Luxury also looks at the metacosm. Coach launched the first NFT (non-homogeneous token) series to commemorate the 80th anniversary of the brand's founding, LV's recent launch of 30 NFT products were valued at between $20,000 and $20 million by netizens, and fast fashion brands such as Forever21 are also eager to try the meta-universe. Industry insiders pointed out that NFTs can give digital products uniqueness, making them more scarce, and scarcity is the most effective pricing tool, so NFTs promote brand premiums. However, there is a certain bubble in the value of digital assets pointed to by the current NFT, which is caused by the excessive enthusiasm of early participants, so NFTs are not suitable for ordinary brand consumers.
The meta-universe market has spawned a number of NFT product trading platforms, such as LuxFi.
The Original Universe
The meta-universe seems to have become the wealth code that all major brands want to firmly grasp at the moment. Recently, Coach launched the first NFT (non-homogeneous token) series to commemorate the brand's 80th anniversary; earlier this year, Gucci launched virtual sneakers, priced at $12.99 per pair, which users can use in the Gucci App and VR social platform VRCHAT after purchase, or try them on the game platform Roblox; in September this year, Balenciaga partnered with the electronic virtual game "Fortnite Fortnite". New clothes and in-game items were created for the four characters in the game.
The Morgan Stanley report shows that when the metacosm arrives, the luxury industry will benefit. Digital demand for fashion and luxury brands will rebound from its current low levels, allowing the luxury industry to increase sales by $50 billion by 2030. Over the next eight years, NFTs and social gaming will increase the total potential market size of luxury giants by more than 10%, and the EBIT profit of the entire industry will increase by about 25%.
The meta-universe market has gradually entered the public eye, and has also spawned a number of NFT product trading platforms, such as LuxFi, THEDEMATERIALISED and Roblox. Among them, the Roblox platform has cooperated with luxury brands such as Coach and Prada to sell some virtual or real items.
In addition, the prototype of NFT products is also spreading to fast fashion brands. For example, on December 21, fast fashion brand Forever21 launched a virtual store on the Roblox platform; in December, Tommy Hilfiger launched a virtual clothing line for Roblox platform users, including 30 virtual fashion items; and in August this year, Ralph Lauren launched a new partnership with the 3D virtual social platform Zepeto to offer sales of digital fashion collections.
On November 11, the first approved meta-universe industry association in China was inaugurated, and the news of meta-universe continued to ferment, and the stock price of enterprises stained with the concept of meta-universe rose for many consecutive days. It seems inevitable that such a new track will become the focus of major brands.
The gold absorption is considerable
Luxury brands have long tried to develop digital products. In 2019, LV partnered with LOL (League of Legends) to create an exclusive hero skin; in the same year, MOSCHINO sold the brand's virtual items in the video game The Sims 4; and Hermès released a game app called H-pitchhh in 2018.
The above products can only be said to be shallow, and the actual income generated is difficult to compare with this meta-cosmic wave. For example, the summer skin created by LV's women's royal design director for the hero Zhen Chiana in LOL, rough statistics in reality the total price is close to 100,000 yuan, and in the virtual world, LOL players only need a few tens of yuan to get, far lower than the price of the corresponding products in real life.
In contrast, LV's recently launched NFT products can be described as amazing. At the beginning of August this year, LV released the self-developed free mobile game "LouisTheGame", LV put 30 NFTs in the game, and these 30 NFTs were valued by netizens between 20,000 and 20 million US dollars.
According to NoFungible data, the NFT market transaction volume in the first quarter of 2021 alone has exceeded 8 times that of the whole year of 2020, about $2 billion. As of April 2021, six major NFT crypto art platforms, including SuperRare and MakersPlace, have sold 190665 works of art, with a total market capitalization of about $550 million.
Morgan Stanley noted: "The current digital revenue for luxury brands is not worth mentioning, but we think this situation will change." Metaverses are still years away, but NFTs and social games (such as online games and concerts attended by human avatars) are good opportunities for luxury brands in the short term. ”
There are bubbles and risks
In addition to the considerable gold absorption power, the huge traffic that the meta-universe sits on is also a weapon to attract brands. "The core of the Internet virtual economy is the traffic economy, which can gather players and attract users through the way of the meta-universe, for major brands, the success of the meta-universe does not matter, the key is to occupy the traffic outlet as soon as possible and increase brand exposure." Professor Pan and Lin, executive dean and professor of the Digital Economy Research Institute of Zhongnan University of Economics and Law.
He further pointed out that the epidemic has stagnated offline activities in many countries and regions around the world, and has also objectively promoted the transfer of offline activities to online, such as concerts and brand store sales to the virtual world where the meta-universe is located. Among them, brand store product sales emphasize user immersion experience and socialization, so it will also accelerate the layout of the metaverse.
Behind the prosperity of the metaverse, bubble risks are also surfacing. "NFTs are able to give uniqueness to digital products and make them more scarce, and scarcity is the most effective pricer, so NFTs drive brand premiums." However, there is a certain bubble in the value of digital assets pointed to by the current NFT, which is caused by the excessive enthusiasm of early participants, so NFTs are not suitable for ordinary brand consumers. Pan and Lin said bluntly.
He further pointed out: "In China, the metacosm promotion must be institutional first, and there is a sound framework of trading and legal systems before it can be promoted. In addition, there are many problems in the metaverse, such as users paying too much attention to the price of digital products and ignoring their actual value. For a long time to come, there will be no significant difference between shopping in the metaverse world and the current e-commerce shopping experience. ”
Jiang Han, a senior researcher at Pangu Think Tank, also said, "Current technologies such as AR, VR and blockchain only provide technical possibilities for the metacosm, but they are not enough to support a system that completely replaces daily offline life." Based on this, the metacosm is still at the conceptual level. So if the market continues to explode the meta-universe, it is undoubtedly a huge risk and bubble."
Beijing Business Daily reporter Zhao Shu commented on Lin Yuwei