Standing at the front of the Empire Stage, patiently waiting for the PC Music showcase to kick off, is a man dressed in an immaculate combination of white lycra cycling shorts under a netted dress cut up to the thigh and a pink PVC cap, with white leather flip flops. It is an aesthetic that says a lot about the PC Music showcase, a London-based label whose saccharine sound has been hailed as either the second coming or the sad demise of good taste.

In an age of overexposure, the PC Music collective has managed to maintain a much sought-after mystique since they emerged in 2014. Their twisted brand of hyper pop and electronica – and the inclusion of a fictional pop star on their roster – has led many to question whether it is simply one big in-joke between art school students. Those questions aside, their SXSW showcase proved the group is producing some of the most challenging, catchy and, most importantly, funny pop and dance music around at the moment.

Over the five hours of music, it was a far-reaching set with multiple high points, from Spinee’s twinkly Evanescence remix to SOPHIE’s Kitty Kat finale and AG Cook’s entire thundering set that show this is a label refusing to be confined by definitions of genre or good taste.

Doubters gathered suspiciously at the back of the venue were evidently won over within seconds when easyFun, aka Finn Keane, took to the stage. With a take-off sound effect, his hyperactive set dominated by pounding house beats, shimmering synth and sickly sweet vocal samples rolled out the carpet for the PC Music’s eclectic characters. Appropriately named after a Jeff Koons exhibition, trippy, high contrast graphics of aeroplanes and paradise islands are projected behind the decks. It feels like we’ve been thrown fully into PC Music’s kaleidoscopic parallel universe and are all just characters in their weird video game world.

Lil Data follows with a set that is, if possible, more schizophrenic in its samples, stripped back and minimal one second, crazy-paced electro the other making him one of the harder acts of the night to get on board with. But the showcase reaches an early peak with Kane West, who, aside from rocking one the strongest looks at SXSW so far with a fake Newcastle football shirt and aviators, proves that you can create great dance music without taking yourself too seriously. He weaves in synths, sirens, whistles and cow bells and at one point, raises both arms in the air as the euphoric house beats build up, looking every inch the pastiche of Norman Cook.

It is a euphoria and energy that is only built on by Danny L Harle, who creates one of the night’s most majestic moments when he drops his 2013 heavily pop-infused track Broken Flowers. But this was not a show purely about those stuck behind laptops and mixing decks. GFOTY – the first non-DJ performer – bounds on stage with two highly sculpted, bare-chested backing dancers and maniacally performs her hyper-catchy track Secret Mix complete with dance routine worthy of Daphne and Celeste. It sums up all the criticism leveled at PC Music from those who claim it signals the death knell for pop – unashamedly cute, fluffy and contrived – and the crowd go wild for it.

It’s a similar case for Hannah Diamond, the label’s bona fide pop star, who takes to the stage resplendent in a diamanté choker and crop top. I wouldn’t be surprised if the lyrics to Pink And Blue and Attachment, two of her most playful and naïve tracks, had been written all in emojis. It’s a well-crafted performance, as much about the aesthetic and choreography as the camp songs.

But this wouldn’t be PC music without QT, the fictional pop star creation of AG Cook and SOPHIE. She is an Barbie avatar figure, all silver PVC and lip gloss, whose ‘mission’ here on earth is to promote the QT energy drink. QT represents a frank and very funny comment on identity on our commercialised and advert-saturated society. Her brief set – featuring her simply miming along to her own catchy theme song Hey QT and handing out cans of energy drink while chatting on her iPhone – sums up all that is great about PC Music.

It’s probably the most bizarre performance of SXSW. In a set that is at once silly and serious, PC Music manages to turn the macho culture of so much dance and house music on its head in a single showcase.