Generation Z Gen Z Brand Strategy

How China is embracing web3: marketing to gen Z on the Chinese metaverse

By Michaela Zhu, Marketing executive

Emerging Communications


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September 28, 2022 | 7 min read

With the dawn of web3 and more brands making metaverse plays, China is proving to be fertile ground for NFTs and virtual experiences.

Exhibition in China

While brands all over the globe are wanting a piece of the metaverse, China is lightyears ahead / Joshua Fernandez via Unsplash

Are you ready for the world of web3? If not, it’s time to prepare for the latest tech development set to transform marketing in China.

While western web3 concepts revolve around decentralized models (with unrestricted access underpinned by crypto), Chinese investment has largely focused on consortium chains. This involves verified organizations ensuring accountability, management, and community goals.

So, why should international brands incorporate web3 in their Chinese marketing strategy? Let’s find out.

What is web3?

From tokenization to non-fungible tokens (NFTs), virtual influencers, the metaverse and decentralized autonomous organizations (DAOs) – there’s a lot to get to grips with in web3. It’s worth the effort though. Web3 market value reached $3.2bn in 2021, with investment skyrocketing by 700% year-on-year.

At a basic level, web3 is a vision of a new, better internet based on blockchain technology. A blockchain is a decentralized ledger of transactions made on a peer-to-peer network.

With this new concept of web3, the internet (and crucially, data) is no longer monopolized by a few large tech companies. Instead, web3 aims to return value to the individual.

It will replace centralized corporate platforms with open protocols and community-run networks – combining the open infrastructure of the early web with the community participation we currently have.

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How will web3 change marketing in China?

In web3, data is controlled by individual users rather than tech giants. They decide when and how to share this data. For marketers, it opens a host of new stakeholder opportunities. This includes users as well as developers and the communities they’re active in.

Marketers must invest more time and resources into understanding consumers, and build their Chinese strategy around this. The rewards? More interactive opportunities, hyper-targeted advertising, and digital innovation.

Web3 will transform three fundamental aspects of marketing: products, participants, and place.

1. Products

NFTs are the watchword of web3. Chinese generation Z is rapidly investing in NFTs; in response, Sotheby’s recently launched the Sotheby’s Metaverse, allowing the auction house to sell NFTs in the same way as fine art, wines, and fashion. Within a month, they achieved a turnover of over $100 million, appearing on the Forbes Blockchain 50 list.

2. Participants

As well as products, the people interacting with brands will change too. In today’s marketing world, people are users, brands, celebrities, and influencers.

With web3, it’s all about digital avatars. Virtual influencers are already hitting the mainstream. In late 2021, the massively popular Chinese TV show Happy Camp revamped their hosting team after a series of scandals. Met with great success, their new host was Xiao Yang, a virtual woman 'born' in 2001.

3. Place

Where will this take place? The metaverse. Including virtual and augmented reality, it’s an all-encompassing way of interacting in the digital sphere. Many brands are already diving in.

For example, Automotive companies such as Lynk & Co have launched car showrooms in the Baidu Xirong Metaverse. To capture Chinese gen Z audiences, fashion houses such as Dior have also created meta-fashion shows and virtual outfit NFTs.

A brave new world: how brands can survive and thrive in web3

To survive and thrive in the new world of web3, luxury brands are already adapting their China marketing strategies. Over the past year, Gucci, Burberry, and Prada have all launched NFT collections.

Indeed, digital clothing and NFTs are supplying real breakthroughs for attracting Chinese gen Z. It’s a way to show creativity and engage consumers both online and offline. Lately, brands are even using these collections as fun ways to overcome physical limitations of design, construction and delivery.

Chinese consumers can now interact directly with brands and even design their own clothing through virtual platforms and games (already built by the likes of Louis Vuitton and Nike).

It’s not just luxury fashion brands. Virtual humans are appearing across social media, on the likes of Little Red Book, Douyin and Weibo. Lui Yexi (a monster-hunting, virtual make-up artist) launched on Douyin on 31 October. With just one short video, she accumulated over 1.3m followers in a single day.

It’s playful characters like this that appeal to Chinese gen Z trends for 'gamification' and artistic individuality. With astounding follow-rates to boot, it shows the world of web3 isn’t something brands can afford to ignore.

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Generation Z Gen Z Brand Strategy

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