“Metaverse” is the latest technology industry buzzword as Facebook rebranded itself to Meta. Metaverse crypto tokens such as MANA soared high following the announcement. One day after, the Chinese search-engine tech giant Baidu applied to trademark the term ‘metaapp’, while Chinese gaming giant NetEase also filed dozens of metaverse-related trademark applications. The trademarked phrases include ‘NetEase metaverse’, ‘Fuxi metaverse’, and ‘Leihuo metaverse’. Not to miss out on the latest trend, Tencent and Alibaba are also among the 400 plus companies in China to trademark metaverse-related phrases. With all this happening, it’s apparent that the metaverse in China has taken off.
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What is the metaverse?
According to Citic Securities, the metaverse is thought to be the ultimate form for digital survival of human beings. The new universe may include the following features:
1. Three-dimensional immersive experience
2. Digitalization of human and social relations
3. The intersection of the physical and digital worlds
4. Mass user-created content
5. The emergence of digital assets value
Building the metaverse in China will require further investments in Graphics Processing Units (GPU), 3D graphic engines, cloud computing and high-speed wireless communications etc.
Chinese companies’ development in the metaverse
In 2020, Tencent announced its concept of the “True Internet“, a concept which is said to be the new wave of internet upgrades. The True Internet is the acceleration of digital technology and real world integration.
In August 2021, ByteDance acquired leading domestic VR equipment manufacturer Pico for 9 billion yuan (USD 1.4 billion). A ByteDance spokeswoman stated that they are “optimistic about the future of VR and its alignment with [ByteDance’s] mission”. Pico would continue to focus on the Chinese consumer market while ByteDance have yet to solidify plans for its VR strategy.
Alibaba launched a Double 11 “Metaverse Art Exhibition” on its Tmall/Taobao mobile app for 2021 Single’s Day. Shoppers could receive a complimentary NFT “digital collection” for every purchase of a limited Double 11 physical product, such as a Burberry scarf. In addition, a digital avatar of Beethoven conducted the Double 11 “metaverse symphony“, where musicians played virtual NFT instruments featuring brands such as a Bobbi Brown trumpet or Coca-Cola drums. Consumers could buy these virtual products separately using Alipay.
Chinese consumers maintain strong interest in the Metaverse
According to Newzoo, 78 percent of Chinese consumers aged 14-50 are interested in the idea of socializing within game worlds, compared to 57 percent in the US and 47 percent in the UK. Amongst those interested, 82 percent are positive on possible advantages of the Metaverse vs 72 percent and 67 percent in the US and UK respectively.
Industries such as virtual reality and virtual idols are already strongly growing in China and reached 51 billion yuan (USD 8 billion) for virtual reality industry and 3.5 billion yuan (USD 548 million) for virtual idol industry – the latter is set to grow to 6 billion yuan (USD 941 million) by the end of 2021.
Even the country’s tourism industry is set to board the metaverse trend. On 18th November, officials launched a “metaverse research and development centre” at Zhangjiajie’s Wulingyuan Scenic Area, which aims to realize the integration of tourism and metaverse together.
Beijing regulations on the Metaverse in China
It is still undecided as to whether the Chinese government will support the development of the metaverse in China. Tencent remains optimistic that Beijing will allow metaverse services and products so long as they are delivered in line with Chinese regulations. China has already banned crypto-transactions and crypto-mining in 2021, but banning the metaverse may be a detriment to the country’s aims to become the global leader in AI by 2030. While the Chinese government has not explicitly banned NFTs or the metaverse, the People’s Bank of China has hinted about surveilling the space due to the risks involved.
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Key takeaways about the metaverse in China
- Chinese tech giants have started trademarking metaverse-related terms in preparation with meeting changing market trends.
- Industries such as virtual reality and virtual idols are already strongly growing in China, which may present opportunity for businesses to cater to consumer demands.
- The Chinese government has neither shown full support nor given outright bans on the metaverse and so businesses should stay alert on any sudden regulation announcements.
(Source: Daxue Consulting)