With Du Xiaoxiao as their guide, the visitors can complete mini tasks and ‘unlock more computing power’ to enable more features, watch an AI-generated music video featuring Du Xiaoxiao, interact with branded content such as a quiz and socialise with each other. The mini space showcases possibilities for a ‘small and beautiful’ branded space with interactive and community features. 

At the beginning of this year, Baidu made the ambitious claim that the MetaStack function of its metaverse platform XiRang enables companies to independently build metaverse spaces in just 40 days. The new ‘Baidu Xiao Universe’ mini space, built with Lingjing Zhiwei, also aims to optimise virtual worlds to be feature-rich but also require less computing power. These efforts are helping to make the virtual world more accessible as a marketing tool. 

Baidu had also just made its ChatGPT-like AI chatbot ERNIE Bot available to the public this August. Du Xiaoxiao, one of Baidu’s first ‘virtual being’ IPs, is the face of its next step of AIGC. 

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The new “charge now, use later” function allows foreign users of the digital RMB payment app to top up their digital wallets using international cards, including Visa and Mastercard. Any remaining balance in the e-CNY wallet can be returned to the foreign bank account that was used to load the wallet. Users can now also register for the app using foreign phone numbers, significantly lowering the barrier of entry to using the app.

As a result of the updates, those visiting the country on a short-term basis can now seamlessly use the digital currency both at brick-and-mortar merchants accepting e-CNY under the trial program, or on online platforms like ride-hailing app Didi, takeaway delivery app Meituan, or e-commerce site JD.com.

Prior to these updates, users could only sign up to use digital RMB if they had an account with one of seven approved Chinese banks, effectively limiting use of the currency to foreigners already residing in China long-term. Foreigners previously also could not top up their e-CNY wallets in advance but had to do so on the spot, adding extra hassle to the process.

Some functions of the digital wallet are still off-limits to foreigners, e.g., spending limits above 50,000 RMB (6838 USD) per year require a Chinese identity card.

Zhou Maohua, an analyst at China Everbright Bank, said the upgrade will not only benefit foreigners but also increase the presence of e-CNY in international transactions, ultimately helping to promote the digital RMB worldwide.

The app was launched in early 2022 as the primary means through which citizens can use the digital Renminbi, which is issued by the People’s Bank of China and has the same valuation as the normal RMB. Initially, the pilot program only covered 12 cities in China, but was quickly expanded to encompass 23 cities including the six cities in Zhejiang province that are currently hosting the 2022 Asian Games.

The timeline for a full nationwide rollout of the currency is unknown, but the government has been working hard to improve regional uptake, including offering incentives to residents in cities covered by the trial program, requesting that major private companies like Tencent and Ant Group promote the currency on their digital payment services, and paying public sector workers in Changshu exclusively in the currency.

According to the People’s Bank of China, around 264 million transactions have been made using digital RMB, totalling 83 billion RMB (11.4 million USD) as of May this year. 

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Whilst its construction has yet to take shape, the social needs in the digital space have been gathering steam, in particular, amongst China’s digitally savvy Gen Z and younger.

The growing traction is reflected in the rise of Soul App, a Tencent-backed social networking app. Touted to be a “Social Metaverse for the Young”, the pioneer is gearing up for a public listing in Hong Kong after pulling off approximate 219 million USD (1.6 billion RMB) in revenue in 2022, up from approximate 165 million USD (1.2 billion RMB) the year before and about three times of that recorded approximate 68.30 million USD (498 million RMB) in 2020. In this vein, Dao Insights was joined by two insiders at Soul to uncover the unique charm of the social metaverse.

Sam (Bin Che), Vice President and Head of Product Centre

Sam is responsible for the strategic development planning of Soul’s products, as well as the formulation and management of product operation strategies. Sam joined Soul’s product team in 2020 and has been responsible for the entire business chain, including product function design, value-added commercialisation, innovative thinking in social relationships, and efficient operation transformation. Prior to joining Soul, Sam worked at Tencent from 2013 to 2020.

Amanda (Li Fan), Head of Marketing Centre

Amanda is now the head of marketing centre, leading Soul’s brand management, public relations and visual creation teams. Before joining Soul, Amanda worked for Xiaohongshu App, Master Kong, PepsiCo (China) and other well-known Internet and FMCG enterprises.

Could you please introduce Soul’s user persona?

