THE BIG STORY

Can India recreate China’s live commerce magic?

Image credit: Timmy Loen

India’s short-video players and general ecommerce marketplaces are vying to capture the country’s up-and-coming live commerce sector.

THE HOT TAKE

Building a metaverse for retail and ecommerce

Inside Samsung 837X metaverse on Decentraland. The event featuring Samsung’s metaverse store is over, but visitors continue to sign in.

Here’s what happened:

• Facebook’s rebranding as Meta put the spotlight on the metaverse - a virtual universe that was already in the making.
• It made people curious about what the metaverse could actually look like.
• While gaming companies have a head start in the voyage into the metaverse, retailers have begun experimenting with what commerce might look like in the new reality.

Here’s our take:

Recently, an old video resurfaced, giving us a glimpse of what shopping virtually in Walmart could look like. While the video itself drew mixed reactions, I much prefer Mastercard’s idea of the metaverse.

Instead of letting us wander around Walmart’s aisles with a floating torso (which unnervingly knows how much milk I have in the fridge) that pops up every now and then, Mastercard’s version of the metaverse depicts two friends in a park.

One of them describes a pair of sneakers that pop into the other's peripheral vision. The second friend goes on to customize the NFT for her digital avatar while the actual product lands up at her doorstep IRL in a few days.

Here’s the twist: The park itself was in the metaverse, and the friends who met up in the park never left their homes.

Comparisons aside, here’s what is happening in real time: On the one hand, there are companies already experimenting with merging commerce and gaming. These include Epic Games, Roblox, and Scuti, a retail marketplace where gamers can use their awards to buy real-world products like sneakers or headphones.


An image from luxury brand Balenciaga's collection on Fortnite / Photo credit: Epic Games/ Fortnite

For example: Luxury brand Balenciaga’s digital garments are on Fortnite. A Gucci bag sold for US$4,115 on Roblox last year - this bag costs US$3,400 IRL.

On the other hand, there’s a new wave of companies building metaverse and VR platforms for different brands like New York-headquartered Obsess.

Startups like Obsess that are working in experiential retail could well shore up the investor interest that roll-up brands have seen recently. But there is another way to go about building the metaverse for shopping. For instance, Vietnam-based RFOX (RedFox Labs) is building virtual shopfronts in a virtual marketplace and offering them to retailers.

The difference between the two is subtle but substantial: While Obsess makes virtual stores for standalone brands and RFOX offers similar services to its clients, the latter already has a "mall" to set up stores - a virtual marketplace called RFOX Valt.

Co-founded by Ben Fairbank, who formerly worked at Grab, RFOX Valt comprises four quarters, featuring a mix of auctionable premium shops, some marquee storefronts, and places earmarked for concerts and events - much like in real-world malls and shopping centers. This past December, RFOX auctioned 25 stores for 291.4891 Ethereum (about US$ 1.2 million).

The broader plan is to replicate this virtual marketplace for consumers in the Philippines, Indonesia, and other Southeast Asian countries. But while companies adapt to a metaverse still in the making, the early birds might get the juiciest of worms. Obsess, for instance, has clients like Ralph Lauren and Tommy Hilfiger.

And if denizens of the metaverse don’t want to don clothes from a specific brand, they can also design their own NFT wardrobes through projects like The Fabricant Studio, hosted by The Fabricant, a digital fashion house headquartered in Amsterdam.


An image from The Fabricant's collection for Puma/ Photo credit: Kerry Murphy/The Fabricant

The company envisions the metaverse as a place where there are cyber materials to choose from, while meta tailors, professional buyers, and multilabel retailers all work together to create decentralized fashion. While the devil is in the details, this trend could take off in Shein-esque fashion. After all, people spend thousands of dollars on virtual clothing - a designer made US$15,000 to $20,000 in just three weeks by selling digital kimonos for about US$140 each.

Aside from luxury brands, companies like Samsung are already exploring the new frontier. Samsung jumped into the metaverse with the Samsung 837X, a virtual store modeled after its flagship New York City real-life counterpart. Though this virtual store was a temporary one, the South Korea-based company is likely to take the experience to other platforms. (Its VC arm Samsung Next has already invested in related projects such as The Sandbox, Axie Infinity, etc.)

The future of shopping could very well involve digital avatars trying out clothes, shoes, and sunglasses before buying “phygital” goods. Meanwhile, the creation of shopping stores and malls in the metaverse - modeled around those in IRL - seems like an obvious next step, and holds a wealth of unlocked potential.

As I tinker with the idea of getting a car, the metaverse could have offered customers like me - who are wary about stepping outdoors amid the Covid-19 pandemic - the chance to test out cars on a Formula One track. After all, the metaverse is all about pushing boundaries and ideas we are familiar with.

But the newness of the tech means most glimpses of shopping in the metaverse are purposely only slightly altered versions of reality.

That’s why there are no cars floating mid-air in the metaverse yet - it allows people to make a smoother transition to the metaverse. “There is no playbook for brands to have it so far removed from what they have now,” says RFOX’s Fairbank, adding that retailers are hestiant about moving “too far from the conventional showroom.”

Businesses at the moment seem to be throwing pebbles into the deep waters of the metaverse, seeing how far the ripples go. Perhaps there really is some wisdom in treading with caution in a world whose building blocks are still coming together. But then again, the metaverse might be just the place for the bold to take chances. After all, what would lure us to a world that's almost the same as the one we’re already in?

-- Nikita

NEWS YOU SHOULD KNOW

Check out Tech in Asia’s coverage of Asia’s ecommerce scene here.

1️⃣ Malaysia's Carsome has raised US$290 million in a round led by 65 Equity Partners, SeaTown Holdings, and Qatar Investment Authority. The round pushes, the car marketplace's valuation to roughly US$1.7 billion.

2️⃣ India-based hyperlocal delivery firm Dunzo has raised US$240 million in a round led by Reliance Retail Ventures. Dunzo plans to use the funds to expand its network of dark stores and bolster its B2B vertical to support logistics services for local merchants in an increasingly competitive market.

3️⃣ Online classifieds firm Carousell is in merger talks with blank-check company L Catterton Asia Acquisition Corp to list itself in the US in a deal that will potentially value the joint entity at US$1.5 billion.

4️⃣ Grab, the Southeast Asian super app, is testing a new variant of its self-pickup feature that allows users to pre-order certain items and collect them from a common pick-up point in Singapore’s Punggol area. The company has been leaning on its delivery services more than ever after the Covid-19 pandemic hit its transportation and travel business.

5️⃣ Indonesia-headquartered J&T Express has expanded its logistics network to the United Arab Emirates and Saudi Arabia. The company plans to list on the Hong Kong stock exchange this year.

FYI

Amazon slips to fourth in global rankings for shopping apps

Much like the metaverse, conventional ecommerce is constantly changing and evolving. So it comes as no surprise that Amazon’s global rank among shopping apps is slipping. Shopee’s feat of becoming the most downloaded app in 2021 isn’t shocking either. Shein nabbing the second spot is also understandable as the fast-fashion firm saw a meteoric rise this year. But coming in third is Meesho. That’s a surprise because, as this report points out, this Indian social commerce app wasn’t even on the radar before 2021.

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