China
How can brands use NFTs in marketing?
Editor’s note: Two years ago, the term “NFT” would have elicited a confused look from all but the most dedicated crypto or Web3 enthusiasts. Today, it is very much a part of the mainstream marketing lexicon, with everyone from Taco Bell to Tiffany jumping aboard the non-fungible token bandwagon. But in a world where The Wall Street Journal is declaring the “collapse” of the NFT market one moment and Eminem and Snoop Dogg are performing as Bored Ape characters the next, should brands be steering clear or investing in NFTs for the long-term? In this article, I would like to discuss the new scenarios of combining NFTs with brands. There are two reasons that inspired me to write about this. Firstly, since last year, there have been multiple discussions about new scenarios regarding NFTs. Discussions were heated after the advent of the crypto assets bear market, which brought more expectations and reflections about what NFTs can be used for. Secondly, as a Web3 builder, I interact with various NFT projects and creators, and many brands have come to me for advice and solutions on NFT marketing. So I’d like to put my thoughts into one coherent article. In short, brands are aware of the possibilities of NFTs as a new marketing approach, but they lack the understanding and systematic thinking about how and why it can be done.
Over the past 10 years, the traditional marketing approach of building a strong brand to attract repeated purchases gradually stopped being universally applicable. Brands are losing their effectiveness as they are faced with a series of outstanding problems: the high cost of new acquisitions, low user retention and loyalty, low conversion rates, low activity, and low repurchase rates. These changes are largely due to the diversification of the market as consumers become smarter and more powerful in selecting brands.
The failure of old experiences has led brand owners to wonder: is it still useful to invest a lot of resources in building brand power? Along with the rise of skepticism, brands have evolved in terms of marketing approach. First, in the past, brand marketing was regarded as a separate business module, while today more emphasis is placed on the integration with the brand and the effectiveness of marketing. Second, having seen the potential of big data, more brands have become obsessed with precision marketing, emphasizing ROI. Third, whether it is livestreaming, ad placement, or other factors, consumers with more simple and direct benefit perceptions are focusing on the price instead of the brand. Fourth, as the traffic dividend disappears, brands are focusing on the continuous operation of stock customers rather than the acquisition of incremental customers.
All these new changes have left brand marketing practitioners feeling lost. The word I hear most in my conversations with marketers is “difficult”: budgets are being slashed, ROI for advertising/events is low, and bosses are more focused on actual output – all of which means internal resistance to their efforts.
Branding is still important, but it’s not as important as it used to be. As one marketer told me, “Brands need to find a new narrative to fall back on, not only to win the hearts and minds of consumers but also to win internal recognition.” It is against this backdrop that many brand practitioners are now looking to NFTs as a breakthrough in solving the brand narrative crisis.
NFTs: A combination of asset value and individual expression value
When we talk about NFTs, it’s important to find out what an NFT is. The dominant feature of NFTs, or “non-fungible tokens”, is that they are indivisible and unique, compared to other crypto assets. These days, one can use NFTs for art collections, game props, social identities, and stores of financial value.
Although many use cases consider NFTs assets, there is another advantage for NFTs from the creator economy – in the world of Web3, NFTs blow the trumpet of individual self-expression.
How do we understand this value? From Rare Pepes to Crypto Kitties, Crypto Punks to BAYC, Azuki, Doodles, Moonbirds, and MEME representatives such as mfer and Goblintown, the NFT projects using their own narratives to attract people who identify with them are creating a community to express their values, emotions, preferences, and positions to the outside world.
The world is becoming increasingly more divisive, with the regression of globalization, the rise of populism, the widened gap between the rich and the poor, the invasion of privacy brought about by the monopoly of internet giants, the intensification of regional conflicts and wars, the fierce rivalry between major powers, the impact of the pandemic, and many other factors that continue to threaten the stability of international order and the global system. In the midst of such turbulence, decentralization has become increasingly more acceptable. Individuals are more motivated to express themselves and build followings through their expressions.
In addition, the rise of Gen Z has made self-expression even more important. Compared to their parents’ generation, young people are more independent and more willing to express their opinions and ideas. Today, on social media platforms such as YouTube, Instagram, and TikTok, we see more and more young people expressing their personalities, ideas, and values through text, video, and music.