Amanda:

2023 is the 7^th year since the birth of Soul. With the vision “May there be no lonely people in the world”, Soul strives to be a social network for young generations through gamified product designs. As a result of such a positioning, Soul saw 30 million MAU (monthly active users) as of 2022. Of which, nearly 80% fell under the Gen Z cohort, which means they are Soul’s core users.

Gen Z is regarded as “a lonely generation” as most of them are an only-child, myself included being born post-85. While facing pressure from study and work, they also lack company. So compared to their elder generations, they need more emotional companionship and value empowerment. They need someone there to listen to them, someone who can give their attention.

When converting such an emotional need into social networking applications, the feature of swiping left on a profile or swiping right to couple up, and simply finding a partner is not enough to fulfil Gen Z’s emotional demands. There are some psychological needs that must be addressed. That’s the gap that Soul aims to fill, by creating a space to help those demographics to connect with like-minded people while having some interesting digital experiences.

This has been done through practices such as adopting digital avatars, the “soul matching” process, audio partyrooms and interest groups as well as socialising-oriented online games. All functions are based on the inner demands of the young generations, which I think is partly what young people appreciate Soul for.

Soul aims to be a “Social Metaverse for young people”. Could you explain what it is like inside Soul’s “social metaverse”, and why does it appeal to young Chinese?

Sam:

Back in 2015, we realised the limitations of traditional social media such as Qzone (Tencent’s social networking website) where you share a post but there may be no response; and Weibo (China’s equivalent to Twitter) which is more of a space for celebrities and influencers with large followings and traffic for UGC (user generated content) is narrow. So, there is a blank space around the wider ordinary group of people, where individuals can express themselves and find a sense of belongingness, which gave inspiration to the creation of Soul.

Soul wanted to enable an authentic and inclusive virtual space where young people are encouraged to express their own emotions based on common interests while building up spiritual links.

When users register on Soul, they will be invited to do a “Soul test”, where we can group people into different “planets” through 5 quick questions. Different planets represent different personas of users. This is on top of features which allow users to add some tags for themselves. Based on this information and with the assistance of an AI-powered relationship recommendation engine called “灵犀” (líng xī, or intuitive connections), users can further build their relationships at a later stage.

Once users enter the virtual world, they can customise their appearance and participate in different activities such as content square, interest groups and audio party rooms, and look for like-minded people. During this process, they are also producing content including rooms they created and posts they shared, which can all be spread through the decentralised mechanism. As such, they will be able to interact with kindred spirits in those scenarios. At least 87% of shared posts in Soul were replied to at least once as of 2022, enabling emotional expressions of everyday ordinary users to be seen and to resonate with others.

Overall, I think what appeals to the young generations is the innovative product design and novel technologies coupled with the concept of an interest-based socialising mechanism, which creates a strong sense of belongingness for users.

How do you think Soul’s virtual world is different to alternatives such as Tencent’s Super QQ Show, or the once hyped metaverse-like app Zheli?

Sam:

We saw tech giants stepped up the development of metaverse last year, with a focus on virtual human beings. However, we think metaverse and virtual humans, in essence, are two separate things and the employment of virtual beings does not mean the creation of metaverse. Metaverse is a more complex concept including more elements with “decentralisation” and “customisation” at the core, and virtual beings are just a small fraction of the digital world.

While Super QQ Show has been a source of inspiration to Soul, QQ’s digital creation is largely based on relationships amongst people who already know each other. Whereas Soul extends the digital practice of socialising to include strangers. Although both QQ and Soul tap into the metaverse, the way we engage users is totally different.

Zheli, on the other hand, managed to disrupt the market through innovative gamified activities, which coincides with the design of Soul. But Soul sets itself apart by pivoting towards a new way of catering to the need for establishing interpersonal connection and socialising by sticking to our core values, which are decentralisation, virtual identity, emotional touch and user-driven content creation.

Do you observe that there is continued appetite for a “social metaverse” amongst China’s young people? Why is that?

Sam:

The term metaverse originated very early on, however, it was only realised in recent years because of a breakthrough in technologies. I believe such an idea will see deeper growth in the future. Even though in recent months, we’ve seen the sensation around metaverse start to slow down, I believe such a concept will continue to exist. In fact, this is just the beginning of metaverse.

With the rise of AIGC, which pushes the development of hardware and algorithm, it will also facilitate the advancement and progress of the metaverse and relevant products, as well as a wider recognition of the concept amongst human beings.

Inside Soul’s digital world, users interact with each other through virtual avatars while common interests are at the core of establishing relationships. Could you explain why Soul adopts the mechanism of virtual identity and how does it ensure mutual trust in socialising in the virtual world?

