[Asia Economy Reporter Donghyun Choi] Fashion companies that were confined to offline businesses are increasingly attempting to break down the boundaries between online and offline businesses by utilizing non-fungible tokens (NFTs).
According to the industry on the 7th, Koscom classified NFTs into five categories in its January report titled 'The Emergence of NFT Financial Services': ▲Game NFTs ▲NFT Art ▲Security-type NFTs ▲Payment Method NFTs ▲Physical NFTs. Currently, in the highly competitive fashion market, various fashion companies ranging from global luxury brands to established domestic brands and home shopping channels are actively entering the NFT business.
The combination of the fashion industry and NFT technology may seem contradictory, but they share many similarities. Both limited-edition fashion and NFTs have the common characteristic of high scarcity, available only to a select few. However, there are few successful cases of synergy between the real economy of fashion, which has a history spanning hundreds of years, and the still not fully popularized virtual NFT economy.
In this context, recently, global luxury fashion brands such as Gucci, Balenciaga, Dolce & Gabbana, and Louis Vuitton have been showcasing marketing campaigns utilizing NFTs. Following this trend, domestic fashion brands are also paying attention to NFTs. In the first half of this year, LF, an established fashion company, plans to release its own brand Hejjeus’ 3D character ‘Hejjeus Friends’ on an NFT marketplace. Kolon Sports became the first outdoor brand to issue NFT certificates for its products. In February, Xexymix also recorded a sell-out within two days of selling its 3D character 'XESIA' on the Metagalaxia NFT platform.
Not only individual fashion brands but also commerce platforms are experiencing an NFT boom. For example, in February, Shinsegae SSG.com created a luxury NFT specialty section called ‘SSG Guarantee.’ Lotte Home Shopping also launched a virtual digital clothing brand called 'LOV-F' (Life of Virtual Fashion).
NFT-based sneaker brands have long been a hot topic in the NFT industry. Cryptokickers and Artifact (RTFKT) produced and sold virtual NFT sneakers without physical products early last year. RTFKT is a tech startup that increased the value of its virtual customized sneakers, combined with augmented reality (AR) filters, by auctioning them at an average price of $15,000 (about 18 million KRW) per item. In December last year, Nike announced its full-scale entry into NFTs by acquiring RTFKT. Recently, Adidas has also expanded its NFT business by collaborating with Yacht Club (BAYC), Prada, and others to sell limited-edition NFTs, showing that major global sneaker brands are expanding their NFT ventures.
In the fashion industry, attempts are being made beyond the concept of ‘buying an NFT and receiving clothes or clothing certificates.’ Gamification is a representative example. Gamification refers to the method of incorporating game elements into non-game fields to encourage consumer participation. In January, American fashion company GAP collaborated with the artist who created the famous American character Frank Ape to create fashion NFTs. At that time, buyers had to pre-purchase six types of general-grade NFTs to own special NFTs and physical clothes. The newly launched fashion brand What The Frog last month also released fashion NFTs using a gamification method similar to GAP’s. What The Frog randomly awards physical clothes with each NFT purchase. Collecting all six versions of NFTs allows the owner to receive a special NFT and clothes. In September, they plan to open offline pop-up stores in Seoul, New York, and Tokyo to expand the offline community experience of fashion NFTs.
A representative from What The Frog explained, “Fashion NFTs are now entering an advanced stage where they are not limited to the digitalization of fashion products themselves but can enhance the intrinsic value of fashion through collaboration with various industries such as gaming, video, and community.”
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