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And this is Andrew Peach with World Business Report from the BBC.
Today, $4 billion of Labubu dolls. very pointy ears, big eyes, and a smile which shows exactly nine teeth. why India and China have agreed to resume direct flights and step up trade relations and the popularity of Bitcoin in Kenya.
I prefer to pay my garbage collection using Bitcoin because its transaction cost is really low.
First, Labubu is a word you may not have even heard before this year.
They are elf-like dolls. They're made by the Chinese firm Potmart. which has become one of the world's most valuable toy companies as a result.
Net profits soaring by nearly 400%. The company's Hong Kong-listed shares up by...
570%. It's now worth about double Mattel, which makes Barbie.
Today, the chief executive of Potmar, Wang Ning, said revenue could reach over $4 billion this year.
He's now reportedly the 10th richest person in China.
So what is the magic of Labubu? Georgia is in Australia, collects Labubu dolls and told us how much she spent on them.
I'd say like three to five grand. I think I have 25 or 26.
Here they're... $80 to $130. Definitely pretty addictive and they're really expensive.
For me, it was social media. A lot of people on TikTok were posting about their Laboo Boo collections and...
I really wanted to collect them for myself as well.
They're absolutely everywhere. Everything on TikTok, there's coffees, blankets, drink bottles.
Everything is just Laboon. at the moment where i'm from like every shopping center has a little pop-up stand that's selling fake labooboos for honestly more than the authentic ones I'm definitely gonna continue collecting them.
I just love them. I just think they're so cute.
I don't care if I get duplicates. I don't sell mine.
I just keep them. They're basically like my children.
Celebrity endorsements from Rihanna, Dua Lipa and Kim Kardashian have certainly helped boost the Labubu brand.
My colleague Fan Wang is in Singapore. She's been telling me more.
Some think they're cute, others think they're ugly, but they're really just these dolls who have vinyl faces that are attached to their plush bodies.
And they also have this signature look, very pointy ears, big eyes, and a smile which shows exactly nine teeth.
And they're very distinctive, which is how they've become a trend, worth billions of dollars now.
Yeah, nobody saw it coming. And do we know why that is?
Why it is they've caught on? Because the thing about trends is, you know, lots of journalists are writing about it around the world.
So was it ticked all the boxes? Well, yeah, being one of those journalists writing about these trends, I have to say I don't really know.
Because, you know, like internet viral trends, it's hard to explain.
But there are some clues we can get, I think, It was first very popular in China at the end of the pandemic.
China was under one of the most strict...
COVID measures in the world. And at the end of it, I think a lot of young people just kind of feel disillusioned with the reality and they found that collecting these dolls gave them a way to escape.
And then it started becoming popular in Southeast Asia as well, which neighbors China.
And then Later last year, we saw it's becoming trending in some countries in the West.
And earlier this year, it just really became viral after some big names such as Rihanna, Dua Lipa, Kim Kardashian. and David Beckham becoming fans of these dolls.
And then it just kind of exploded on the internet.
Now, to keep it going, PopMart is going to have to keep evolving.
Last time we touched on this on the programme, we talked about them maybe collaborating with other brands.
There's also the launch of a mini Lububu, which rather than attaching it to your handbag, you can attach to your phone.
Yeah, I think PopMart's strategy is just basically to take advantage of this momentum and try to make gains as much as possible. which is not surprising.
They're thinking about doing franchise maybe, and there are rumors about a franchise movie coming up.
And of course, because it is so successful, that prompts a whole market in fake Lububu dolls.
Yes, Le Foufou, which is a term for knockoff Le Boubous, has also become a thing.
We have seen news of custom officials busting... fake labubu operations in different countries, a lot of them being China.
Whenever there's an opportunity in the market, everyone tries to make again.
Fan Wang with me from Singapore. Live now to Laith Kalaf, who's Head of Investment Analysis at AJ Bell.
Laith, these numbers seem incredible. 400% profits up, 570% share prices up.
What do you make of it? Yeah, I mean, it's a tremendous growth story, really.
