The term “metaverse” has gained popularity in China recently, opening up a wide range of novel and interesting commercial options. Chinese tech giants have started to test the waters by creating applications similar to the metaverse, trademarking phrases linked to the metaverse, and investing in the VR/AR market. This article examines the growth of the metaverse in China, highlighting the market’s advantages and present trends, while focusing particularly on the most forward-thinking tech firms in the industry.
The Meta wave has reached China and is already regulated by the government. Crypto mining & trading were prohibited in China in 2021 to prevent environmental damage, fraud & money laundering. Unlike in the West, where there are decentralized metaverse platforms built and established by communities (e.g. Decentraland and The Sandbox, etc.), in China, metaverse platforms are centralized & governed by the tech giants such as Alibaba, Tencent, and Baidu, ByteDance.
Baidu
XiRang is still a work in progress but serves as a proof-of-concept for how Baidu is approaching the metaverse.
Baidu launched the first domestically produced metaverse called XiRang, or Land of Hope, on December 27, 2020. It is accessible as an application on various devices and allows Baidu users to create an avatar and interact with other users in a virtual world. The metaverse currently supports up to 100,000 users interacting in real time.
According to Baidu, XiRang is still a work in progress but already features several cultural highlights. It has a unique design that combines historical Chinese and futuristic elements. The metaverse includes a sci-fi-themed Three Body Museum, an ancient Shaolin Temple and the Creator City region, which has already played host to Baidu’s Create 2021 symposium. Users can experience immersive audio and 3D sound as they traverse the metaverse but cannot zoom in or out on exhibited paintings.
Additionally, XiRang does not support digital assets or transactions in line with the Chinese government’s ban on cryptocurrencies. Regulation may further evolve since the government is now pushing its own digital Yuan currency, and making it more widely available. Hence, NFTs will act more as collectibles or certificates of ownership for digital assets than financial products in China.
XiRang combines a futuristic skyline with traditional Chinese elements such as an ancient Shaolin Temple (above).
What is XiRang trying to do?
XiRang aims to provide the infrastructure for the metaverse, similar to how website-building platforms provide the infrastructure for setting up websites. It aims to make it easy for users to build and create virtual spaces within the metaverse by providing ready-to-use services, content, and templates. This eliminates the need for users to have technical knowledge about purchasing servers, setting up software stacks, etc. Thus, reducing the time and effort required to set up a virtual space and allowing for more rapid development and expansion of the metaverse.
ByteDance
Hardware
ByteDance, the owner of the short video app TikTok and its Chinese version Douyin, has acquired Chinese virtual reality (VR) start-up PoliQ. PoliQ operates the once-popular virtual social platform Vyou, which allows users to create their avatars. The acquisition is believed to be in the tens of millions of yuan, according to business and trademark registration tracking firm Tianyancha. The start-up was absorbed into VR headset company Pico, which ByteDance acquired in August last year. The founder of PoliQ, Ma Jiesi, is now the head of the social centre department at Pico. This move by ByteDance is a part of its foray into the metaverse as interest in the sector continues to grow.
Software
ByteDance’s recently launched metaverse-like app Paiduidao, which means “party island”.
ByteDance, the owner of short-video sharing app TikTok and its Chinese version Douyin, has launched a social app in China named Paiduidao, which means “party island”, that allows users to interact in a virtual community through avatars. The app will enable users to interact and engage in activities in a virtual world, similar to a metaverse’s functionality.
According to reports, ByteDance has halted its “Party Island” project, a virtual social app launched in July 2021. The app was designed as an online virtual community that allows users to create customised avatars, hang out with friends, chat, interact, and participate in virtual activities. However, the app was taken down from app stores shortly after its launch, pending approval from regulators. ByteDance has confirmed the decision to halt the project. The app was launched in the wake of “XiRang,” a virtual social platform by Baidu, which was described as the first Chinese-made metaverse product. However, ByteDance denied any connections between Party Island and the concept of a metaverse.
