How Luxury Brands Can Enter China’s Crypto-Forbidden Metaverse
Despite the NFT boom in the West, when it comes to setting up digital offerings in China, the strict regulation of the metaverse has, to date, deterred luxury brands. Not only is there no resale market when it comes to crypto-assets, but digital collectibles also have low prices, which limits how much profit a brand can actually make from minting NFTs. the low.
The Chinese metaverse still exists, which means international luxury brands need to adopt tailor-made promotional strategies. However, this should be seen as a marketing and promotional activity, rather than being driven by the financial goal on which the West’s multi-million dollar NFTs thrive.
Presenting research from Collaborations and Jing drops‘ latest market report: NFT collaboration: the luxury metaverse opportunityHere we detail three types of partnerships that can help foreign luxury brands penetrate the Chinese metaverse:
Popular Art Toys IP
Collaborations between luxury brands and art toys are expected to represent an $11.7 billion market in China by 2024, and these partnerships can be expected to expand to the metaverse as art toys are going digital.
In December 2021, Gucci announced a collaboration with Chinese pop culture intellectual property marsper, a virtual character transformed into collectible figurines. Marsper, with “Born to Love” as its core value, has partnered with various artists around the world to express its concept from different angles. The collaboration was announced through the image of three Marsper characters dressed in suits from Gucci’s Aria collection. While it’s still unclear whether the figurines will be introduced as NFTs or physical toys, the collaboration demonstrates Gucci’s commitment to incorporating more elements of Chinese youth culture into its products. Moreover, it demonstrates Gucci’s ambition to promote its presence in the Chinese digital world by collaborating with a virtual IP address.
Another recent example, in January 2022, Moncler became the first luxury brand to partner with POP MART, China’s top art toy brand by market share. The collaboration included the MEGA COLLECTION 1000% MOLLY × MONCLER SPACE and was limited to 2,000 collectibles worldwide, creating a lot of hype among Chinese art toy enthusiasts. Other brands are expected to follow suit, as art toys are loved by a huge number of young Chinese consumers.
chinese video games
Moreover, luxury brands are no stranger to video game trends in China. Louis Vuitton, MAC Cosmetics and Tesla are some of the brands that have introduced in-game content to high-profile players such as League of Legends, honor of kingsand game for peace. As major gaming IPs enter the metaverse, luxury brands can transfer their in-game presence, similar to how users can dress up their avatars in virtual luxury outfits in the socializing game “Taobao Life from the Taobao e-commerce platform.
Chinese idols and local talents
The involvement of major Chinese KOLs has been proven to generate NFT hype. PHANTACi, a streetwear brand co-founded by Mandarin pop idol Jay Chou, released its first NFT offering “Phanta Bear” in January 2022; the NFT was limited to 10,000 copies at $974.60 (RMB 6,200) each and sold out in 40 minutes – of which 3,000 were sold in the first five minutes.
In October 2021, Jay Chou co-launched a limited edition art toy called “PUNKCAT STING” and used NFT technology for authentication. In May 2021, A Duo, who rose to fame through the talent contest Sisters making waves, became one of the first mainland Chinese artists to sell a song as an NFT. His single Know about water was purchased for $47,000 at auction, with all proceeds going to charity. A duo could pave the way for more Chinese musicians to protect their frequently abused intellectual property rights using NFTs, bringing in more potential partners for luxury brands to work with.
Chinese designers can also be instrumental in helping luxury brands gain traction in the Chinese metaverse. For example, in September 2021, Chinese digital designer Stephanie Fung worked with Scottish whiskey brand Glenfiddich to develop and launch a limited edition NFT fashion collection named “The Filigree Aesthetic”. A skilled designer like Fung can dramatically reduce the time it takes to integrate a foreign brand into an immersive Chinese virtual world.
While actual KOLs are useful, brands can also work with digital KOLs. China’s impressive virtual idol sector presents considerable opportunities for collaboration, especially when real-life idols carry unprecedented risks of “moral faux pas” in China. According to market research firm iiMedia, China’s virtual idol market has reached $543.51 million (RMB 3.46 billion) in 2020, up 70.3% from 2019, and is expected to reach around $970 million in 2021.
These AI-developed characters powered by advanced animation technologies are loved by huge Chinese anime, comics and games (ACG) fans, with around 80% of Chinese netizens spending around $155 per month. for them. An endorsement by one of the top virtual idols, like the aforementioned Ayayi, could significantly expand a brand’s consumer base. Alternatively, brands could also develop their own virtual ambassadors for the Chinese metaverse.