Sam:

As mentioned earlier, one of Soul’s most important values is to enable a “decentralised” interaction amongst users. We want to focus on the “essence”, or internal traits, of individuals, and allow relationships to be built upon interests, in other words, “soul friends”. Whereas gender and appearance are less relevant. In Soul’s world, virtual identity is merely a medium of expression and a symbol of endorsement of interest-based socialising.

Meanwhile, we found that today’s younger generations don’t think real-life images are the best way to express themselves. This is reflected in their choice of profile photos for their accounts on apps like WeChat (Tencent’s messaging app), using animals or artwork of various genres to demonstrate their personalities. That’s why we think real-life images may not be essential in their socialising journey. Instead, how to enable them to showcase their interests or even allow them to break away from their physical realities, therefore, participating in socialising activities without any pressure, is the direction we want to explore.

Amanda:

While the mechanism of interest-based socialising itself provides the basis of trust amongst users, the platform also introduced a series of measures to ensure the trust. Soul has been continuously enhancing the platform’s encryption and privacy protection policies. There are also other policies in place in response to concerns over “inappropriate” language or online behaviours. For example, earlier this year, we initiated the “Social Etiquette Points” system, which encourages users to report any inappropriate activities. Reported individuals will be subject to a points deduction, which will further limit their ability in future socialising activities.

As an extension of the continued efforts in improving mutual trust, we also recently introduced another tool known as “Rotten Tomatoes”. Users can throw a “rotten tomato” at someone who has broken the social etiquette rules. The person who was hit will have their points deducted. So, this is a playful and funny way of ‘retaliation’, which is also well received by young people.

Through these measures, we also want to deliver the message that although we are socialising in the digital world, social etiquette and moral rules remain crucial.

What are the key social behaviours of young users observed in Soul’s digital world?

Amanda:

Authentic persona

In late June, Soul published Soul App’s 2023 Social Media Keywords, where we identified 10 keywords. And I’ll share some of them here. The first one is the authentic persona. It’s quite common that young people like building a “persona” for themselves when they post on social media, using tools like filters, or beauty enhancers. But what’s interesting is at the same time, there is a growing tendency of anti-filters amongst these young people, which shows a shift towards a more genuine expression. They focus their attention on their mental status apart from their physical appearance, which is also why we think young people choose to come to Soul to socialise. They want to share content that doesn’t need to be intentionally fine-tuned and so they receive real responses.

Selfcare

Young Chinese now pay more attention to their own mental and psychological demands and refuse mental burnout. Such a trend has been evidenced in over 200 million views of the topic “Love Yourself” on our platform. This means they are looking for voices that respect and echo their own values. And when they can find those voices, they are also more likely to establish a relationship with those people.

Going mad

Young people are seeking places to vent and release pressure or other negative feelings. In response to such a demand, we launched a new feature, which is basically a karaoke room where singing skills are irrelevant, and all songs are welcomed. Being out-of-tune has become a remedy for stress and even draws in a huge number of shares. This just shows how much young people are in need of an emotional outlet.

Find Dazi (搭子dā zi; buddy)

Dazi originates from the Shanghai dialect, which used to refer to partners playing mahjong. The term itself reflects the demand for interest-based relationships. For example, Fan Dazi (meal buddy), suggests a shared love of food. So, to find a “Dazi”, in essence, is a process where they seek to maximise their happiness through connecting with like-minded people.

As Soul is at the pre-Hong Kong IPO stage, what kind of novel experiences does Soul plan to bring to users in the coming 3 to 5 years?

Sam:

Last in response to the growing appetite for virtual human beings, we have introduced new 3D avatars accompanied by a series of virtual tools and scenarios. From this year, we have been doubling down investment in AIGC research and development. This will facilitate not only establishing relationships amongst users and maintaining such relationships, but also assist the growth of content creation and community building. For example, what we have been working on is AI-powered singing, where users can share synthetic singing voices that can imitate their own voices in just 30 seconds’.

In future, Soul’s innovative efforts will also be centred around AI technologies, enabling more  scenarios that allow users to express themselves and socialise with others in an easier and freer way. Soul distinguishes itself with a combination of socialising and community functions, the two aspects will also be placed at the forefront of all our future developments.

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The plans involve building “three to five industrial clusters” and “three to five metaverse companies with global influence” specialising in these emerging technologies by 2025. The Ministry of Industry and Information Technology led on putting together the blueprint, alongside the education and tourism ministries, the National Radio and Television Administration and the regulator of state-owned enterprises.

