A study of 3,000 consumers across Korea, US, UK, Germany, Mexico, Saudia Arabia, Egypt, and the UAE by creative agency Virtue revealed that virtual goods are no longer considered niche purchases, with more than eight in ten (82%) of respondents having already purchased a virtual good and less than five per cent saying they had no intention of buying a virtual product.
Across all virtual goods, fashion is the most popular category. More than nine in ten (94%) say they see digital fashion becoming mainstream, of which 67% predict it will become mainstream in the next five years. One in three said they would purchase full virtual outfits.
Authors of the study believe virtual goods represent an untapped opportunity for brands to expand their footprint in Asia and more effectively connect with the world’s largest youth population.
Huiwen Tow, head of strategy at Virtue APAC, said while virtual purchases are currently predominantly manifesting in fashion, there are significant opportunities in categories such as beauty and alcohol.
Tow said: "In a region where creativity is fast emerging as an aspirational value in the mainstream, this represents an opportunity for brands to connect with the emerging creative class in Asia to give them a platform to experiment and showcase their unique talents, as well as forge a sense of belonging and community. The idea that a digital asset could be a passport to multiple brand experiences is a way for brands to extend the customer relationship in ways unlike before."
In Korea, the only Asian market included in the study, 86% of respondents had purchased a virtual product. While identity is still the primary driver for buying virtual goods, respondents in Korea are more likely than global respondents to state 'access' as a reason for purchasing virtual goods. Close to two-thirds (65%) of Koreans say that ‘scarcity/limited editions’ are likely to influence their desire to purchase digital fashion.
When buying digital fashion, respondents in Korea are also particularly keen on design, personalisation, and the brand’s role in sustainability. Seven in ten (72%) say ‘design’ influences their desire to purchase digital fashion, 71% say the ability to ‘personalise it’ impacts their decision to purchase digital fashion, with the same number citing ‘sustainability’ of digital fashion as being a purchase driver.
“Despite all the hype around the fortunes that can be made from investing in virtual goods, the biggest motivator for many buyers is identity,” said Tow. "This is true for all categories where image and identity are among the biggest factors in driving brand preference. While we are seeing some moves being made in this space, the market remains in its infancy and brands that act quickly will reap the rewards from an audience who crave authenticity and uniqueness.”
Tow believes that the opportunity for virtual goods to help brand growth in Asia is particularly significant: “For a region with such a large youth population, this represents a massive opportunity for brands to play a relevant and influential role in helping a coming-of-age audience express their unique individuality and deep exploration of other potential selves beyond digital twinning."
In a further sign that interest and demand for virtual goods is growing, Meta, the parent company of Facebook and Instagram, announced that starting this month, it will give a handful of content creators the opportunity to sell virtual items to users in Horizon Worlds, its main platform in the metaverse.
"For example, someone could make and sell attachable accessories for a fashion world or offer paid access to a new part of a world," the Californian tech giant said in a press release.