revenue on a bad batch than have a fan post online that their hard-earned trophy was “ugly”. This wasn't just about standards; it was a core part of the brand promise. This discipline gave us the license to expand into new, higher-margin categories like premium headwear and clippable plushes. Fans trusted that anything with Duffy's name on it would be worth the effort.
Visit Shanghai - Duffy Limited Collection; Chinese New Year 2019 Duffy Clippable Plush; Christmas Seasonal Duffy Merchandising Display
Finally, our discipline meant saying no to generic brand extensions. We pushed our culinary partners to do something rarely done: build a food and beverage strategy around a niche merchandise line. The Lolita lifestyle’s embrace of tea parties inspired a pop-up experience that transformed an underutilized restaurant space into a premium, Duffy-themed afternoon tea getaway. This authentic foundation allowed us to experiment with other premium products like colorful Duffy-themed soft-serve ice cream. These items offered a highly public way for fans to display their social currency while organically introducing the franchise to a spillover audience of young professionals and families. This was the discipline of authenticity: instead of chasing broad appeal with generic products, we invested deeply in our niche, trusting that their passion would be the most powerful marketing of all.
Magical Duffy Afternoon Tea mini-desserts; StellaLou lavender Hokkaido milk soft serve ice cream
Why This Works
Discipline protects what friction builds. Without it, you're just making customers jump through hoops for mediocrity. To maintain discipline:
Say no to short-term revenue. Pull product from convenient channels. Refuse to flood the market. Let demand outpace supply.
Say no to quality compromises. Every bad batch erodes the trust that justifies the friction. Your fans are working hard, honor that effort.
Say no to broad appeal. Serve your core fanatically. Their passion is your marketing. Dilution kills magic faster than any competitor.
Discipline is what turns a trend into a franchise. Fans trust brands that say "no" more than they say "yes."
Conclusion: You Don't Just Buy It, You Earn It
The success of Duffy and Labubu is more than a masterclass in brand strategy; it’s a clear signal of a market bifurcating. On one side, hyper-efficient retailers race to remove every possible point of friction, competing on a razor’s edge of price and speed. But on the other, a new and powerful value proposition is emerging, one grounded in a simple, human truth: the things we work for are the things we value most.
In this world, the "work"—the pilgrimage to a theme park, the gamble on a blind box, the digital queue for a limited drop—is not a bug; it's the core feature. This strategic friction transforms a simple transaction into a meaningful experience. It’s the critical element that turns a plush toy into a trophy, a purchase into a personal story. It shifts consumers from passive buyers to active participants.
This is the future of building unscalable human value. Since leaving Disney, we've each taken these principles into completely different domains: ecommerce, fintech, consumer brands, and hospitality. The lesson isn't confined to collectibles. The mechanics adapt, but the human truth underneath remains: effort creates emotional investment, and emotional investment creates value that transcends price.
The question for your brand: What are you making customers earn?
We keep coming back to these same principles:
Blank canvas: What universal emotion are you touching?
Strategic friction: What are customers willing to work for?
Discipline: What will you say no to in order to protect the experience?
We wrote this because we've seen it work beyond collectibles and theme parks.
If you're working on this in your business, we want to hear about it!
Belu (Shijing) Liang [LinkedIn] - is a data strategist and founder building AI tools that accelerate time-to-value for data science teams. Before launching her startup, she spent 6+ years at companies like Alipay, Amazon, and Disney, where she specialized in translating complex data into actionable business growth. At Shanghai Disneyland, focused on the Food and Beverage business unit and helped to identify revenue opportunities including around desserts leveraging Duffy IP. Now, she's focused on creating the shortest path from data to impact, applying the same discipline of saying "no" to complexity that protected the Duffy experience. Belu believes the best data work removes friction for humans, not adds it.
Rachel Xia [LinkedIn] - left an 8-year career building consumer brands in FMCG and entertainment to create Puyu Retreats—wellness experiences across China's most untouched landscapes. As the lead Merchandise analyst for Duffy at Shanghai Disneyland, Rachel learned that the best brands make customers earn what they value. She watched guests fly across Asia for a plush bear, not because it was convenient, but because the pilgrimage itself held meaning. Now at Puyu, she's designed that same journey: retreats where showing up is part of the healing. Rachel believes true brand building is about serving your core fanatically, whether that's Lolita fashion enthusiasts at Disney or burned-out professionals seeking stillness. When you invest deeply in your niche, their passion does the marketing.
Jason Yu [LinkedIn] - is a Product Strategy & Operations leader passionate about building intelligent systems where AI augments human capabilities. At Shanghai Disneyland, he led the team that grew Duffy the Disney Bear from a niche offering to 4x revenue in two years by designing experiences customers would work for. He's applied these principles across global markets, most recently leading seller experience initiatives that shaped go-to-market strategy for high-growth platforms. Now, Jason is focused on leveraging AI not just for analytics, but for creating smarter, more intuitive workflows that feel less automated and more assisted. Having built teams across North America, Asia, and Europe, he's learned that empathy is the ultimate tool for solving complex problems—whether designing products or building cross-cultural collaboration.