According to the document, a key objective of the national metaverse is to upgrade the country’s manufacturing industry to be “more advanced, intelligent and greener”. This ties in closely with “Made in China 2025”, an ambitious ten-year-plan unveiled in 2015 that seeks to make China a global powerhouse in high-tech manufacturing – and reduce its reliance on US technologies.

The metaverse is a three-dimensional hyper-realistic virtual world where people can interact via digital avatars. It is also a space where other emerging technologies can be combined: blockchain can contribute a high degree of data security within the metaverse, and artificial intelligence can generate diverse content for use inside the metaverse.  

The metaverse can be harnessed for manufacturing in a huge number of ways e.g., by training employees more quickly, generating to accurately identify product flaws, and setting up virtual design rooms to turbocharge remote design collaboration.

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The accounts were accused of violating eight regulations in illegal fundraising, internet safety, and financial risk management, according to a statement made by Sina Finance on Tuesday.

The move comes after the Cyberspace Administration of China (CAC)’s major nationwide crackdown in August 2022, which saw the regulator shut down 12,000 crypto-related accounts and remove 51,000 related social media posts across Weibo and Baidu.

At the time, the CAC wrote that the measures were taken to “remind the majority of netizens to establish correct investment concepts, enhance risk prevention awareness, refrain from participating in virtual currency trading hype activities, and beware of personal property damage.”

China’s cautious approach to cryptocurrencies has been established over the past decade through a series of gradual measures, beginning with banning banks from handling bitcoin transactions in 2013.

Then in September 2021, the government made its stance against cryptocurrencies even stronger when 10 government agencies declared all crypto transactions and services illegal, and set out to eliminate mining – the highly energy-intensive process by which new coins are generated and transactions are validated.

Beijing continues to keep a tight grip on cryptocurrency trading while promoting the use of its own digital RMB issued by the People’s Bank of China. As a centralized digital currency (crypto is decentralised), the digital RMB has the traceability of other blockchain currencies whilst providing direct government oversight of how and where the money is used.

Meanwhile, China’s now thriving underground crypto scene has adapted to successive crackdowns, dodging regulatory scrutiny by using virtual private networks and avoiding consuming too much energy in a single spot. According to estimates from the Cambridge Centre for Alternative Finance, China is a major Bitcoin hub accounting for a fifth of all processing power used to mine the cryptocurrency.

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To demystify Web3 and find out more about how China’s approach towards the technological vision is shifting, we spoke to Toby Rush, a twenty-year tech industry veteran with extensive experience as both a founder and an investor.

Previously, Toby Rush served as senior director for the International Technology Investments Team at Ant Group, the payments subsidiary of Chinese tech giant Alibaba Group. Prior to that, he was CEO of ZOLOZ, an Alibaba digital identity platform. ZOLOZ evolved from EyeVerify, which Rush founded in 2012, and which became a wholly owned subsidiary of Ant Group in 2016 after creating a novel eye-based biometrics used by Wells Fargo, RSA and Citi. EyeVerify was acquired by an affiliate of Chinese tech conglomerate Alibaba for $100 million in 2016.

He also co-founded and led Rush Tracking Systems, a computer vision and RFID solutions venture, to a successful exit to a Private Equity firm. Toby has a BS in Engineering from Kansas State University and lives in Kansas City, Kansas.

What’s your definition of Web3?

In Internet 2.0, data always lived inside someone’s company. Internet 3 (or Web3) is: we’re going to let the data live with the consumer, outside the walled gardens of those tech companies. We’re going to allow everyone else to innovate without the restrictions of those bubbles of data.

The fundamental technology is all blockchain. In the blockchain, we can operate without having to say the words “Just trust me”. It’s an amazing set of tools that allows for trust to be codified. One thing you’ll hear a lot in the blockchain world is “Law is code and code is law”. It’s open source, everyone can see it, so there’s a level of trust in how these systems operate.

One implementation of the blockchain is cryptocurrencies, but that is not the only use of blockchain. There’s a whole other world of implementations that we can now collaborate around – that’s what we call Web3.

Traditionally, if someone has a piece of data it’s in Alibaba, Tencent, Weibo – it’s in one of these platforms. You have to go into the walled gardens of these platforms in order to operate, understand, and trust that data. The companies set all the rules and, by the nature of companies, they’re always going to set rules that benefit themselves.