Some might say that self-expression doesn’t seem like a novelty, as it is already mainstream in the traditional creator economy. I agree with this statement; however, I think that NFTs will give people the desire and ability to express their rights more than in the past. The reason is that NFTs are an important part of Web3, and the values advocated in Web3 such as decentralization, de-trust, privacy protection, affirmation of rights, putting revenue back in the hands of creators, and respect for individual expression will all be reflected and recognized in NFTs. Whether you have an NFT avatar or create your own NFT (profile picture, music, video, etc.), you will realize that you have a unique identity – an expresser that can make your voice heard by the world and win your own users and fans.
This also convinced me of something else: just as today everyone is able to make TikTok videos and earn money that way, the threshold for NFT production and creation will be just as low, which means that everyone will have the opportunity to produce and create their own NFTs. In other words, in the future, one can be a consumer of NFTs, as well as a producer.
READ MORE: Web3 in China: Will it happen, and what form will it take?
The combination of NFTs and branding: brand as a service
After talking about the value of NFTs, it’s time to return to the central theme of this article: what are the new scenarios in which NFTs and brands can be combined? The relationship between brands and consumers is that of benefit exchange, with brands providing certain goods or services and consumers paying for what they enjoy. Once the transaction is concluded, the relationship is weakened, which is why every brand wants to strengthen its brand power to continuously maintain or enhance its relationship with consumers. But in the era of Web3, the emergence of NFTs has the potential to essentially change the relationship between brands and consumers, where the transaction is not the end of the relationship, but the beginning of it. In other words, this new approach is Brand as a Service.
How can this be done? Let me explain through a hypothetical case.
Problem to be solved: A fashion brand offers a series of 10,000 T-shirts priced at $80, and the customer gets an NFT after spending $80. How could this brand increase sales and enhance consumer loyalty through NFTs?
Possible approach:
Step 1: This brand should make its NFT a CC0 project, i.e. give up copyright and allow consumers to remix and recreate the NFT after purchasing the brand’s T-shirt. One small note: the CC0 statement only waives copyright, but no other rights are mentioned, such as trademark rights and patent rights.
Step 2: In addition to giving consumers the opportunity to create their own products, the brand could launch a community competition for recreations and let the community vote on them. For example, the top three winning designers could cooperate with the brand to sell NFTs and clothes, and the proceeds from the sales could be shared to an extent.
Step 3: Each consumer will interact with the brand and the brand can award additional NFTs with different levels of rarity according to different contribution levels (the weighting can be a certain amount of consumption + recreation activity + sales of recreation NFTs and clothes, etc.). The NFTs are programmable and the rarity will be enhanced with an increase in consumer contribution. The rarer the item, the more valuable it is to collect and distribute.
Having said that, for the above example to be realized, several prerequisites need to be in place:
- An NFT creation tool with a low threshold that enables every consumer to recreate the NFT.
- A change in the brand’s perception: the brand needs to transition from the single interest relationship of the past to the Brand as a Service relationship.
- Web3 becoming more widespread among consumers.
Today, more and more brands are trying to use NFTs to connect with users. Examples include Starbucks’ upcoming coffee-themed user loyalty program, Coca-Cola’s Pride Collection NFT in collaboration with Rich Minsi, and Tiffany’s limited NFT “NFTiff”.
But in general, the combination of NFTs and brands at present is more of a marketing gimmick aimed at low-cost acquisitions and new membership, and is still essentially at the level of benefit exchange. I propose Brand as a Service in the hopes of exploring and redefining the relationship between brands and consumers via NFTs or Web3, i.e. consumers and brands are no longer corresponding subjects to each other – consumers can become designers for brands, and can also own their own sub-brands based on existing brands. Of course, this does not mean that every consumer will become a designer or own their own brand, just as we all have the ability to become an influencer, but not everyone would choose to be a TikTokker. Yet this is where Web3 is most meaningful, not only presenting the value of decentralization, de-trust, privacy protection, and empowerment but also making it more possible for the masses to have a voice and be creative (as evidenced by DAO), an opportunity that is more inclusive and open to all.
