What happened
Luk Fook Holdings Limited, the Hong Kong based jewelry retailer, has spent the best part of this year planning its entry into the metaverse. On April 28, the brand announced the release of its upcoming inaugural three-part NFT collection. The group published its “Love ∞ Digital Wedding” tokens to customers on April 29, stating that buyers who spent 1,000 (6,666 RMB) on items from the company would be in with a chance of acquiring one of the NFTs, while 520 “Digital Bee” NFTs went live to the jeweler’s consumer base on May 4. The final component of the series is set to be released May 13, when 6,666 “1314 Carat Digital Diamond Ring” tokens will be available in a “meta-universe confess conference” (an online event hosted by the brand), running until May 31.
The Jing Take
Luk Fook’s comprehensive take on tokens marks the beginning of something. From now on, we’ll see more jewelry brands moving into the NFT sector — particularly within China. The luxury jewelry market's revenue jumped in 2021 (after a 4.7% decline the year before) with purchases rising 35 percent as consumers continued to spend locally, according to Bain & Company. As sales continue to rise, brands should turn to the metaverse to maintain this growth in profit and attract new consumers.
In March, Hong Kong’s T Mark diamond brand released its “Starry Sky” digital collection. A collaboration with digital collection service platform Amall.ART and AI artist Simon Meng, the drop used AI algorithms to generate NFT maps for the date selected by customers. Despite T Mark being the first jewelry brand in China to launch a digital collection featuring AI, customers were hesitant to invest. Some labeled the drop as a “scam” via the brand's Weibo page, while others expressed confusion as to how to participate.
With China’s ambiguous restrictions on digital collectibles, consumers don’t need any more uncertainty in this area; something Luk Fook should keep in mind. Additionally, subjecting investment pieces to the volatility of the crypto market is a move that needs to be navigated with precision. As of today, it’s unclear as to what measures have been put in place to secure the value of Luk Fook’s tokens and ensure their authenticity.
The (albeit slow) rise in luxury brands moving into the metaverse proves that, despite the mainland's ongoing stringent restrictions on the trading of digital goods, China is cautiously optimistic about the NFT market. Consumers across the country continue to embrace the trend and its growing dominance over the luxury goods sector. While Luk Fook aims to position itself as a virtual pioneer in the luxury jewelry NFT industry, it must remember that user experience is just as valuable as the product itself. Particularly within a country where investing in the metaverse is precarious enough.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.