When Li Lingyue placed her order for Luckin Coffee's Tamarind Americano on October 13, she wasn't just buying a warm beverage. She was securing a piece of a cleverly constructed crossover universe, created through a collaboration between the popular Chinese coffee chain and the blockbuster video game Honor of Kings. The beverage, dramatically titled Mask of Pain, is a freshly brewed light red tea whose refreshing taste is linked to the game's synonymous iconic equipment.

The collaboration extends to physical items. Cup sleeves are adorned with designs of iconic game assets like the Witch's Cloak and Famous Blade. Meanwhile, the collectible lineup, from tumblers and paper bags to stickers and keychains, was meticulously crafted to mirror the game's aesthetic, creating an immediate and nostalgic consumer connection.

A five-drink package even came with the full set of badges, while 10 hero-themed cups reimagined popular characters like Lan, Li Xin and Daji in modern urban styles.

"Aside from the cup bearing the image of my favorite game character, I also got a hot-stamped badge," Li said. "I originally wanted the set with the keychain. Even though I ordered it first thing in the morning, I failed to get it as it had sold out almost instantly. You can imagine how popular a collab between a popular game and a trendy coffee brand can be."

"To be honest, I'm not even really a coffee person," she admitted. "But the set was reasonably priced, so I bought it more for the collectibles. My friends who are genuine coffee lovers? They've all got at least one."

Li's experience is a snapshot of the explosive growth of the crossover economy in China. Driven by young consumers seeking emotional connection and self-expression, collaboration between brands, intellectual properties (IPs) and cultural institutions is creating new consumption paradigms and reshaping retail landscapes.

Policy push

Luckin's success with the Honor of Kings collaboration is no accident; it's the latest proof of a well-honed crossover strategy. In September 2023, the coffee chain made national headlines with its partnership with Chinese liquor giant Moutai, launching the controversial yet wildly popular "sauce-flavored latte." Priced at 38 yuan ($5.32) per cup and infused with a hint of the potent and pungent liquor, the drink quickly went viral, selling 5.42 million cups on its first day alone and generating over 100 million yuan ($14 million) in sales.

The co-branding not only drove tremendous traffic to Luckin stores but also sparked widespread social media discussion, demonstrating the powerful market pull of an unexpected brand alliance.

This sales model is encouraged by government policy. In September, the General Office of the Communist Party of China Central Committee and the General Office of the State Council, China's highest state administrative organ, issued a special action plan for boosting consumption, advocating for the deeper integration of online and offline commercial, tourism, cultural and sports consumption, as well as innovative consumption scenarios.

Most recently, on September 30, the Ministry of Finance and the Ministry of Commerce announced a notice on pilot programs for new consumption formats and models. These programs, piloted in about 50 major cities, will be supported by central fiscal subsidies—with 400 million yuan ($56 million) for each city with a permanent population exceeding 5 million, and less for other cities. According to the document, support should be given to crossover collaboration with famous IPs, and the development of themed stores and immersive consumption spaces that leverage local culture, historical IPs and domestic brands.

This policy push aligns perfectly with the shifting consumer mindset. "Young people's consumption psychology is undergoing a profound shift, moving from an emphasis on functional utility to emotional resonance, from mass conformity to personal expression," Xiong Xing, an associate professor with the School of Economics, Chongqing Technology and Business University, told Xinhua News Agency. "The crossover economy accurately captures this trend, endowing products with diverse value through scarcity, customization and storytelling, thereby giving rise to new consumption paradigms."

According to a report published by Xinhua on July 31, the crossover economy in China is projected to approach 300 billion yuan ($42 billion) in scale this year.

Wan Zhe, a professor with the Belt and Road School of Beijing Normal University, told newspaper National Business Daily that the policy will help stimulate innovation vitality in the industrial ecosystem, creating new business formats and employment opportunities.

"For instance, when sports brands collaborate with intangible cultural heritage promoters to launch distinctive products, this can drive coordinated development across the entire industrial chain, ranging from design and production to services, forming a complete closed loop for the transformation of cultural and economic value. This not only revitalizes the development momentum of traditional industries but also creates more job opportunities for the emerging market," Wan added.

Wide applications

The crossover wave has swept across broad-ranging sectors, with cultural and museum IPs becoming particularly hot assets.

In Chongqing, a pop-up event launched in July for domestic doll and fashion brand Fufusoul proved immensely successful. A limited-edition co-branded doll, inspired by Chongqing's city flower, the Camellia, quickly became the city's most coveted souvenir.

"This specific doll isn't available in other cities. It's very meaningful as a gift for friends," a tourist surnamed Pan from Ningbo, Zhejiang Province, told Xinhua.

Similarly, the Chongqing China Three Gorges Museum has partnered with commercial brands to create derivative products based on its collections. One collaboration involved classical Chinese painting masterpiece Night Revels of Han Xizai, resulting in a Lego-style figurine named MASK Xizai that sold like hotcakes, flying off shelves to become an instant collector's item.

"Cultural elements can empower commercial brands, making them more exciting and meaningful," Chi Lin, Director of the Cultural Creation and Cooperation Department of the museum, told Xinhua. He noted that a collaboration between the museum and tea brand Chagee, based on a historical robe gifted from Ming Dynasty (1368-1644) Emperor Chongzhen to female general Qin Liangyu in recognition of her military merits, boosted museum traffic by 20 percent during the event. "The popularity of 'museum co-branding' is a vivid reflection of consumer cultural confidence."

Chi emphasized that the next step is to focus more on refining the cultural essence of relics and developing co-branded products that are educational and practical, to cater to young people's interests.

The film industry is also leveraging this trend to attract young audiences. Wanda Film, one of China's largest movie theater operators, has figured out a winning formula. By partnering with other brands for promotions, it is highly successful at getting young people to go to the movies. These campaigns directly lead to ticket sales, with the overwhelming majority of those sales coming from early 20-somethings. Data of a Wanda Film promotion in June showed a 30-percent movie-viewing conversion rate from some past activities, 85.5 percent of which came from users under 25.

"We found that young people are highly interested in innovative experiential cinema activities," Li Jinlei, General Manager of Wanda Film's subsidiary Mtime, told newspaper China Youth Daily. "They not only check in and buy merchandise but also get to socialize. The whole process provides a rich entertainment experience, effectively drawing them back to cinemas."

As young consumers like Li Lingyue continue to seek out products that offer both a tangible item and an intangible connection, the crossover economy, fueled by policy support and brand innovation, is poised to remain a powerful engine for China's ongoing consumption upgrade. BR

Copyedited by Elsbeth van Paridon

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