Chinese museums are using digital collectibles as an NFT alternative
Since May 2021, more than 30 of China’s top museums have adopted digital collectibles, reports Jing culture and trade.
The total market value of 4.6 million issued digital collectibles on Chinese platforms in 2021 is estimated to be around 150 million yuan ($22.4 million). Growth could be as high as 150 percent and reach 29.5 billion yuan ($4.6 billion) by 2026.
Digital collectibles versus NFTs
China’s attitude towards NFTs and cryptocurrency is increasingly negative, with many concerned that crypto could undermine traditional currency. And so it is terribly high environmental costs of mining, which was banned in China last year.
However, this unwelcoming environment has not stopped interest in the technology, and an alternative has been created. The digital collectible – a non-fungible symbol with a twist. These digital goods cannot be traded after purchase, and they cannot be purchased with cryptocurrency.
The Chinese government has been considerably more open to digital collectibles, although it still prohibits the purchase of them for speculative purposes. Despite this caveat, the market is growing rapidly, with The crypto potato reports more than 500 platforms offering services for digital collectibles in June 2022. This is up from 100 in February 2022.
Even tech giants like Tencent have started dabbling in the space, with strict caution of course. Digital collectibles are offered on private blockchains, priced in yuan.
The similarity between NFTs and digital collectibles is clear – but the most important difference is how easily they can be traded. NFTs are investments, seen less for the value of the content and more for the value of scarcity, which is what led to the widespread low-quality groups of NFTs. Since digital collectibles are only purchased once, they must be both high in quality and brand authenticity.
These characteristics are proving attractive to museums in China.
Digital collectibles and museums
Post-pandemic, museums around the world have embraced digital solutionswho want to increase their income and reach.
Digital collectibles achieve both of these goals. The digital nature of the products has the potential to connect with both a younger and potentially broader demographic.
Five sets of digital wall art collectibles made of ARTISTORY with the Dunhuang Inspiration UNESCO World Heritage Site had more than 60,000 pre-sale registrations. All 8,000 copies, priced at ¥118 each ($19), sold out immediately upon launch.
20,000 units of a bronze tiger head, a 3D model packaged with a narrative piece prepared by Beijing’s Poly Art Museumsold out almost immediately with grosses totaling ¥598,000 ($96,000).
Strategies to maximize value
Brands working with digital collectibles have developed strategies to maximize revenue and engagement.
A fundamental aspect of digital collectibles is that they cannot be traded. In fact, this is best emphasized in the Chinese market. This means that there is a limit to the revenue that can be generated, and therefore part of the value lies in increasing brand recognition. Collaboration between brands can be effective.
There have been some collectibles that have combined physical and digital products. The idea is that by giving the customer a physical reward on top of a digital collectible, or vice versa, the buyer is incentivized to return to that brand again to complete a collection. Essentially, leaning into the unique draw of non-marketability attracts an audience obsessed not with monetary value, but with the piece’s inherent value or rarity.
In addition to Chinese museums venturing into digital collectibles, this could be an area that museums and galleries outside of China can explore to increase brand awareness. The National Gallery has a five-year strategy to enter the market, with a Tmall store, interactive pop-ups and a branded cafe.
Main image: Dunhuang digital collectible murals created by ARTiSTORY
