Introduction
According to Artnews, non-fungible tokens (NFT) started to be popular in the world in 2021. Well-known NFT projects like CryptoPunks (created by Matt Hall and John Watkinson), Nyan Cat (created by Chris Torres) and Bored Ape Yacht Club (created by Gargamel, Gordon Goner, Emperor Tomato Ketchup and No Sass) have been the talk of the town. Some investors have questioned whether NFT has already reached its peak in the digital market. From different NFT projects launched in Asia, we can foresee the NFTs in Asia are going to be the next big market. In this article, we are going to discuss the coming NFT trend in Asia and the reason giving rise to their success.
First and foremost, based on the graph produced by the Bankless Times, the term ‘NFT’ reached the highest frequency for an online search in the April of 2021. This directly reflected that NFTs have raised a strong online search interest for global citizens in this digital era. The market for non-fungible tokens (NFTs) in the Asia Pacific region is projected to expand rapidly over the next few years. According to forecasts by ResearchAndMarkets.com, the NFT industry in Asia Pacific was expected to grow at an annual rate of 54.8% to reach US$22.6 billion in 2022. This strong growth is projected to continue over the following years, with the industry anticipating a compound annual growth rate of 40.1% from 2022 to 2028. If these projections hold true, the overall spending on NFTs in Asia Pacific could increase nearly sevenfold from US$22.6 billion in 2022 to US$154.4 billion by 2028.
Apart from this, China has been the utmost important country contributing to the NFT industries as it is one of the world’s largest markets for crypto-currencies. Crypto-currencies are a concept that the currency of NFTs is enabled by the Blockchain. Blockchain is a network that works peer-to-peer. There is Blockchain underneath every NFT and it is the autonomous nervous system that runs invisibly underneath many of these worlds. It’s managed and controlled by a network of independent stakeholders that render it decentralised and immutable. It helps to provide ownership and protection in the digital world.
An image showing a man sitting in front of a computer
Crypto-currencies differ from the physical money, which is not launched by the local Government and other Financial Institutions. But they have similar functions, which are buying, selling and transferring. For example, the state-backed broadcaster CCTV has launched 34,000 collections of NFT on Alibaba’s and Tecent’s NFT market in total and each of them is sold at the US $4.72. When it is released online, the price of it has inflated around 10 times and reached over the US $40.
NFT Cases in China
NFT diagram
As mentioned above, the NFT market has turned to the limelight in Asia. There are a lot of NFT Cases in Mainland China. To start with, there are 9 different forms of NFTs, including Arts, Music, Video Game Items, Digital Trading Cards, Sports Moments, Memes, Domain Names, Virtual Fashion and many other forms NFTs. Which Artworks are the most popular item of NFTs nowadays in Mainland China Digital Market. NFTs are viewed more as a derivative of blockchain technology rather than a tradable asset in China. They will add their own ideas to the secondary contracts in order to derive their beliefs from the primary blockchain.
As Mainland China is dedicated to protecting the safety of the local citizens, the Government there has set up laws and regulations that are closely related to NFTs or any other virtual currency that is not launched by the local government. Users can only buy and collect NFTs but they are prohibited from trading or reselling their purchases. For example, the local citizens in China can buy the NFTs that were launched by their favourite influencer or key-opinion leader (KOL), but they cannot trade and sell the NFTs with others. China even launched a China official Service Network for the blockchain underneath NFTs and the metaverse, which is the Blockchain-based Service Network (BSN) in order to protect the citizens’ property by setting up the foundation of every NFT.
Aside from that, one of China's popular lifestyle-sharing platforms, Xiaohongshu has launched its own digital collection platform, which is R-SPACE. Xiaohongshu is an online platform invented by Tencent and has a wide variety of categories, including beauty, fashion, and entertainment. Their NFT project is related to a variety of digital collectables and virtual clothes for NFTs based on technological elements. Nonetheless, the customers may login into their personal accounts and start to appreciate the artworks they have purchased and the artworks that are owned by other users after buying the R-SPACE’s NFT.
R-SPACE in Xiaohongshu
For more information, the NFT programme, R-SPACE promoted by Xiaohongshu will organize virtual events regularly in order to celebrate some important festivals in China. Examples like the ‘Metaverse Temple Fair’ held by Xiaohongshu. They have invited 22 designers to join this temple fair and create a large variety of art pieces in order to create ‘blind boxes'. The meaning of ‘blind box’ is to make it become a hidden content, it’s similar to a lucky draw. There are a total of three types of ‘blind boxes’. ‘Xinjia Digital Blind Box’, ‘New Clothes Digital Blind Box’ and ‘New Goods Digital Blind Box’, are all limited editions. The ‘Metaverse Temple Fair’ is held to celebrate the utmost important event in China and to share the Chinese New Year vibes with local users. Many other NFT cases in China are worth knowing, go check them out after watching this article!
