Why Bytedance’s Virtual Fashion Community Pheagee Failed To Take Off In China

Pheagee, a virtual fashion community targeting China’s luxury consumers, is the latest Web3-focused company in the mainland to shut down.

The platform, which was developed by ByteDance (the parent company of Douyin) and affiliated with Shanghai Boiling Silence Technology Co., Ltd., recently announced that it will cease operations and services on April 19 “due to the company’s business needs.”

Users were advised to save all information such as wearables, try-on pictures, and videos as soon as possible before the cutoff date. Since the announcement, new users have not been able to register on the site and existing users are no longer able to purchase items. The platform will provide a channel for full refunds.

Launched on June 6, 2022, Pheagee has released digital fashion pieces from several top Chinese designer brands, like eyewear label Percy Lau, as well as individual creators. On the app, members were able save their virtual clothes in a “closet” and “wear” them by uploading photos. The platform also encouraged users to share their virtual looks and fashion opinions, with the aim of creating an active online community of fashion enthusiasts.

The digital fashion community launched a Valentines Day edit, featuring a number of its spotlighted designers, in February. Photo: @pheagee_official

The application arrived at a time when a number of Chinese companies were creating their own meta-spaces to showcase digital fashion offerings, including Xiaohongshu’s popular digital collectibles platform R-Space. Despite high hopes for Pheagee, it ultimately failed to resonate with China’s domestic consumers and achieve mainstream success.

With waning speculation in the metaverse and no solid profit model having been developed, platforms like Pheagee that lack diverse application scenarios and practical benefits have inevitably lost their charm. 

Like Tencent’s Magic Core, which was retired by the tech giant in July 2022, Pheagee’s community relied on the delivery of high-quality digital assets. However, the ByteDance platform ended up in a dilemma whereby it had unsalable products, strict regulations to navigate, and poor customer turnover. 

Independent brands that participated in the platform included ChenPeng and eyewear label Percy Lau. Photo: @pheagee_official

Ultimately though, its failure came down to its launch during an untimely point in the Chinaverse’s development. Traditional consumers felt excluded as they weren’t familiar with the technological principles needed to work the app, while many experienced Web3 enthusiasts were simply not interested in the cultural aspects of digital fashion design (the allure of tech-first platforms is often the attractive benefits like discounts and exclusive access that digital assets can offer, something Pheagee did not extensively provide). 

Pheagee’s closure offers a lesson to those pushing into China’s virtual fashion and digital collectibles scene. As of now, most consumers in the mainland are still attracted to physical products. Those wishing to survive in the nascent sector need two pivotal factors to succeed: firstly, the delivery of something that is exclusive in an increasingly saturated market; and second, the development of a long-term program that can endure the market’s volatility, which is easier said than done. 

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