I have always believed that Web3 and Web2 cannot be two separate worlds and that Web3 should be rooted in real life and solve real-life problems. The new scenario of combining NFTs with the brand is an evolving topic and is a focus for me. I look forward to building a new way of marketing with more brand owners as Web3 gradually develops.
Liam Wang is a Web3 builder, explorer, narrator, and independent investor with extensive experience in the Chinese capital market and the global markets. Reach out to him on Twitter @LiamWang88
More by Liam Wang
WASHINGTON (AP) — China has surged sales to Russia of machine tools, microelectronics and other technology that Moscow in turn is using to produce missiles, tanks, aircraft and other weaponry for use in its war against Ukraine, according to a U.S. assessment.
Two senior Biden administration officials, who discussed the sensitive findings Friday on the condition of anonymity, said that in 2023 about 90% of Russia’s microelectronics came from China, which Russia has used to make missiles, tanks and aircraft. Nearly 70% of Russia’s approximately $900 million in machine tool imports in the last quarter of 2023 came from China.
Chinese and Russian entities have also been working to jointly produce unmanned aerial vehicles inside Russia, and Chinese companies are likely providing Russia with nitrocellulose used in the manufacture of ammunition, the officials said. China-based companies Wuhan Global Sensor Technology Co., Wuhan Tongsheng Technology Co. Ltd. and Hikvision are providing optical components for use in Russian tanks and armored vehicles.
The officials said Russia has received military optics for use in tanks and armored vehicles manufactured by Chinese firms iRay Technology and North China Research Institute of Electro-Optics, and China has been providing Russia with UAV engines and turbojet engines for cruise missiles.
Russia’s semiconductor imports from China jumped from $200 million in 2021 to over $500 million in 2022, according to Russian customs data analyzed by the Free Russia Foundation, a group that advocates for civil society development.
Beijing is also working with Russia to improve its satellite and other space-based capabilities for use in Ukraine, a development the officials say could in the longer term increase the threat Russia poses across Europe. The officials, citing downgraded intelligence findings, said the U.S. has also determined that China is providing imagery to Russia for its war on Ukraine.
The officials discussed the findings as Secretary of State Antony Blinken is expected to travel to China this month for talks. Blinken is scheduled to travel next week to the Group of 7 foreign ministers meeting in Capri, Italy, where he’s expected to raise concerns about China’s growing indirect support for Russia as Moscow revamps its military and looks to consolidate recent gains in Ukraine.
President Joe Biden has previously raised his concerns directly with Chinese President Xi Jinping about Beijing indirectly supporting Russia’s war effort.
While China has not provided direct lethal military support for Russia, it has backed it diplomatically in blaming the West for provoking Russian President Vladimir Putin’s decision to launch the war and refrained from calling it an invasion in deference to the Kremlin.
China has repeatedly said it isn’t providing Russia with arms or military assistance, although it has maintained robust economic connections with Moscow, alongside India and other countries, amid sanctions from Washington and its allies.
“The normal trade between China and Russia should not be interfered or restricted,” said Liu Pengyu, spokesman of the Chinese Embassy in Washington. “We urge the U.S. side to refrain from disparaging and scapegoating the normal relationship between China and Russia.”
Xi met in Beijing on Tuesday with Russian Foreign Minister Sergey Lavrov, who heaped praise on Xi’s leadership.
Russia’s growing economic and diplomatic isolation has made it increasingly reliant on China, its former rival for leadership of the Communist bloc during the Cold War.
Treasury Secretary Janet Yellen, who returned to Washington this week from a visit to Beijing, said she warned Chinese officials that the Biden administration was prepared to sanction Chinese banks, companies and Beijing’s leadership, if they assist Russia’s armed forces with its ongoing invasion of Ukraine.
The Democratic president issued an executive order in December giving Yellen the authority to sanction financial institutions that aided Russia’s military-industrial complex.
“We continue to be concerned about the role that any firms, including those in the PRC, are playing in Russia’s military procurement,” Yellen told reporters, using the initials for the People’s Republic of China. “I stressed that companies, including those in the PRC, must not provide material support for Russia’s war and that they will face significant consequences if they do. And I reinforced that any banks that facilitate significant transactions that channel military or dual-use goods to Russia’s defense industrial base expose themselves to the risk of U.S. sanctions.”