But with blockchain, I can say “I own this data, it is mine”. The types of data that could live this in this open ecosystem could be a ticket to an event, an educational certificate, credentials, a title to a piece of real estate, a warranty to a product I purchased, or an insurance policy – you name it.

The recent Web3 white paper from Zhongguancun Science Industrial Park has been heralded by some as an about-face in China’s approach to Web3. Do you agree?

So I would disagree that it’s a big turn. I think it’s a great clarification. When I was working at Ant Group on their investments team back in 2017, my core focus was blockchain. In 2017, everybody was already agreeing that blockchain technology and the use cases it enables are going to be incredibly important. Alibaba was not alone in that, every company in China was thinking that way.

The challenge was cryptocurrencies got loose in China. The government basically said, we’re not cool with cryptocurrencies and we’re not cool with speculative NFT buying and selling. It got way out of control, and they said “Stop, that’s not what we want the technology to do”. So they did put a big pullback on certain use cases that run on blockchain, particularly cryptocurrencies and NFTs as a speculative purchase, just because a lot of people didn’t understand it and there was a lot of fraud happening.

I think what this white paper has done is kind of re-emphasize the message “We still believe in blockchain, we still believe that Web3 is the future”. But it did not say “We’re going to open the world to cryptocurrencies, come on in!” The paper communicates that this is a powerful technology but the core is Web3, it’s not cryptocurrencies. I think they’re trying to redirect people to use cases of blockchain that are more beneficial to society and the citizens.

What are the key differences you see in China’s approach to Web3 compared to other countries?

With Internet 2.0, if you want to enforce rules on how data is used, how applications are used, what services are enabled etc., there’s always a company behind the information you want to regulate, which the regulators can put a hand on and say “This is how this needs to work. We’re going to put regulations on information and here’s what you have to do to comply.”

If it’s in blockchain, there isn’t always a company. Data lives out in the open. So, how do you control that? What China is doing is rolling out what’s called a “permissioned blockchain”, which is not completely open. It has many of the same technical benefits, but the Chinese regulators maintain pretty tight control over what can and can’t happen on the blockchain. As for the rest of the world, it’s wide open, which is both good and bad. It’s the wild wild west. You get a lot more innovation, but you do get more fraud, you get criminal activity.

What was your experience working in Chinese tech companies – first as CEO of ZOLOZ and then leading the International Technology Investments Team at Ant Group?

I had a great experience. When you’re not in China, its really hard to know the reality. But I have lived experience of working directly with executives at Ant and Alibaba. I was very impressed, they’re super creative and are always thinking about how to help small business owners and individuals. They definitely think at scale and they’re moving fast.

I also saw how challenging it was. There are a lot of strict regulations they have to operate with. At Eye Verify (founded in 2012 and acquired by an Alibaba subsidiary in 2016), we thought we were pretty good at data privacy before we got acquired by Ant Group, but after the acquisition it was far more rigorous.

What do you see as China’s key challenges in actualising the potential of Web3 going forward?

At a macro level, the crackdowns that fintech experienced over the last two years scared a lot of venture capital. From an investor’s perspective, it’s hard to figure out what is going to be the mood of Beijing on any given topic in three or four years from now. Beijing has actually been quite consistent, but the challenge is going to be: “How quickly will capital from outside of China flow back into China?”.

But long-term, I think the potential for Web3 is really good in China. They have such an innovative culture in the tech scene and I think Web3 is going to create a new groundswell of innovation there. China’s tech scene gets an unfortunate characterisation of “Oh, they just copy and steal other people’s ideas”. Some of that happens as it does everywhere, but that was not my experience at all.

How do you think current tech giants like Alibaba, Tencent, or ByteDance will have to adapt to Web3?

They will need to shift for sure, but not massively. Some old revenue streams might go away, but new ones will also come up. Because they’ve already got the userbase and the initial data, they’ve got the ability to lead and transform their business models. It will take some time for companies to work out how to bring some of these new blockchain use cases to market, it won’t happen overnight. So they will cannibalise a piece of their business, but I think the new opportunities for them are much, much bigger.

What do you think are the most exciting uses of Web3 either now or in the future?

In my opinion, there haven’t been massively successful use cases of Web3 yet. The whole world got punched in the nose by FTX (Futures Exchange, a cryptocurrency exchange and hedge fund that collapsed in 2022 after a liquidity crisis) and just the greed that happens when there’s no guardrails on the system. So we’re still recovering from that. I think the use cases we’ll see first will be around consumer/fan engagement. Brands and artists can go directly to consumers and not be blocked or mediated by the big platforms.

