Original author: Chenglin Pua (Malaysia)

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Nike actively cooperates with Metaverse platform

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Source: EsportInsider

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Source: CNBC website

Nike CEO John Donahoe (who himself once served as the CEO of eBay, an American e-commerce company) believes that the accelerated transformation of consumers to digitalization will continue to exist, and digitalization is driving us to create the future of retail. Nike's chief financial officer, CFO Matt Friend, once said at the earnings conference that Nike has the ability to realize its vision of owning 40% of its digital business in fiscal year 2025.

Nike is also cooperating with the Roblox platform owned by Roblox, the first stock in the Metaverse, to develop Nikeland. Nikeland is a virtual world with various Nike-themed buildings, tracks and arenas for players to participate in various mini-games, and its design is inspired by the real Nike headquarters in Oregon, USA.

Users can bounce freely on the trampoline, tag each other with nearby players to play hide-and-seek, parkour on the glowing magma track, or even play exciting and interesting dodge ball.

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Source: Roblox

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Source: comScore

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Adidas is actively deploying metaverse-related businesses

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Source: NFT Streets

In addition to its collaboration with Yuga Labs, Adidas is also collaborating with other NFT-related projects, such as Gmoney, a well-known NFT collector, and PunkComics, an NFT spin-off project inspired by Crypto Punks.

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TwitterFacebookPunks Comic website

Adidas said in this regard: Today we leap into the metaverse, and now it is time to enter a world without limits. In addition, the recent blockchain game platform The Sandbox also announced that Adidas has joined the ranks of The Sandbox metaverse.

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Source: TheSandbox official website

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LV launches NFT game

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LV Games on the App Store

In this mobile game called Louis the Game, players will play the protagonist Vivienne through six different worlds and collect 200 candles in the game to commemorate Louis Vuitton's birthday. Every time a candle is collected, a LV postcard will be randomly lit, and there is a very small probability of encountering a gold postcard. Players who win the golden postcard will be eligible for the lottery and automatically jump to an LV website, and the prize is LV limited 30 NFT digital artworks, designed by the artist Beeple (Mike Winkel-mann). Each NFT is a collectible that can only be found by playing the game and cannot be sold.

In Louis the Game, players run around and collect items. In addition, players can also use different LV letter combination printing and color matching to customize the character characteristics, and can learn about the past history of LV by collecting postcards and other souvenirs.

LV hopes to attract young customers (especially Generation Z consumers) through games. This is the first time LV has created a game and it is open to the public for free. It's a way for LV to build its brand, and it's a great opportunity for the brand to introduce itself to new consumers. Once this NFT game was launched, it ranked first in the IOS free game rankings, surpassing mobile games such as "Glory of the King" and "Peace Elite". The popularity of this game can be imagined. This game is really a promotion for the LV brand There was a wave.

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Balenciaga and luxury brands announce their entry into the Metaverse

On December 6, 2021, Balenciaga confirmed at BoF's VOICES event that it has arranged resources for the development of related industries in the Metaverse. Cédric Charbit, CEO of Balenciaga, pointed out at the event that today's consumers are still passive, and they still make follow-up shopping actions after the brand launches new products and consumers receive the news. In the world of Metaverse, Cédric Charbit believes that consumers have the opportunity to become the active party, interact more actively with brands, and increase the stickiness between each other.

He also announced the creation of an independent team dedicated to economic opportunity in the untapped digital realm of the Metaverse.

Balenciaga is also actively cooperating. In September 2021, it cooperated with "Fortnite" to create new clothes and game props for the four most popular characters in the game. Balenciaga also opened a virtual retail store in the game. These costumes are also sold as Balenciaga’s brand-new commodity entities. Users can wear the same style as their avatars in the game, further integrating the virtual and real worlds.

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Balenciaga unveils Autumn/Winter 2021/22 collection through video games

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Gucci Virtual Sneakers

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The Market for Luxury Goods in the Metaverse

Morgan Stanley, a well-known American investment bank, released a research report stating that by 2030, the NFT market size of luxury brands may reach 56 billion US dollars. Thanks to the existence of the metaverse, the demand for luxury brand NFT may also increase sharply. This can also explain why many luxury clothing brands have deployed metaverse and other related businesses one after another.

Edward Stanley, an analyst at Morgan Stanley, said that by 2030, the market size of NFT may grow to about 240 billion US dollars, of which the digital assets of luxury brands will account for 8% of this market.

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Source: Fortune Business Insights

Bain Capital, a world-renowned consulting company, and Fondazione Altagamma, an Italian luxury association, jointly released the "Bain Luxury Research", pointing out that due to the impact of the new crown epidemic in 2020, global luxury sales will drop by 23% compared with 2019 to 217 billion euros.

The financial report data of LVMH, the world's largest luxury goods group, pointed out that its core data for fiscal year 2020 all declined: sales fell by 17% year-on-year; operating profit fell by 28% year-on-year; net profit fell by 34% year-on-year; free cash flow fell by 1% year-on-year ; Net debt fell 32% year-on-year.

In the case of business impact, seeking transformation or business diversification has become a huge challenge for every luxury brand and even clothing brand. In addition, digitization also helps to promote its brand.

The previous Internet was mainly in the form of flat presentation. The Metaverse, on the other hand, can be presented in three dimensions. This allows people to style and dress, which presents a huge opportunity for luxury brands.

Brands can sell virtual items in the virtual world, further expanding sources of income beyond physical stores. The development of Metaverse will bring a new e-commerce ecology and further improve the efficiency and benefits of the entire retail industry. Selling one more virtual product is a zero-cost matter for the brand, which helps to increase the profit margin of the retail industry. High profit margins will attract more brands to enter the virtual world, forming a positive cycle.

People's pursuit of brands in the real world will also be extended to the virtual world. If the brand sells virtual items in the virtual world in limited quantities, it is like the recent popular rare NFT avatars (such as CryptoPunks, ape heads BAYC, etc.) or virtual land. The motivation behind people's pursuit of rare assets or items in the virtual world is the same as in the real world, that is, to seek specialness.

Morgan Stanley pointed out in a research report that the digital market of "Fortnite" and Roblox platform has allowed us to see signs of emerging shopping in the metaverse. Revenue share deals are on the rise and could add $10 billion to $20 billion in value to a brand's total addressable market. NFTs and social gaming are expected to expand the luxury group’s addressable market by more than 10% in eight years and drive EBIT growth in the sector by around 25%.