A lot of it has been very recent. you know the market was expected in good numbers on the back of the popularity of these dolls but even given that when the profits announcement was made, shares rose 12%, which tells you that the earnings were actually... better than expected.
And even the CEO is saying he reckons sales could now be 50% higher than than previously thought.
So as your report explored there, it does seem to be a phenomenon which is driven partly by domestic demand in China, but also expanding out internationally as well, part of it driven by... you know, influential celebrities and that perhaps presents a risk to the business model going forwards. and despite all of that success it could so easily be a fad that eventually just disappears so you know with the same speed at which the that success was had, will it disappear?
Potentially so. I mean, the shares are up by a huge amount, you know, this year alone.
And if you look at the way that they're trading, they're trading a very high valuation.
So it's a P multiple of 32 times earnings.
And just to give you some context, that's similar to what some of the big tech companies are trading at in America.
And those companies are obviously in the middle of AI boom, or at least the market thinks that there's going to be an AI boom.
So there's a lot of good news baked into that share price.
And so the company does have to continue to deliver in order to justify that share price.
And the market's still expecting profits to build from here. roughly doubling over the next two years so it's all about I guess meeting those expectations.
And is there any sense that this sits into the phenomenon of people treating themselves to something that's relatively small because they can't treat themselves to something that's bigger without enough funds to do that.
Yeah, I guess it does. I mean, we know that the Chinese economy has been struggling and yet a lot of demand is coming. for these dolls from that area.
And the company is looking to expand into other regions as well.
It's obviously, you know, got... you know, stores in the US, which is where it's looking to expand as well, including into...
Latin America as well. So, you know, potentially is a bit of a treat for people and As I say, there is also that slight worry that it is a trend that's driven by celebrity endorsement and that can disappear as quickly as it arrives.
Stay with us, Lee. Thank you very much indeed for now.
On to India and China agreeing to resume direct flights and step up trade and investment between the countries as they...
Slowly rebuild ties which were damaged by that clash over the disputed Himalayan border five years ago.
24 soldiers died in violent clashes. on this border where Indian and Chinese patrols overlap.
There was a complete breakdown of of relations as a result so this resumption of flights comes as the two countries try and strengthen their ties again because of the backdrop of US tariffs and Donald Trump's unpredictable foreign policy.
We're going to talk to Professor Harsh Pant, Head of Strategic Studies at the Observer Research Foundation. in Delhi about it.
So Harsh, thank you for being with us for five years.
No direct flights. Now they're back. What impact will that have?
I think it's sending a message that India and China remain keen to rebuild ties from the nadir that they had sunk in the aftermath of the Galwan crisis in 2020.
And both sides had retained the channel of communication open But it was very difficult against the backdrop of public revulsion in India against Chinese behavior.
And India had put certain benchmarks as to what it would need. in order to revive this kind of a high-level dialogue as well as some amount of people-to-people contracts.
And I think those aspects have been met, but also this has been accelerated by Mr. Trump and his behavior which is erratic and which has in some ways damaged the fabric of India-U.S. relationship also.
So I think there are many factors at work here, but both sides were intent on building a relationship that was important from an economic perspective.
So there's economic interests clearly at play there.
Also, the passage of time can help. It's interesting... that from an Indian perspective at least, you think the government was just acting in line with the population's wishes on this?
See, I think China, to be very honest, still remains very unpopular in India.
I think there's a question mark about Chinese reliability and the trust deficit is very huge.
So it's not that today the general public is very much in line with what the government is doing.
But I think what the government realizes is that economic ties with China are beneficial for India's growth story as well.
India is doing well economically. India is today the fastest growing major economy in the world, but it needs to do more.
And I think having stable ties with China, particularly against the backdrop of Mr. Trump's tariffs threats. certainly is a measure that Indian government is willing to take.
And I think most Indians would agree that that is a reality they have to contend with.
How does India strike better trade relations without risking its domestic manufacturing?
That has been the challenge for India. If you look at the numbers, India has a massive trade deficit with China, almost to the tune of 100 billion. like US dollars.