Can you explain how your product Redeem can help make Web3 a reality?

What we’ve done is transform your phone into a key that unlocks and secures your digital world. We’re trying to move away from passwords and accounts – someone can always phish those details from you and hack into your account. The issue as we move into holding data in open ecosystems is: how do you prove ownership of that data, of NFTs?

Well, NFTs live in digital wallets, and those wallets have to be owned by a person. Every person has a phone, and every phone has a phone number and a SIM card that strongly binds that phone number to that specific device. At Redeem, we want to make it really easy for users to prove ownership of assets simply with the possession of their phone. We want to allow consumers to engage in the digital world in a seamless yet very secure way.

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The Hangzhou Data Exchange (HDE) aims to foster data circulation with unprecedented trust and privacy. The platform will achieve this through “digital certificates” underpinned by blockchain technology and smart contracts, which are programs on the blockchain that only run when certain conditions are met. These certificates will be awarded to buyers and sellers in data transactions, clarifying each side’s data property rights and transaction conditions.

“We hope that Hangzhou Data Exchange’s digital certificates can dispel the concerns of both parties in data transactions, solve the problem of mutual trust between enterprises, reduce transaction costs, and improve transaction efficiency,” said Zhou Yu, General Manager of HDE.

Over 300 businesses have already signed up to participate in the Hangzhou Data Exchange, including major players in China’s tech sector like Alibaba Cloud, Huawei, and Baidu.

The summit also saw Hangzhou Data Exchange award its first batch of digital certificates to Wasu Media, a Hangzhou-based television company, for the sale of user viewing habits data to Zhejiang Media College, which will use the data as sample materials in courses.

A recent white paper released by Beijing Municipal Science and Technology Commission calls Web3, a vision for the internet’s future underpinned by the blockchain, an “inevitable trend for future Internet industry development”. While some have heralded the document as an about-face in China’s approach to Web3 in light of the government’s blanket ban on cryptocurrencies, the white paper makes clear China’s intention to harness Web3 in a highly regulated fashion that serves the wider goals of the country.

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• Shiseido Travel Retail partnered with China Duty Free Group to launch an online-to-offline campaign, leveraging Web3 advancements to boost awareness of its NARS exclusive travel collection.
• A metaverse world has been curated through WeChat’s mini program, where two virtual human beings are at the front of the digital journey.
• To enable a seamless omnichannel retail experience, the offline pop-up in Hainan was equipped with interactive screens, allowing visitors to discover products customised to their personal needs.

Shiseido Travel Retail has teamed up with China Duty Free Group (CDF) to launch an omnichannel beauty experience in the tourism hotpot of Hainan in an attempt to drive awareness of its travel exclusive products. Entitled ‘Light the Way’, under the spotlight is the brand’s prestige cosmetic brand NARS and its new collection, which comprises the brand’s bestsellers, novelties and a CDF-Exclusive Set.

Running from 31 July to 29 August, a dedicated mini program elevated with metaverse features is set up on Tencent’s super messaging app WeChat, serving as a pathway to connect the virtual universe with offline pop-ups happening across Hainan during the promotional season, while gaining extra online traction through CDF’s digital channels.

Explore travel retail in the metaverse

The digital journey is fronted by virtual human beings AjA and MonoC. AjA is characterised as “a sporty enthusiast” with a passion for fashion and beauty who guides users through an immersive augmented reality (AR) experience. MonoC, meanwhile, is described as a “Metahuman Artist” who brings inspiration to the NARS digital collectibles.

To access the metaverse space, users are invited to create a “NARS Passport”, which acts as a virtual identity that tracks users’ activities and corresponding points as well as limited-edition digital collectibles that can be redeemed from points earned.

Users can explore the virtual universe through AR interactions, for example, virtual makeup try-on, but they can also earn points by completing tasks via digital channels such as watching the campaign video, sharing the mini program with friends, embarking on a treasure hunt for specific NARS products in the futuristic space or by visiting an offline outlet at CDF Sanya International Duty Free City.

Bridging the gap between online and offline

To further the endeavour in creating a seamless online-to-offline retail experience, the NARS pop-up introduced an ‘Aura Detector’, which is led by the virtual human being AjA. Visitors are encouraged to discover their own “aura” or quality through an interactive screen where product recommendations are available based on the aura detecting result. The aura reading transforms the colour of the pop-up, creating an exclusive ambiance for customers and photo opportunities too, while also catering to consumers’ pursuit of uniqueness and individuality.

