Turning ‘Metaverse Hype’ Into Consumption in China

2021 was dubbed the “First Year of Metaverse” in China. Since its conclusion, the country has pressed ahead with the integration of the virtual world into the country’s IRL economy. Local authorities, including those in Shanghai, Shenzhen, Hangzhou, Chengdu, Wuhan, and Hefei, have included the metaverse as one of the focal points in this year’s government work reports. Such a move has been viewed as a positive signal regarding Beijing’s stance on the new technology. While some industries have been cautious, the concept has been embraced by trend-chasing market players in the fashion industry. Perhaps it’s no surprise that luxury houses such as Balenciaga, Burberry, and Louis Vuitton — known as innovators in global fashion — have been quick to seize the momentum. And so the fashion sector is believed to be one of the beneficiaries of the government’s push for industrial integration and potentially even the first cohort to achieve this here. Thus far, it has shown three main approaches in how it engages the metaverse. First is the adoption of virtual influencers, which have been regarded as the least risky option considering the uncertainties around potential government regulations on emerging technologies. Meta-humans seem to have been endorsed by the Chinese government, with the concept being applied by the authorities — including the state broadcaster. Second, the introduction of virtual outfit NFTs (or NFT-powered digital collectibles as they’ve been rebranded in the mainland). And, finally, partnerships with metaverse-platform developers to create 3D virtual experiences such as Dior’s first meta-fashion show. Such commitment was on display at the fashion week in the southeastern city of Shenzhen, which has been part of the vanguard driving the combination of cutting-edge technologies and local economic growth. The hybrid event saw a closer link between digital hype and actual consumption, with two virtual spaces — “Fashion Brand Hall” and “Fashion Livestream Hall” — as centerpieces. The former space allowed direct links to all 52 labels’ official websites or e-commerce platforms, enabling a seamless switch between the virtual and real worlds and, in turn, potential purchases. The “Fashion Livestream Hall,” on the other hand, synched up physical runway shows with the virtual space, minimizing the potential impact of COVID restrictions on real-world events and therefore incentivizing consumption. Another significant development was the “Digital Order Platform.” Shenzhen Fashion Week launched a mini-program on WeChat directing online traffic to participants while allowing a more efficient process for placing orders. The implication of such interventions (for luxury groups in particular) is that digital experiences can be a tool to complement business objectives and service-goals that are so far largely reliant on offline activities. Acting as an extension of the connection between company and consumer, they improve the customer experience and deepen loyalty. But more effort needs to be made in converting enhanced public online engagement into actual consumption. This requires brands to strike a balance between virtual encounters and a focus on physical products — to avoid considering the hyped technologies as a replacement for what earned them fame in the first place.

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Turning ‘Metaverse Hype’ Into Consumption in China