When Retail Goes Virtual

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by: C. Sven Johnson

I caught a whiff of this piece on the Guardian earlier this month, and having finally read it, all I can say is, thank the Flying Spaghetti Monster someone else is starting to talk about the impact virtual worlds will almost certainly have on real world commerce. Victor Keegan has fired a nice warning flare in his article, “Virtual China looks for real benefits” (Link). From the piece:

Anyone who still thinks that virtual worlds such as Mind Ark’s Entropia Universe or Second Life are the plaything of geeks should look at what is happening in China. It is simply mind-boggling and, if it all comes off, has awesome implications for western economies.

China is converting a 100 sq km site (yes, that is a very big space) on the former nationalised steel mill site to house, among other things, virtual worlds able to support not millions or tens of millions but billions of avatars.

When I asked Professor Lai to explain what this was all about, he touched his shirt. This, he said, 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.

If it were anyone but China planning this you would take it with a pinch of salt. But this is not the NHS, it is the world’s biggest manufacturing country pitching to lead the next stage of development as the internet moves into three dimensions. When I asked the professor whether the coming of virtual worlds would be on a scale commensurate with the industrial revolution, he replied: "It will be faster, bigger, more like an explosion."

Gareth Powell writes in his article for the China Economic Review (Link):

This is seriously important and may change the way the world shops. It could have a devastating effect on shops in the high street and could mean true global trading on an individual scale. A true revolution.
If you understand the concept of Second Life – a separate virtual world this will be easy to follow. A similar set up is being set up by the Beijing municipality is getting in on the act with a site which you might think of as Second Life meets Alibaba.

Can you hear me now?

For reference, here are just a few earlier posts which are relevant to this topic:

Smiley Face Savvy (reLink)
Shorting the Factory Future (reLink)
The Big Shift Is Coming (reLink)
True Reverse Product Placement (reLink)
NY Times On Virtual Retail (reLink)

There are more entries, of course, but those should get new readers started.

Original Post: http://blog.rebang.com/?p=1406