The Reason leading to the success of R-SPACE
1. The quality of the digital items cannot be affected by elements in the physical world
Example of two characters in ZEPETO app launched by QQ
As mentioned above, the NFT in Xiaohongshu, ‘R-SPACE’ is a platform that includes digital collectables and virtual clothes. By referring to Sina.cn, the virtual clothes in R-SPACE are similar to the scheme launched by QQ, ZEPETO which was popular a decade before. You will be able to change the clothes or shoes of the characters in both R-SPACE and ZEPETO after you purchase them on XiaohongShu and QQ respectively, this attracts a lot of youngsters to purchase. For more information, R-SPACE even collaborates with local artists and designer brands and creates 18 designer items that are limited edition. For example ANNAKIKI, CHENPENG, FENGYI TAN. Wide attention is sought.
With the progress of the era, the quality of digital items will only improve instead of being affected. The R-SPACE science lab presented by Xiaohongshu is an official way to share the latest updates and proposals. We can foresee the quality of R-SPACE will be upgraded although there are various changes in our physical world.
2. Highly interactive, with online community and conversation
Another major reason causing R-SPACE to be a success is its perfect and complete system. In the R-SPACE science lab, there are daily blogs and posts in order to update the NFT customers. In every blog, users can comment and like under the official page of R-SPACE. Questions like ‘Am I able to sell the NFT that I have purchased in R-SPACE?’ or ‘Can I trade my NFT with others?’ will be raised by the buyers. The online community and conversation in R-SPACE are completely open and transparent for everyone to read it. Which can fully utilize the peer-to-peer features of Xiaohongshu’s NFT.
Apart from that, there are a lot of festive events held by R-SPACE in Xiaohongshu. For example, an NFT campaign celebrating 20th May 2022. The Arabic numerals of 20th May 2022 are presented as 520, which is pronounced as Wo Ai Ni (我愛你) in putonghua. 520 is one of the important festivals for Chinese lovers. R-SPACE invited users to buy an NFT and send it as a valentines gift for their lover. R-SPACE even held a raffle on that day to give away 3 NFTs to people who get good breaks. The increase in interaction between R-SPACE and the Xiaohongshu users attracts a lot of users to join the campaign and enhance their images and reputation.
Nonetheless, R-SPACE also held a camping campaign. Due to the hit by the pandemic, many of them stayed home very often. On the 25th of May 2022, Xiaohongshu collaborated with their NFT platform, R-SPACE. The users may explore the camping park during the event period to take free NFT products. This event is under the spotlight in the China Digital Market.
3. Sustainability and greener fashion
In this era, everyone looks into the sustainable development of a company when making decisions. R-SPACE is a platform that includes an array of digital collectables and virtual clothes. The presentation of R-SPACE is not in a physical way. It protects the sustainability of the environment.
For example, the digital Fai Chun presented by R-SPACE. Fai Chun is a traditional decoration that we will usually use when it's Chinese New Year, words like ‘stay healthy’ and ‘stay safe’ are commonly printed on Fai Chun. To make everything innovative, R-SPACE in Xiaohongshu has launched a 3-dimensional AR Fai Chun campaign instead of a physical version of Fai Chun. They are all sold at an affordable and reasonable cost of ¥9.9, which helps to promote the Chinese New Year to become more universal. It helps to lower the emission of greenhouse gases like carbon dioxide (CO2). Paper and print products occupied around 1% of emissions of CO2 according to the Cool Climate Network. The sustainability of NFT products prolongs the appearance of the greenhouse effect. This brings our green life to the next level.
Speaking of greener life, greener and sustainable fashion is another key component proposed by R-SPACE. R-SPACE has a wide range of virtual fashion choices. Examples like the unisex collection released on the 28th of May 2022 and the formal dress collection released on the 7th of June, 2022 . By purchasing greener fashion, owners will not be limited by space and time, they can own the clothes they desire within their ability.
Conclusion: Future Direction and Risks
To sum up, the trend of NFT is currently booming in Mainland China. There are strong search interests in the Google search engine, and the interest in NFT campaigns are mushrooming since 2021. China is now having a huge market in NFT and it’s one of the world’s largest markets for crypto-currencies. For example the NFT campaign in Xiaohongshu, R-SPACE started to grow vigorously in recent months, and they got their digital collection platform. They started to succeed as they focus on greener fashion like virtual clothes for NFTs, they also specify in launching digital collectables which are all of the high quality. R-SPACE also provides a large space for buyers and owners to interact with each other. With this proof, we can predict that R-SPACE is going to be the next complete and successful NFT platform around the world.
Alternatively, the special situation of NFT in China needs to be considered as there is a presence of rules and regulations represented by the local government. It mainly focuses on the collection function of NFT and does not support the function of token trading.
Think and consider your interest beyond NFT and the risk behind it before making investing decisions! If you are interested in NFTs programmes like the R-SPACE in Xiaohongshu, welcome to speak with our expert to see how we can help you with your next marketing campaign through https://www.comms8.com/contact or request a credential through https://www.comms8.com/credentials-generic.
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