The U.S. has frequently downgraded and unveiled intelligence findings about Russia’s plans and operations over the course of the more than 2-year-old war with Ukraine.
Such efforts have been focused on highlighting plans for Russian misinformation operations or to throw attention on Moscow’s difficulties in prosecuting its war against Ukraine as well as its coordination with Iran and North Korea to supply it with badly needed weaponry. Blinken last year spotlighted intelligence that showed China was considering providing arms and ammunition to Russia.
The White House believes that the public airing of the intelligence findings has led China, at least for now, to hold off on directly arming Russia. China’s economy has also been slow to emerge from the COVID-19 pandemic. Chinese officials could be sensitive to reaction from European capitals, which have maintained closer ties to Beijing even as the U.S.-China relationship has become more complicated.
Meanwhile, China on Thursday announced rare sanctions against two U.S. defense companies over what it called their support for arms sales to Taiwan, the self-governing island democracy Beijing claims as its own territory to be recovered by force if necessary.
The announcement freezes the assets of General Atomics Aeronautical Systems and General Dynamics Land Systems held within China. It also bars the companies’ management from entering the country.
Filings show General Dynamics operates a half-dozen Gulfstream and jet aviation services operations in China, which remains heavily reliant on foreign aerospace technology even as it attempts to build its own presence in the field.
The company also helps make the Abrams tank being purchased by Taiwan to replace outdated armor intended to deter or resist an invasion from China.
General Atomics produces the Predator and Reaper drones used by the U.S. military.
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AP writers Didi Tang and Fatima Hussein contributed reporting.
China
China’s gambling hub of Macao holds its its final horse race, ending a tradition of over 40 years
MACAO (AP) — After more than 40 years, Macao’s horse racing track hosted its final races on Saturday, bringing an end to the sport in the city famous for its massive casinos.
In January, the city’s government said it would terminate its contract with the Macao Jockey Club in April. The decision came at the request of the Macao Horse Race Company, which cited operational challenges as part of the reasons for the closure.
On Saturday, gamblers congregated in the half-full stands and placed their final bets. Some tourists also visited the track.
Mai Wan-zun, a student from mainland China in Macao, said she wanted to get a taste of the atmosphere. “We could come to see horse racing here in Macao, but not in mainland China,” she said.
Helena Chong, a Macao resident, decided to visit the race course for the first and last time to see what it’s all about.
“It’s a pity to see the end of all this gambling and entertainment,” she said.
Horse racing in the former Portuguese colony has struggled with economic challenges in recent years and has yet to rebound from the impacts of the COVID-19 pandemic. Its jockey club had accumulated operating losses of over $311 million, the Macau News Agency earlier reported.
Under the termination arrangement, the horse racing firm had pledged to arrange for transportation of owners’ horses to other locations by March 2025, and handle the company’s employees according to the law, the government said.
In neighboring Hong Kong, horse-racing remains popular and profitable. Its jockey club runs various gambling activities and is the city’s major donor of many charity works.
BEIJING (AP) — At 53, Guan Junling is too old to get hired at factories anymore. But for migrant workers like her, not working is not an option.
For decades, they have come from farming villages to find work in the cities. Toiling in sweatshops and building apartment complexes they could never afford to live in, they played a vital role in China’s transformation into an economic powerhouse.
As they grow older, the first generation of migrant workers is struggling to find jobs in a slowing economy. Many are financially strapped, so they have to keep looking.
“There is no such thing as a ‘retirement’ or ‘pensions’ for rural people. You can only rely on yourself and work,” Guan said. “When can you stop working? It’s really not until you have to lie in bed and you can’t do anything.”
She now relies on housecleaning gigs, working long days to squirrel away a little money in case of a health emergency. Migrant workers can get subsidized health care in their hometowns, but they have little or no coverage elsewhere. If Guan needs to go to hospital in Beijing, she has to pay out of pocket.
As China’s population ages, so are its migrant workers. About 85 million were over 50 in 2022, the latest year for which data is available, accounting for 29% of all migrant workers and up from 15% a decade earlier. With limited or no pensions and health insurance, they need to keep working.
