Alibaba’s e-commerce empire, Tmall, has launched a new zone on its mobile app dedicated to digital collectibles. This move, beyond all else, illustrates that China’s NFT boom is officially underway.
In the first round of drops, more than 50 virtual collections from a total of 40 brands, including Burberry, PUMA and Versace, debuted on the platform.Tmall is also banking on the blind box marketing strategy to amplify the launch. Consumers who make a purchase with a participating brand, such as designer toymaker Ipstation, will receive a digital blind box that contains a correlating virtual toy from the label. Each toy holds a series of interactive elements that can be experienced with assistance from augmented reality devices.
And it’s not a one-time launch: Alibaba has signaled that more digital collectibles will be added to the platform in the future. In fact, Tmall has been active in the sector previously. In celebration of the mid-year 618 shopping extravaganza, it released "Tmall No.1 Scheme" which featured 15 internationally renowned brands including Burberry and KFC. Each brand riffed on Tmall’s iconic feline logo and the graphic was sold off as a unique digital item, sparking huge online interest amongst netizens and over 210 million views of the campaign hashtag on Weibo.
These efforts come as China's startups and tech giants go to battle in the space. For one, niche competitor Xiaohongshu’s dedicated collectibles platform R-Space is building on its virtual community through creator monetization models, hyper-realistic digital clothing try-ons, and gamified collectibles for an enhanced user experience.
But despite the signs of this becoming China’s next craze, luxury is still hesitant to tap into the mainland’s Web3 market. In conjunction with the launch of its physical toy pop-up store in Shenzhen, last month Dior unveiled a series of NFTs on the Chinese collectibles market HZ.Creat. The drop was kept almost completely under wraps with minimal marketing efforts, signals that brands want to innovate in the local meta-market, but are ultimately proceeding with caution. Indeed, under close scrutiny from Beijing, companies face uncertainty around how to take the next step in the metaverse and cultivate a digital ecosystem.
This is a way for names to experiment in a low-risk environment. Unlike competitors, Tmall’s model prioritizes the purchasing of actual products and gives away digital collectibles for free. It’s a savvy way for the conglomerate to drive physical sales while expanding upon its virtual ecosystem and curating the foundations of a loyal consumer base in the metaverse.
Additionally, the model allows consumers to dip their toes into the world of Web3 in a less risky, more palatable manner. Customers will not be able to purchase the collectibles on their own or resell them, minimizing the risk of being involved in controversies or violating the country’s Web3 rulebook. The launch proves that there’s still scope for luxury to leverage its presence in the Chinaverse — and keep up with netizen’s insatiable demands — while navigating the market’s regulatory minefield.