The colossal scope for profitability during the prolonged 618 festival makes it a favorite among brands from every sector. For participating stores, it’s a season for testing the boundaries of e-commerce and elevating the shopping experience.
This time round, however, as fatigue sets in, some companies are banking on the metaverse. Web3’s meteoric rise over the past year has shaken the luxury industry. From LVMH-owned houses to the "petaverse," brands have flocked to the realms of Web3 to see if it’s all just hype or a virtual goldmine?
Whatever the answer, 618’s shopping festival wants in. But why does an event that has already demonstrated so many signs of unprecedented success feel the need to enter the metaverse?
China has experienced repeated waves of COVID-19 and various lockdown measures over the past year. This has hit the world's second-largest economy, leaving it with depleting financial growth and a population curtailing spending. Additionally, oscillating supply chains have heavily affected the mainland's consumer shopping habits and impacted livelihood, leaving more shoppers unwilling to splurge outside of the basic necessities.
This introduction of new strategies, like utilizing the metaverse in e-commerce models, could sway consumers back into splashing the cash. It’s unique, innovative, and a way for spenders to invest in Web3 which aligns with China’s stringent restrictions on crypto trading and virtual assets.
“Consumers always look for something new and exciting to be entertained,” Amber Wu, account director at Emerging Communications Marketing Consultancy, told Jing Daily. “COVID in China sped up the implementation of the metaverse with more people now willing to shop virtually. I think brands are considering it as great timing to throw out new games to keep consumers engaged and keep their market share.”
For a final look at the 2022’s 618 Festival, Jing Daily looks at some of the brands that took a plunge into its Chinaverse.
DearBOYfriend, an emerging Chinese grooming brand, teamed up with the popular NFT IP Bored Ape Yacht Club for the shopping period. The partnership included a gift box with a branded T-shirt, and two of the label's signature scent sprays. According to data from Alibaba, the GMV of male grooming products on its platforms surged 20-fold between June 1 and 3, in the runup to the 618, with the market expected to grow by about 13.5 percent a year. The implementation of a Web3 strategy could see this interest in grooming products grow even further.
The first 500 users who ordered Shiseido’s "Red Kidney Essence 3.0 50ml Set" through a dedicated digital collection page on May 20 were entered in to a draw, with the opportunity to win the brand's "资生堂初夏银座LIVE" digital collection.
Jack Porteous, Client Services Director at cross-border e-commerce company Smarkand Global Limited, believes this strategy was clever: “Using a competition mechanism to drive immediacy and buzz, and bring extra traffic to a key product, is perhaps the most interesting implementation of the metaverse.”
From May 21, buyers who purchased from the Levis 501 Day Crazy Legs limited series received a digital twin of the product. The digital collection was an effective incentive for purchasers. “This is a great way of capturing the excitement around digital collectibles without assigning a specific value to them,” Porteous continues. This was especially notable as Chinese consumers may still be cautious to splash out on virtual tokens with a high-price point due to future risk.
If 618’s metaverse plan will pay off is yet to be determined. However, the hesitancy of big luxury names here is notable (only Burberry took part in Tmall's 618 NFT scheme), considering the recent growth in houses keen to capitalize on the selling of virtual experiences and goods in China, such as Gucci and Dior.
Wu believes the reluctance to enter this extravaganza is centered on image. “Luxury brands tend to be cautious about their branding when it comes to new tech initiatives. They often like to test the water before rolling out, so big festivals like these may not be the perfect timing.”
Despite that, there’s plenty of room for exploration during 618. “What’s clear is that there isn’t yet an established playbook for brands entering the Chinese metaverse, so we’re seeing enormous and exciting creativity in the campaigns being run by major brands,” Porteous believes. Will this year’s 618 hail the beginning of a long and prosperous Web3 roadmap for the festival?