Gaming
ByteDance debuted in the gaming industry in 2019 with casual games and has aggressively increased its investment since 2021 as it competes with Tencent to build the Metaverse. Reworld, essentially the Chinese version of Roblox, received a US$58.3 million investment from ByteDance in April 2021. Reworld has its platform for creating and playing games.
Xiaohongshu
The metaverse economy is growing, and digital fashion is becoming essential, with AR apparel try-on and wearable NFTs at the forefront of this trend. Xiaohongshu launches an NFT platform named R-Space in November 2021, where creators and consumers can meet and trade digital collectibles. The platform uses AR capability and 3D technology to create an experimental playground for users to express themselves with a new level of creativity and experience. According to its official statement, R-S pace’s digital collectibles are uniquely identified based on a blockchain technology called Zhixin Chain. They are original digital works and commodities that can be displayed and used within the Xiaohongshu platform, and they are digital, unique, scarce, and public.
In R-Space, everyone can be a tastemaker, curator and creator. Since its launch in November 2021, R-Space has become a creative launchpad for many digital artists, fashion designers, virtual influencers and metaverse-native brands. According to reports, as of July 2022, over 800 digital collectibles are being traded on R-Space and a community of over 100 digital artists and designers. This platform allows anyone to showcase their digital creations and provides for a wide variety of digital art to be created and shared, making it a platform for a diverse community of creators and enthusiasts.
Tencent
According to reports, China’s Tencent Holdings announced to its staff Monday the official formation of an “extended reality” (XR) unit. The unit will be responsible for building up Tencent’s extended reality business, which includes software and hardware. The team will be led by Tencent Games Global’s Chief Technology Officer, Li Shen, and it will be part of the company’s Interactive Entertainment business group. This move by Tencent indicates the company is placing its bets on the metaverse concept of virtual worlds.
Alibaba
Tmall Luxury Pavilion’s virtual influencer Timo. Photo credit: Alibaba Group
Business units across Alibaba’s ecosystem use extended reality (XR), virtual influencers, and artificial reality (AR) to transform online shopping. During the 11.11 event, also known as Single’s Day in China, over 70 brands will bring close to 700 products to the XR-powered marketplace, which appears as a busy shopping street for users’ avatars to walk along. Consumers can browse in virtual stores from over 30 internationally recognised media franchises, including Sanrio’s iconic Hello Kitty and Hollywood’s franchise Minions. When they find something they like, shoppers’ avatars can grab and place items in their virtual carts, allowing for a more immersive and interactive shopping experience.
3D luxury shopping on Tmall.
As part of its push to embrace immersive retail, Alibaba’s luxury shopping platform Tmall Luxury Pavilion has created a virtual influencer named Timo. Timo is a white-haired character that will curate and host exhibitions on the platform, including showcases of 3D digital collectibles from luxury brands. Tmall is also undergoing a drastic digital makeover, with the standalone app launching a version that combines entertainment and 3D immersive shopping. The app allows users to walk through African grassland and lush South American jungle landscapes, hear birds chirping in the background, and admire the sunset while browsing the items rendered in 3D.
The platform allows for a 360-degree view of products and the use of AR technology to try them on. Consumers can also superimpose furniture onto images of their homes to see if the decor matches. Tmall’s head of mobile app, Zhao Kun, stated that the future of e-commerce retail is gaming, shopping, and browsing all rolled into one. Tmall aims to explore new experiences and build capabilities to drive user and business growth for merchants in the next three to five years.
Taobao Life video introduction
The game, Taobao Life 淘宝人生, is a significant element of the Taobao mobile app. Users can personalise their 3D characters and accomplish daily tasks to earn points. These points can then be used to purchase virtual apparel and accessories that are replicas of actual branded goods. However, there is a social aspect to the game that enables players to take photos of other’s avatars and upload them to a feed (where they can be liked and commented on).
