2022 China Digital Collection Industry Insight Report

In March 2021, Beeple’s digital collection (NFT) works were auctioned for US$69.34 million, bringing the digital collection industry to more awareness.

Digital collection refers to Non-Fungible Token (NFT), which is an encrypted digital proof of rights and interests that cannot be copied, tampered, and divided based on blockchain technology, that is, “the digital ownership certificate of virtual assets or physical assets “.

Development Environment

Policy side: relevant policies are introduced to guide the healthy and orderly development of the industry

As the underlying technology supporting the development of digital collections, blockchain has been written into the 14th Five-Year Plan. In 2021, the Ministry of Industry and Information Technology and the Cyberspace Administration of China will issue policies to promote the integrated development of blockchain and digital collections. At the same time, relevant industry associations and enterprises jointly issued industry self-discipline clauses to promote the healthy development of the industry.

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Demand side: Stars and enterprises enter the market to expand the demand space of my country’s digital collection market

With the popularity of digital collections overseas, more and more domestic stars and enterprises have launched digital collections, and their star effect has driven more people to pay attention to digital collections, forming a snowball effect, so that buyers of digital collections are no longer limited to the blockchain. Followers have also expanded to fans, corporate consumers and other groups, driving the booming development of the digital collection industry from the demand side. For example, celebrities such as Shawn Yue, Jay Chou, Wilber Pan, and companies such as Jiang Xiaobai and Anta have launched digital collection projects.

Development status

Industry chain situation: it consists of infrastructure layer, project creation layer and derivative application layer

Infrastructure layer: The infrastructure layer provides technical support such as blockchain and storage for digital collections to ensure their safe issuance and trading. The infrastructure layer of digital collections in China is mainly based on alliance chains. The alliance chain is a non-completely decentralized blockchain. Although the central party can modify the information on the chain, it can also control the casting and trading rules of digital collections to reduce the transaction risks of digital collections. In addition, the alliance chain only needs to be verified by a small number of nodes, which reduces the loss or tampering of content while reducing energy consumption.

Project creation layer: digital collections are minted by the distribution platform and the project issuer, and distributed in the primary market. Among them, distribution platforms include comprehensive Internet platforms and digital content platforms such as novels, comics, music, and animation. Comprehensive Internet platforms, such as WhaleTalk and Magic Core, rely on the group’s alliance chain infrastructure, content, user ecology, etc., and have the advantages of technical support, project IP, distribution channels, etc., and gradually become a comprehensive distribution platform; digital content platforms have relatively Rich digital content resources can provide copyright protection and value realization for digital content. In addition, project issuers include content platforms and 2C companies with IP copyrights. IP copyright owners have more IP reserves, and build them into digital collections to realize the cross-border derivative realization of IP, and at the same time enhance the influence of IP; 2C companies such as tourism, consumer and cultural companies can make their own products and brands into Digital collections, sold individually or in pairs.

Derivative application layer : secondary applications of digital collections, such as second-hand transactions, financing platforms, etc. Due to policy supervision and other reasons, my country’s digital collection derivative application platform has not yet been established.

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Main application scenarios: With the gradual improvement of the digital collection ecology, its application scenarios are increasingly enriched

art collection

At present, art collection is one of the main application scenarios of digital collections. Traditional art collections face the problem of lack of trust, and there are fakes and auction companies selling fakes in the market. The digitization of works of art can use the shared ledger of nodes to ensure its authenticity, and can reduce the possibility of fraud by checking the circulation records on the chain.

Brand Marketing

The concept of digital collections is avant-garde and has strong appeal to young consumers. Its value to brand marketing can be realized by expanding marketing methods and realizing brand value. On the one hand, brands can digitize their products and rights, develop more creative marketing methods, and expand marketing boundaries. For example, brands donate digital collections to consumers through online innovative interactive activities such as lucky draws, festivals, and cross-border integration, while conveying their product characteristics and brand culture, seizing consumers’ minds and enhancing brand influence; Digital collections are bound with some rights and interests, transforming consumers from ordinary buyers to rights owners, and improving user stickiness. On the other hand, brands make their avatars, logos, etc. into digital collections to realize the value of the brand.

Development Outlook

With the entry of local cultural exchanges, the digital collection market is expected to be gradually standardized

The Cultural Exchange is a comprehensive service platform engaged in cultural property rights transactions and related investment and financing services. It is a state-owned cultural unit with strong credibility. Among them, the national-level cultural exchanges are directly planned and supported by the Central Propaganda Department and other central ministries and commissions, including Shanghai and Shenzhen; the local-level cultural exchanges are established with the approval of the provincial/municipal people’s governments and approved by the inter-ministerial joint meeting of the State Council.

By building alliance chains, launching digital collection trading platforms, publishing digital collections and other methods, the China Cultural Exchange has entered the digital collection industry, established normative systems and standards in terms of trading systems and avoiding investment speculation, and promoted more project parties and distribution platforms to enter the market. Help the standardized development of the digital collection industry. For example, Shanghai Cultural Exchange and Xinhuanet have jointly built a national-level digital cultural and creative regulatory ecological matrix, established a national-level copyright transaction protection alliance chain, and promoted the standardized governance of the digital collection industry.

With the liberalization of policy supervision and the continuous implementation of application scenarios, the market space for digital collections is vast

With the increasing popularity of the concept of digital collections, its application scenarios will change from the entertainment field to digital insurance, digital education, digital scientific research, digital social networking and other fields that require clear property rights, promoting the continuous growth of the digital collection industry. For example, in the field of scientific research, the combination of digital collections with experimental data and biological samples can clarify the source of information and data, improve the openness of resources, and reduce the risk of plagiarism and data loss. In addition, the secondary market for digital collections in my country has not yet been opened. If policy supervision is liberalized, the market size of digital collections will be nearly 5 times that of the unopened secondary market. According to Guosen Securities data, in 2026, after the opening of the secondary market, the size of my country’s digital collection market will reach 29.83 billion yuan.

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