And that had been a big cause of concern for India.
And at the same time, the issue was that India's over-dependence on China is making India not only vulnerable, but is also not allowing India to develop its manufacturing base.
And I think now India is perhaps trying or has tried since 2020 to be more selective in which sectors it wants Chinese investments and which sectors it wants to have participate and so that it can also allow some of the critical sectors to more strategic sectors to grow according to its own demands.
And I think that's the model the government is going to continue to follow because it has to, on the one hand, engage China economically, but on the other hand, continue to develop its own domestic manufacturing base.
And it's very interesting that the spectre of the US, at least the US positions on things right now, sits behind... all of this, isn't it?
People are concerned about the reliability of trading with the US, but that could all change as well in the future.
It could, and I think what India and the US are waiting for is that – ever elusive trade deal, which the two countries started negotiating in February, but they have not yet been able to successfully conclude.
So it may change once the trade deal is in place.
We might see changes in Mr. Trump's behavior.
But at the moment, I think there is a lot of skepticism about how far India can rely on the Trump administration to manage India. its economic priorities, but also in some ways, its strategic priorities of the Indo-Pacific. where the rise of China, the changing balance of power had brought India and the US together in so many ways over the last few decades.
Thank you so much for being with us. That's Professor Harsh Pant, Head of Strategic Studies at the Observer Research Foundation. in Delhi.
Let's talk a bit more now to Laith Kalaf from AJ Bell.
We've had some Perhaps surprising UK inflation numbers out today, Leith.
What's going on? Yeah, the CPI number. which is obviously hugely watched, came in at 3.8%.
So that's now the highest level it's been since January 2024, so not particularly... welcome news.
It was slightly above expectations. The market was expecting 3.7%.
But we've seen upward pressure on inflation coming from petrol. from airfares and from hotel rooms as well.
So there's a bit of suspicion that the Gallagher brothers might be responsible for some of this because of that Oasis tour that took place. in July and obviously potentially pushed up hotel prices in the big cities.
So that inflation is now obviously well above the Bank of England's target. and it's heading in the wrong direction.
That presents some ongoing resistance to interest rate cuts in the future.
So a bit of a challenge for the central bank in the UK and for the UK government?
Definitely, yeah. The Bank of England actually expects inflation to rise from here. to 4% in September.
So again, going in the wrong direction. But in the medium term, it still expects inflation to come back to 2% based on market expectations for interest rates.
And broadly speaking, those expectations are that there will be two more interest rate cuts over the next year or so.
So back to three and a half percent. by next summer.
There's a little bit of debate about when the timing of those might be.
And certainly Rachel Reeves, the Chancellor, will be hoping that they're sooner rather than later because higher interest rates do spell a higher government debt bill.
And we know there's a budget coming. This autumn where, you know, it looks likely that there will have to be tax rises to balance the books.
And so a little bit of pressurise by lower interest rates would help.
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This is World Business Report with Andrew Peach from the BBC World Service and all this month on the programme we're taking a closer look at at the economic future of Africa.
Each week we're looking at different topics across the continent.
This week we're going to look at how trade is being made easier. between different African nations and we're in Kenya today where a tech company in Nairobi is encouraging the use of Bitcoin in one of Africa's largest slums.
As Michael Koloki now reports, the firm is hoping that cryptocurrency will help promote financial inclusion and boost people's livelihoods.
A team of young men and women who are part of a waste collection group go door to door collecting garbage from residents in Nairobi's Kibera informal settlement.
The group charges a fee for their service.
Some of the area residents, such as Knight Mudoni, pay the fee using the cryptocurrency Bitcoin.
I prefer to pay my garbage collection using Bitcoin because its transaction cost is really low.
It's something like 0.0 something percent.
I've been using it for a while now and it's really convenient.
Francis Anene is the team leader of the Waste Collection Group.
When I'm paid in Bitcoin... I'm able to pay members of my waste collection group using Bitcoin.
I like using Bitcoin as a saving tool. I use it as an asset that can help me in the future.
