Few Chinese Companies Involved in Digital Collections Disclose Related Revenue

So far, a recorded 26 A-share listed companies in China have become involved in digital collections, the country’s version of NFTs. Among these firms, 12 have launched their own digital collection platforms, but only three have announced the revenue related to this innovative business, according to a report by Cailian Press on September 9.

According to a report released by Vision China Group (VCG), a Beijing-based photo and media agency, on August 29, the company’s digital collection platform achieved sales revenue of 15.05 million yuan ($2.16 million) in the first half of 2022.

On May 30, digital tech firm Zhejiang Furun Corp announced that “Jingya,” a digital collection platform built by its subsidiary, had achieved sales reaching millions of yuan since it started internal alpha tests in January.

On February 14, Xi’an Qujiang Cultural Tourism announced that the company and its subsidiary had recently launched digital collections instead of NFTs. The related revenue accounted for less than 1% of the company’s annual revenue. However, in the 2022 semi-annual report published on August 18, revenue from digital collections was not announced, as the amount generated from each of the four digital collections currently issued is only about 10,000 yuan.

On the whole, current digital collection revenue accounts for a very small proportion of the total revenue of listed companies, and is largely disproportionate to the level of investment.

Industry insiders told Cailian Press that digital collections are the most extensive and popular form in the primary stage of metaverse. Many listed companies are involved in this field, which helps to promote the development of China’s metaverse industry. However, in order to cater to the capital market, some companies use the concept of digital collections to speculate on stock prices. At present, there are still many problems in the field, such as the small market scale, uncertain policy, and the tendency to become enmeshed in illegal business practices.

Listed companies have begun to cooperate with cultural property exchanges in various places. According to a report released by Wasu Holdings on August 29, Hangzhou Culture Assets and Equity Exchange, in which the company holds shares, sold six digital collections in the first half of this year. The company also mentioned in its report that this business is in the early stages, so there is great uncertainty concerning its future development.

Domestic cultural property exchanges in Hangzhou, Chengdu, Jiangsu and other Chinese cities have license advantages and regional attributes, and are exploring digital content.

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Industry insiders believe that local cultural exchanges have comprehensive and compliant licenses, as well as a deep understanding of laws and regulations governing various transactions. Listed companies can provide continuous financial support for them. In the past, cultural exchanges were trading platforms with strong government supervision, and it remains to be seen how this will change after cooperation with listed companies.