In addition, Guo Junchen, a Chinese singer and actor who is also NARS’ brand ambassador was engaged in the omnichannel campaign, with a visit by Guo to the NARS pop-up being one of the highlights. The 25-year-old was joined by several other KOLs and presented in the brand-led livestream session with CDF on 10 August, generating another wave of excitement amongst the influencer’s fans, which is some 13 million on China’s microblog mecca Weibo.

These series of efforts have resulted in the campaign hashtag “NARS Light the Way” to garner over 13 million views on Weibo as of 14 August. The activation also serves as an example of how to leverage Web3 technologies to innovate travel retail experiences and to facilitate brands’ in strengthening their omnichannel strategies, and therefore, their engagement with the tech-savvy Chinese consumers.  

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• Douyin Lifestyle Services teamed up with PICO to bring out a virtual city land of Qingdao, celebrating local culinary and scenic assets.
• The digital creation was part of the physical summit hosted jointly by the lifestyle services unit and the VR start-up acquired by ByteDance.
• These efforts indicate Douyin has beefed up in levelling up the lifestyle services sector, which has become a new revenue engine for Douyin.

As China’s catering industry clocked a strong rebound, reaching 2.43 trillion RMB (338.70 billion USD) in the first half of the year, up 21.4% year on year, as per National Bureau of Statistics, the local lifestyle services unit under Chinese TikTok Douyin took step to further fuel the recovery of the sector by celebrating local food in one of the country’s tourism hotspots Qingdao in the digital realm.

The virtual banquet is part of a city summit hosted in collaboration between Douyin Life Services and PICO, a VR startup now owned by the viral short video app’s parent ByteDance. The offline summit kicked off on 25 July with the theme of “The New Era of City Food”, which aims to promote catteries, food influencers and relevant service providers in the coastal city as well as those from neighbouring areas in the Shandong province, of which Qingdao is the capital.

The event venue was set at the new landmark building in Qingdao – MGM Hotel, which was decorated with a high-tech ambiance, featuring curved screens and ribbon-style screens to showcase a sense of technology, preheating the virtual experience.

To give more local edge, the event invited Qingdao Auntie Zhang Daxia, a native influencer creating short comedic dramas based on daily life scenarios, who has over 21 million followers on Douyin.

Virtual exploration of local food and scenery

The 360-degree immersive VR virtual venue was staged with the assistance of PICO panoramic technology, combining virtual and real scenes, and enabling real-time cross-space interactions. Users can experience the offline venue through PICO headsets, which expanded the scope of event participants, allowing more people to understand the added value of Douyin’s Lifestyle Services for local businesses.

Apart from celebrating local cuisine through a series of VR exploration programs, the digital space also featured a total of five iconic landmarks including Huilange Pavilion, Huashi Lou, Laoshan Mountain, and Wusi Square. All five scenery sites were refashioned in posters with a futuristic twist, giving the nod to the inventive online experience.

The move indicates Douyin is stepping up in efforts in ramping up the lifestyle services arm which has turned out to be a revenue engine for Douyin. The unit is reported to have pulled off a revenue of nearly 60 billion RMB (8.36 billion USD) between January and October 2022, surpassing its yearly target of 50 billion (6.97 billion USD) RMB ahead of time.

By leveraging the technologic advances, Douyin has a better chance to expand its foothold in the new business sector and compete with Meituan, a Chinese food delivery giant that is also an early market enterer in the lifestyle services sector. Capitalising on novel digital experiences to spur consumption also aligns with the government’s overall guidance on economic recovery, where industry digitalisation is at the core for driving up growth.

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• Chinese yogurt brand Chunzhen under the dairy giant Mengniu Dairy teamed up with QQ Xiaowo to curate a metaverse island that revives Gen Z’s childhood memories.
• QQ Xiaowo, a social networking space embedded in Tencent’s messaging app QQ has drawn in brand partners for metaverse creations, including Calvin Klein, Gucci and L’Oréal.
• The digital realm leverages the concept of gamification and co-creation while an offline pop-up brought online buzz to the New Tier-1 city of Tianjin.

In a sharp contrast, Chunzhen, a yoghurt brand under China’s dairy giant Mengniu Dairy, leveraged metaverse – a term synonymous with the future – to revive the childhood memories of China’s Gen Z. This was achieved by collaborating with QQ Xiaowo, a social networking space embedded in Tencent’s messaging app QQ.

