Whenever the economy is in a downturn, people tend to shift their consumption towards buying affordable luxury items.

Lipstick, though not a necessity, serves both an inexpensive and cosmetic purpose, providing psychological comfort to consumers.

During an economic crisis, consumers' shopping psychology and behavior change, with ordinary consumers becoming adept at bargaining. The economic crisis also leads to a surge in sales of affordable cosmetics like lipstick and cultural products. This phenomenon is known as the "Lipstick Effect," a theory first proposed during the Great Depression of the 1930s in the United States.

The global financial crisis of 2008 brought about a market for "lipstick." U.S. media reported that sales of lipstick and face masks began to rise, along with popular "relaxation consumption" activities such as getting haircuts and massages. This stood in stark contrast to the low sales of other bulk commodities and luxury items. The sales figures of major cosmetics giants worldwide, including France's L'Oréal, Germany's Beiersdorf AG, and Japan's Shiseido, confirmed this trend.

L'Oréal saw a 5.3% increase in sales in the first half of 2008 against the market trend. The "Lipstick Effect" started to show, and this theory, proposed in the 1930s, continued to be highlighted in overseas media.

During economic downturns, people's income and future expectations decrease. This often leads to a reduction in spending on major commodities such as buying houses, cars, or traveling abroad.

As a result, there might be more "spare cash" available for purchasing "inexpensive non-essential items," stimulating the consumption of these affordable luxury goods. Economic policymakers and business decision-makers can use this pattern to adjust their policies and strategies timely to minimize the negative impact of crises.

Thinking about the world economic and financial crises easily brings to mind the economic crises of the 1920s and 1930s. Back then, almost all industries were stagnating, yet Hollywood films soared, with lively musicals dominating, bringing joy and hope to audiences and making stars like Jean Harlow widely recognized. Some scholars point out that by promoting films through the "Lipstick Effect," other cultural and entertainment industries can also benefit from it.

From a microeconomic perspective, this is because the substitution effect outweighs the income effect. During an economic downturn, people's income decreases, which would typically lead to reduced consumption.

However, when people forego expensive goods, they tend to use their spare money to consume substitutes—"inexpensive non-essential items," creating a substitution effect. This effect is much greater than the income effect of reduced consumption due to decreased income, thus leading to the Lipstick Effect.

The "Lipstick Effect" is just one of many consumer attitudes at present, creating a certain possibility for the popularity of cultural products. For cultural and entertainment consumer goods, aside from the "Lipstick Effect," "content is king, and service is paramount" remains the unchanging rule. During economic downturns, life pressures increase, and in such times, people always need something light-hearted to help them relax.