Written by “Metaverse” has become the new buzz word in the digital world and obviously also in China.
It offers a number of new and exciting business opportunities: the Internet is no longer a frontier to be conquered in China, for both individual consumers and institutional investors, and the digital environment is practically saturated. The creation of the metaverse corresponds perfectly to the need for a “novelty” in the field, creating both new business opportunities for companies and entertainment for consumers.
Chinese tech companies have started testing the ground by developing metaverse apps and investing in the VR (Virtual Reality), AR (Augmented Reality) and MR (Mixed Reality) segment. Tencent, for example, announced a joint venture with Roblox in 2019 and has since assembled a strong metaverse-related portfolio, covering everything from social media to gaming to cloud computing. Alibaba has invested in augmented and virtual reality companies as early as 2016, while Baidu launched the XiRang virtual world. ByteDance strengthened its hardware capabilities in the metaverse by acquiring VR headset maker Pico. These are just a few of the many examples of Chinese companies exploring the possibilities of the metaverse, and it already gives us a clear idea of the extent it will have in the lives of Chinese consumers.
But first let’s see, what is the metaverse?
Once a niche concept that can be traced back to the cyberpunk novel, Snow Crash, published in 1992, the metaverse has become extremely popular in recent months and even more so since Facebook changed its name to Meta on October 28, 2021.
Put simply, the metaverse is a virtual world, accessible from the web, that exists parallel to the physical world. In practice, you will have your avatar that moves in this parallel world, where it is possible to socialize, shop, play, etc. but in a more … fun way. It is also accessible using VR, AR and MR technologies which makes the experience full immersive. It is even possible to buy plots of land and build houses in the metaverse, someone recently paid $ 450,000 to be Snoop Dogg’s neighbor in the virtual world called Sandbox.
How consumers are approaching the metaverse
The metaverse continues to tickle the imagination of Chinese consumers. According to Newzoo , 78% of them are interested in interacting within game worlds, in contrast with 57% in the US and 47% in the UK. Furthermore, the data indicating that 82% are interested in the sector also feel very optimistic countries benefiting from the metaverse, and once again the numbers clearly exceed those of Western countries. Chinese gamers are venturing into new virtual worlds as fast as Silicon Valley. 16,000 trademark applications related to the metaverse have already been filed.
The peculiarities of the Chinese metaverse
A key aspect that differentiates the Chinese metaverse is government scrutiny and political censorship within a yet-to-be-defined regulatory strategy, which makes Chinese (and foreign) companies cautious after a year of regulatory constraints targeting technology, personal data protection, cryptocurrencies, and technology monopolies. NFTs, for example, cannot be traded (only collected) and cryptocurrencies cannot be used.
But there are other factors that differentiate the Chinese metaverse. For example, in China consumers see the metaverse as an opportunity to socialize and therefore use greater voice interaction, while most developments within the metaverse focus on graphics. The Chinese public is constantly looking for authentic experiences. In a country obsessed with live streaming and community participation, the voice-enabled metaverse would allow for a creative and genuine exchange.
The metaverse for companies
Why should all this be of interest to brands? Obviously, being the metaverse a “parallel” world, it creates opportunities for brands to promote themselves and sell in a completely innovative way.
With a thriving market Key Opinion Leader (KOL), a particularly interesting trend is working with virtual influencers, an industry that is expected to grow to RMB 333.47 billion (€ 51 billion) by 2023 according to iiMedia .
Virtual reality and virtual idols are already widespread in China. Their success lies in the fact that consumers belonging to Gen-Z connect more easily with these intermediaries, who resemble familiar anime characters.
One example is Ayayi, the first meta-human KOL (essentially a hyper-realistic digitized person). In May, Ranmai Technology introduced Ayayi on the Xiaohongshu ecommerce platform, garnering nearly three million views on its first post and around 40,000 new followers overnight. Today Ayayi has already joined Alibaba, recently taking on the role of digital manager of Tmall Super Brand.
Another example is Luo Tianyi, a 15-year-old virtual artist whose Weibo account (@Vsinger_ 罗 天一) has more than 5 million followers.
In view of all this, starting to consider collaborating with these types of influencers could be an innovative move to attract new generations.
With the advent of the metaverse, the online and offline worlds will be increasingly merged. A young couple may decide to shop in the metaverse, sitting comfortably at home, perhaps doing an experience in a design shop, or in a meta-market in Italy.
In conclusion, the metaverse is growing rapidly in China and young Chinese consumers have embraced these new worlds as a natural evolution, giving them new freedoms and ways of expressing themselves by building intimate social connections. There are many opportunities for brands to become part of this ecosystem. However, like the rest of the Chinese digital world, the Chinese metaverse will be different from the Western one: to be successful in the Chinese metaverse, brands cannot adopt copy-paste approaches and will need to be agile, adapting to local rules and preferences.
Welcome to the future!