Believe it or not, this is the official website of the largest metaverse project currently being developed. China’s Virtual Economy District which will be an ‘aggressive’ attack on retail everywhere. Ever since October 2007 rumours and facts about the ‘CVD’ have been surfacing in the media. The virtual district is said to be an 80-square-kilometre complex in West Beijing, being able to hold ‘billions’ of avatars, will use multiple platforms, the most dominant one being Entropia Universe - and is to be launched in June 2008, just in time for the Olympics in Beijing.
The cyberspace China envisions will have hundreds of ‘planets’ inside the Mindark (Entropia) and Dotman networks. Other interesting facts include the involvement of China’s largest mobile internet operator China Mobile with over 300 million subscribers, and the expected user base of 150 million users by 2010 and an concurrent login base of 7 million. (source Virtual World News)
But what drives this ‘mind-boggling’ project? Robert Lai, chief scientist of the Beijing Cyber Recreation District tells Victor Keegan of the Guardian the simple economic power that stews the metaverse in China while he points at his shirt.
“This cost $1 when it left China but he noticed, walking around the shops, that it would retail at $20 over here. This project is about staking a claim to that value added. And not just in shirts. A western avatar wandering around one of these virtual worlds could almost as easily be ordering a car built to his specification for delivery in the UK. Goods that were made in China could have web addresses to take western buyers direct to a Chinese website for further purchases or replacements.”
In other words, the China Virtual Economic District aims to ‘cut out the middle man’ by buying directly from the factory. Now, this sounds really hard to believe for a number of reasons. Factories are production models in the last phase of a designing process in a long chain of product design. A shirt has to be designed, branded, advertised, sold and delivered to the consumer. The actual costs the factories generate in this process are minimal, and the real value is added trough branding (the ink to print the Nike logo might be 0.01 cents, it adds 20 dollars to the price of the shirt).
Furthermore, the retail is set to work according to the ‘just-in-time‘ principle. By removing traditional inventory retail would simply become more efficient and be extremely competitive with traditional retail still bound by expensive ‘warehousing’ - a physical location where every product costs something every day it’s not sold. Much like the Amazon.com model (New Retail) versus traditional bookshop retail. Though there is a big (huge) potential for retail here, we see very slow adoption of e-commerce on the ‘flat web’, regular internet pages. VCDis very vague on the added value of 3D other then virtual worlds being ‘the hottest topic in the world’.
The CVD said it will open their doors to all retailers from all over the world. It’s nice of China to consider ‘us’ - the west, but will the traditional retail models of the west feel anything for trying to compete with a market that aims to ‘cut out the middle man’? As explained above, a lot of the value is created by this same ‘middle man’ (brands such as Adidas, Brunotti etc.), the retail model of the west. China’s manufacturing costs are a fraction of what they are in the west, and with the Chinese factories now selling directly to the public this would create an obvious problem for the western retail model.
After all the almost unfathomable entrepreneurial optimism I think its time for a little reality check. As much as corporate China wants the adoption of 3D technology to happen over the next two years I fear they will find their digital dreams of a virtual, competitive platform have to be adjusted before the year 2010. The 150 million users target seems to way out of reach and the business model drawing in these millions seems to ignore the fact traditional companies (which factories often are) are notoriously slow to adopt new technological models. Especially taken into account these companies don’t even have any existing ‘business to consumer’ retail models. They need the ‘middle man’ to communicate to their markets and even though the internet will change this - we are a long way from China’s Virtual Utopia.
Posted on: February 5, 2008 | Share on:
Abhishek Saxena on 
Sophie on 
Laurent Blondeau (Evidences)
said on February 5th
Hi !
It’s stunning how power China, can rise a project from nothing, meanwhile they are able to censor and forbid all Web access, to avoid other ways of thinking than basic line…
And most of it : it goes really faster than we fell it goes ; And what virtual worlds can seem in such countrylike ?…
L.
Dave Elchoness
said on February 5th
Perhaps things will not turn out exactly as the CVD imagines today. But there is no question that what the CVD proposes is potentially the most significant virtual worlds project ever undertaken. Even if the so-called “middle man” is not taken out of the equation, what is the impact of China being “closer” to me in the middle of the US, because of its virtual world at my fingertips, than New York or Los Angeles. Consider the opportunities for retail, services, etc. and moreover, the boost something like the CVD will provide to virtual worlds for business (or work). I have been saying for some time that there will be an event that catapults virtual worlds technology from an interesting experiment to a critical business tool. CVD could be it, couldn’t it?
Rick van der Wal
said on February 5th
Ohh I agree, but I can’t help but shake my head at the media outings of CVD so far - the have been… poor at best for a multi - million dollar project to be launched in June.
It seems to me they are trying to create a self fulfilling prophecy by doing exactly the same thing Linden Labs regrets doing in 2006. Create unrealistic expectations, and once this comes ‘crashing down’ (i.e. meeting none of the targets) it has the potential to damage the platform again as well.
I am very excited to see Entropia be deployed like this, but 150.000.000 in two to three year with this kind of retail implementation, very, very unlikely :) What excites me most in the project is the combination of different platforms, and the involvement of China Mobile. Mobile web is really a wildcard and I’m curious what angle they will take. However, i could not find any good recourses on how they where involved.
Alex
said on February 8th
Every communist regime dreams of the world domination based on it’s slave labor. This is just a bunch of usual communist bulshit. Forget about it.
Amazon works ONLY because of the UPS deal. Who will be providing delivery infrastructure for this… ‘enterprise’ … hehe :)
Bunch of bullshit.
Rick van der Wal
said on February 15th
I’m sorry Alex, Akismet filtered your comment as being spam for some reason.
I think because of the Amazon formula they where able to cut a good deal with the distribution company and now compliment each other, but distribution is indeed largely unaddressed. As are the huge taxes and other additional costs as described in the article - but right now I don’t see why the basic webshop shipping system would not suffice if its just about transportation. I can already mail-order products from Japan and China, just at ridiculous costs which makes competing with existing European markets next to impossible.
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SuezanneC Baskerville
said on March 3rd
There have been many silly ideas supported by crazy people working for the government in the past.
I suspect that this is just another such silly notion. Some guy with technical enthusiasm and a desire for a big budget government position, convincing other government people with little technical knowledge to spend large sums of money stolen by government from laborers and businessmen.
Freed from the constraints of earning money through voluntary transactions, government schemes can become quite fantastic.
ryker
said on March 8th
Yay!!!! How come our government feels so…….dusty….when you read about this kinda stuff? Well at least there is free wifi provided by google in mountain view, the Center of Silicon valley….. or did they scrap that idea?
The Chinese government immediately recognizes the potential for the internet
so they…….do what any government with brains would do..CENSOR..YAY!!!!
AND…they also have decided to jump in the River with this project……
no, I dont think they view it as some philanthropic project……
ryker
said on March 8th
immediate access to millions for the purpose of…. mind control( someone please play some sinister organ sci fi/horror music in the background)