About 75% said they would work beyond the age of 60 in a questionnaire distributed to 2,500 first-generation migrant workers between 2018 to 2022, according to Qiu Fengxian, a scholar on rural sociology who described her research in a talk last year. The first-generation refers to those born in the 1970s or earlier.
Older workers are being hit by a double whammy. Jobs have dried up in construction due to a downturn in the real estate market and in factories because of automation and the slowing economy. Age discrimination is common, so jobs tend to go to younger people.
“For young people, of course, you can still find a job, positions are available, though the wage is not high enough,” said Zhang Chenggang of Beijing’s Capital University of Economics and Business, where he directs a center researching new forms of employment.
“But for older migrant workers, there simply are no positions,” said Zhang, who conducted field studies at four labor markets across China late last year. “Now, the problem is that no matter how low the wage is, as long as someone pays, you will take the job.”
Some job recruiters contacted by AP said older workers don’t work well or have underlying illnesses. Others declined to answer and hung up.
Many are turning to temporary work. Zhang Zixing was looking for gigs on a cold winter day late last year at a sprawling outdoor labor market on the outskirts of Beijing.
He said he was fired from a job delivering packages because of his age about three years ago, when he reached 55. In December, he was earning 260 yuan (about $35) a day installing cables at construction sites.
Zhang Quanshou, a village official in Henan province and a delegate to China’s National People’s Congress, said some older migrant workers are just looking for work near their hometowns, while others still head to larger cities.
“Some older migrant workers are finding temporary jobs, so it is important to build the temporary job market and provide a better platform for such services,” Zhang, the Communist Party secretary of the village, said in an emailed response to questions during a recent annual meeting of the Congress.
Guan, who comes from a rice-farming region in the north, worked on a clothing factory assembly line until she was laid off when she was in her 40s. She then worked various jobs in different cities, winding up in Beijing in 2018.
She works seven days a week, partly because she’s afraid labor agencies won’t call again if she turns an offer down.
Over February’s Lunar New Year holiday, when migrant workers traditionally go home to visit their families, she stayed in Beijing as a caretaker for an elderly woman, because the woman needed help and she needed the money.
“People either want someone who’s educated or young, and I don’t meet either of those requirements,” said Guan, who dropped out after middle school because her parents had only enough money to educate their son. “But then I think, regardless of how other people look at me, I have to survive.”
Guan worries jobs will be even harder to find when she reaches 55. The retirement age for women in China is 50 or 55, depending on the company and type of work. For men, it is 60.
Lu Guoquan, a trade union official, has proposed relaxing age limits for jobs, judging workers by their physical condition instead of their age and making it easier for older people to find work through labor markets and online platforms.
“A large number of farmers have entered cities, making an important contribution to the modernization of our country,” said his proposal, made to an advisory body during the recent national congress and seen by the AP.
As workers grow older, “they are gradually becoming a relatively vulnerable group in the labor market and face a number of thresholds and problems in continuing to work,” it said.
Lu, director of the general office of the All-China Federation of Trade Unions, declined an interview request.
Duan Shuangzhu has spent 25 years collecting trash in one Beijing neighborhood after giving up a life of raising sheep and cows in north China’s Shanxi province when he was in his 40s. He gets up at 3:30 a.m. seven days a week to make his rounds. For that, he earns 3,300 yuan ($460) a month and has a basement room to live in.
Duan’s wife stayed on the farm, where she looks after their grandchildren. Duan has managed to save money for himself, his children and his grandchildren, but never paid into a pension system, directing what little he earns to his family.
That fits the pattern Qiu found in her research, which she published in a book last year. Older migrant workers moved to the cities to improve the lives of their children and other relatives, not themselves, she found. Most have limited or no savings, and few have climbed the economic ladder. They hoped their children would, but most ended up as migrant workers, too.
Most migrant workers’ earnings were spent on their children’s marriages, homes and education, Qiu said in her talk. “Basically, they did not begin working for themselves and planning for their own late years until the age of 55.”
Duan, at 68, has no plans to quit.
“As long as I can work every day, it’s enough to survive,” he said, standing next to a set of community rubbish bins, color-coded for recycling. “I didn’t grow up in a wealthy family — just filling my stomach each day is enough for me.”
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Associated Press researcher Wanqing Chen contributed to this story.