Both Knight Muthoni and Francis Anene reside in areas of Kibera where a Kenyan technology firm, Afribit, is undertaking an initiative encouraging the use of Bitcoin among residents.
Ronim Dawida is the co-founder of Afribit.
We started the journey of Afribeat Kibera Circular Economy in 2022.
And the main reason we started this was the groups that we were working with, a lot of them had issues accessing financial services. from the traditional finance system.
Most of the guys, specifically the groups that we were working with then, They did not have documentation to have a bank account.
They could not qualify for digital financial tools.
So we thought, how would this gap be filled?
And one thing that we were very sure about was Bitcoin because...
Bitcoin is fixed in supply. There will only be 21 million Bitcoins forever.
Bitcoin is a store of value for many. But before you go into store of value, We had to show them how could this be used as a means of exchange.
Ronim Dawida and his team regularly undertake what they refer to as community meetups. where residents in the area are taken through learning sessions to understand more about Bitcoin.
One of those who attends the community learning sessions is Ruth Kwamboka, a local merchant in the area.
Ruth now also accepts Bitcoin as a form of payment from her customers.
I own a general shop where I sell maize flour, wheat flour. bananas, oranges and vegetables.
As a merchant, I have accepted this Bitcoin And many people in my area Kibera also use this Bitcoin as a mode of payment.
I've got many customers who use this Bitcoin as a mode of payment. and they are able to pay for any commodity they need.
There are those, however, who feel that caution needs to be exercised when promoting the use of cryptocurrency in a community.
Edward Kusewa is a Kenyan economist. There's the risk of volatility.
Crypto is exposed to a lot of external shocks and therefore these external shocks bring fluctuations.
That's a huge risk for communities. There are also some small infrastructural risks that exist, lack of mobile penetration, especially in the informal settlements, and that is another bottleneck.
Michael Kaloki reporting from Nairobi. And Leith Kalaf from AJ Bell.
I'm just going to pick up on that last point.
I absolutely get that cryptocurrency enables financial inclusion, but at what risk to people with limited resources?
Yeah, absolutely. Because as your last guest there was saying, it's hugely volatile.
So it's all very well using it for transactions and very low transaction costs. particularly where traditional financial services are not providing any other options.
But of course, if you're holding on to it, then that can be a hugely costly endeavour. you know, the price of Bitcoin happens to drop, which it can do very sharply.
Now, that's not been the experience in recent months because Bitcoin is on a bit of a charge largely driven by you know the president of the united states really throwing his weight and the government's weight weights behind it but in a way that also exacerbates the risks a bit because that does tie it to the political cycle in in the us as well and it's already a really volatile asset so Yes, transaction costs may be low, but the actual volatility of what you're holding means it's probably not great for paying your mortgage or receiving your salary because it is so volatile.
Thank you very much. Now, to Denmark, where a deal has been signed that's going to see the world's first tax on greenhouse gas emissions from...
In other words, attacks on burping cows and sheep, which emit methane as part of their digestive process.
The Danish government says this will mean the biggest changes to the Danish landscape in more than 100 years.
Lexi O'Connor's been finding out what farmers in Denmark think of the idea.
We start a crop early in the morning, three o'clock in the morning, in the milking parlour.
In Denmark, farmers know big changes are ahead.
My name is Thomas Holmøller Søgaard. I run the farm Taastup Jersey together with my wife, Kristina, and our three kids.
This is a family-run organic farm. I asked Thomas how he feels about climate change.
Does he feel the responsibility? Of course I'm thinking about it.
You know, we see the change. The winter isn't that cold anymore.
And also when it starts raining, it will rain more.
Let me take you back to last summer. Elsewhere in Europe, farmers were protesting but in Denmark, farming unions were sitting around the table. negotiating with the government and green groups, thrashing out the details of a deal that will revolutionise Danish agriculture. transform the country's landscape and introduce the world's first ever tax on greenhouse gas emissions from animals.
You know, we've been running this farm for one and a half year.
And then the politicians started talking about attacks.
It was really bad news. It was a bad day.
We talked for a while about how Thomas feels about the deal.
