More brands are exploring the metaverse as part of their Lunar New Year marketing efforts

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With the zero-Covid policy implemented by Beijing over the last two years, Lunar New Year celebrations were subdued in China. However, in 2023, the government lifted the stringent Covid-19 restrictions, and as a result, there is widespread optimism among both consumers as well as brands. To capitalize on the projected growth in consumers spending during the 2023 Lunar New Year, an increasing number of brands in the mainland are exploring the metaverse as part of their new year marketing efforts in China.

• In the lead-up to the Lunar New Year, DFS Group, the luxury travel retailer in China, announced the launch of a digital platform DFS World that features interactive experiences and offers. From fashion to jewelry and food, shoppers can choose from a range of products on the metaverse platform. The firm has also launched gamified features by allowing visitors to join the Fortune Rabbit Scavenger Hunt. Through this, visitors can win a Fortune Rabbit NFT.
• For the Chinese New Year celebration, The Sandbox, the metaverse infrastructure provider, announced plans to launch events in the metaverse in January 2023. In partnership with Studios in Mainland China, Taiwan, and Hong Kong, The Sandbox users will be able to relish innovative metaverse experiences. Some of the brands that have partnered with The Sandbox to create immersive experiences include PCCW, MTR, The CGame, and Chili Game, among others.

MTR, for instance, has become the first transport operator in the region to enter the metaverse. As part of its Lunar New Year marketing efforts, MTR, in collaboration with The Sandbox, will take users on a time-traveling journey between the futuristic MTR metaverse railway station and the 1980s Choi Hung Station.

• In January 2023, McDonald's, the global fast-food chain, also announced its foray into the Chinese metaverse sector to capitalize on the growing popularity of the digital world among consumers. The firm entered into a strategic collaboration with Karen X Cheng to launch an interactive campaign commemorating the Lunar New Year. The partnership also includes the launch of an immersive experience that is hosted on Spatial.

Metaverse has also gained rapid adoption in the Chinese e-commerce sector ahead of the Lunar New Year period. The e-commerce growth has slowed down in China, after recording a high growth period over the last decade. This has led to growing innovation in the space in 2022 and the trends are further continuing in 2023. With firms like Taobao and Tmall innovating in the metaverse space, integration of digital worlds with shopping experience is foreseen as the next growth driver for the Chinese e-commerce industry.

• Ahead of the Lunar New Year, Taobao launched its first live stream shopping event in the metaverse. The initiative allows shoppers to place orders through big advertisement screens. From virtual try-on to 360-degree product browsing options, and other benefits that elevate shoppers' experience, firms are innovating increasingly in the space. With 800 million active users across the country, Taobao is one of the leading players in the Chinese e-commerce market, and these metaverse initiatives will further strengthen the firm’s position in the domestic market.
• In January 2023, Tmall, the luxury shopping platform, launched a digital exhibition in its metaverse space, Heyspace. The exhibition showcased a curated collection from over 20 brands across different industry verticals. The metaverse space allows shoppers to view products in 360-degree as well as receive virtual consultations. With growing competition in the Chinese e-commerce market, Tmall has been steadily growing its investment in the metaverse space over the last few quarters. TechInsight360 expects the trend to further continue in 2023.

From the short to medium-term perspective, more and more Chinese and global brands are expected to mark their foray into the metaverse sector. As consumers continue to demand innovative and immersive experiences from their favored brands, the investment in the space is projected to grow significantly over the next five years in China. From e-commerce shopping to online gaming, the metaverse industry is poised to record strong growth in the country.