The upgraded online environment enables a Web3-like ecosystem, allowing users to customise their virtual characters alongside a range of digital activities such as opening virtual stores, decorating their own virtual homes, partying and socialising over sought-after Gen Z games like Jubensha. Introduced in early 2022, the space has become another pathway for brands to enter the futuristic internet iteration of metaverse. Current brand partners include KFC, L’Oréal, Calvin Klein, Jordan China, Kappa and Vans, as well as luxury label Gucci who dropped its brand’s 2023 Spring/Summer series runway show in QQ Xiaowo for the first time.

A metaverse world reviving Gen Z childhood memories

Now, Chunzhen has rushed to the space, giving birth to “Satisfy Your Food Cravings Community by Chunzhen”, which is a tailored made metaverse interactive island with a “childhood retro style”. Characterised by the brand’s signature blue and white hues, the immersive environment is decorated with neon lights and vintage signs exuding a strong sense of retro-Chinese cool. While some old-fashioned objects such as vintage televisions, kettles and stereos enhanced the nostalgic ambiance.

A total of five digital scenarios including the Galaxy Gaming Room, Red Star Elementary School, Culture Great Hall, Craving for Yoghurt Canteen and Chunzhen Photograph Studio were installed in the metaverse, reviving some of Gen Z’s childhood routines while leaning on the practice of gamification. Included was playing classic arcade games, especially the dance machine, which was one of the most popular after-school activities remembered by the post-80s and post-90s.

Also arousing reminiscence was the virtual school ground where blackboards were covered with intriguing childhood questions awaiting users’ answers. Visitors could relive the joy of being in a classroom and play on the playground just like they did during their school years, creating a more engaging digital experience.

In the Culture Great Hall space, visitors had the opportunity to interact with the brand’s own virtual character NPC (Non-Playable Character) Xiaozhen through activities such as taking photos. They can also unlock surprise gifts by engaging in the product introduction presented by Xiaozhen, enhancing the sense of involvement while allowing the informative session to be more playful, and therefore, entertaining.

Meanwhile, upon completing gaming missions, players were rewarded with snacks including crispy milk, dragon fruit, walnut kernels, and popping candy, which were provided by the Craving for Yoghurt Canteen. Users were invited to make their own version of a virtual yoghurt, incentivising players with a mix of Gen Z’s childhood nibbles and its classic offering. By doing so, Chunzhen was able to resonate with its target generations emotionally by enabling them to capture moments from their past while deepening its penetration of the shrewd demographics.

Co-creation enhances the sense of consumer involvement

To further unleash the synergy of user co-creation and metaverse, the brand launched the #Post-00s New Dimension Yoghurt Store# campaign on QQ Small World (an Instagram like image-driven socialising space in QQ), allowing users to become store managers, furthering the sense of participation. As such, Chenzhen ignited another surge of enthusiasm among young people with the campaign hashtag garnering over 270 million views on China’s Twitter-like platform Weibo.

Adding to the online excitement, Chunzhen brought the “Satisfy Your Cravings Community by Chunzhen” to the real world during the recent May Day holiday, through a creative pop-up event in the New Tier-1 city Tianjin. Leveraging the holiday footfall, not only did Chunzhen invite visitors to taste its milky offerings on-site, but also the idea of co-creation was extended to the physical space, where customers could engage in the yoghurt-making process.

The fusion of nostalgic elements and technology in the stylised scenes attracted many users to take photos and check-in, creating offline buzz that simultaneously boosted the campaign’s online awareness. Through the integration of online and offline operations, the brand effectively enhanced its visibility and strengthened its relationship with target consumers, ultimately, improving sales conversion. It is understood that during the promotional period, nearby stores saw an increase in daily sales of 910%, while online platforms, particularly the e-commerce market JD.com Tewu Z (an innovative content shopping space curated by JD.com for Gen Z), achieved a monthly sales growth rate of 58% with page visits increasing by 468%.

The success of Chunzhen’s metaverse campaign shows it is essential to identify collaboration platforms that provide technological advantages and build a metaverse space with unique brand characteristics. This allows brands to create diverse and immersive interactive experiences while building a solid foundation for virtual communication and engaging users effectively.

Additionally, it is crucial to inject “core values” into the brand’s metaverse space. While metaverse technology can provide novel and exciting user experiences, brands must ultimately touch upon their target audience’s emotions, thoughts, and interests to truly resonate with users and establish distinctive brand recognition.

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