He is on board, he says, but he does have some worries.
The tax is only on Danish products. So if you buy a liter of Danish milk, there will be a tax.
But if you buy a liter of German milk, there are no tax on that.
And that's really not fair. I put some of these concerns to the Danish Agriculture Minister, Jacob Jensen.
Well, this is actually something they can avoid by introducing new technologies and we also support them financially with national funding, EU funding as well. to give them some tools actually to avoid paying the tax.
And that is the whole idea that it's not a goal itself. for us to get a revenue from the farmers from paying the taxation.
But it is a goal that they should change the way they produce the food.
Thomas thinks he's in a better position than many other farmers.
As an organic farmer, he was already thinking about a lot of these issues.
It will be difficult to do all the things they want, but of course we will try.
But it's better to know that this is what we are doing.
And now... Now I can plan my farm the next 10, 15, 20 years after this.
It's better for me that we take everything in one and then I can make some long-term strategies.
Lexi O'Connor reporting. Now, the biggest names in video gaming are showing what they've got at a trade fair called Gamescom in Germany.
Our gods have forsaken us for fear of the coming darkness.
Who's the man behind the mask? I'm Batman The days fly by when you love what you do Now you heard their Law of the Fallen 2, the Lego film Batman Legends of the Dark Knight and PVKK, all of which are due for release in the coming year.
Revenue in the global games market is forecast to hold at just under $190 billion this year, but there have been challenges.
Layoffs, studio closures, that kind of thing.
Let's go live to Cologne in Germany and my colleague Laura Kress who's there.
Just tell us a bit about what's around you at Gamescom, Laura.
Hello there, Andrew. Yes, it's very, very busy here today.
As you say, I'm at the Köln Messe, the exhibition centre here in Cologne.
This is the media day. And then we've got Thursday, Friday and Saturday where over 400,000 people are expected to attend here.
And we've got 1,500 exhibitors from over 72 countries.
So it is a really, really busy event. where people come to play games, but also perhaps make business with them as well.
Okay, now you're into all of this yourself, I know.
What are you seeing around you that's new, that's exciting?
Well, this is the thing, Andrew. You know, as you say, there are these big, massive games.
So today I checked out actually a presentation for the new James Bond game, 007 First Light.
And what was really interesting with that is by a Danish company, you'd expect maybe a British one, but no, they've taken on the mantle And what they're trying to do is they've created a completely brand new James Bond character.
So it's not one that we're used to seeing in the films.
And because of that, it means they can do their own sort of original story with it.
So that was really interesting to see. I did also check out a bit more of a scarier game.
This is one of the most wishlisted games ever. that's being showcased here, something called Resident Evil Requiem.
And that's kind of a big survival horror game.
And that's also a big series, you know, that...
Next year is their 30th anniversary for this game.
It's by a Japanese company called Capcom.
That's what makes these kind of places interesting.
You get these bigger games. Also, really tiny games, because as you say, the market is quite oversaturated.
So these trade fairs can really be a lifeline for these companies to showcase what they're doing.
OK. Does it feel like an industry in rude health?
I mean, it's worth huge quantities of money, but there have been problems that they've been working through.
Yeah, absolutely. And you were playing the trailers there to get a spot on opening night live last night.
You know, it could be hundreds of thousands. of dollars so in one sense it's an industry that's growing that's booming that's trying to spend a lot of money You know, this industry this year alone is worth about $225 billion, much more than music or film.
But equally, as you say, there are these challenges.
The demand isn't entirely there anymore, like we saw during the pandemic, unfortunately.
So that does mean there have been layoffs.
But I think Just walking around here, it's really hard not to feel a little bit positive about the way the industry is still going.
Seeing everybody's faces light up as they play these games, it is heartwarming to see.
Excellent. I get the sense Laura's enjoying herself.
Laura in Cologne in Germany at Gamescom, which we'll keep you in touch with.
Here online, there's more about the stories we've been talking about today at bbc.com slash news.
And from me, Andrew Peach and the World Business Report team.
Thanks for listening to the programme.
