Meta may end up losing out in the metaverse game it has tried to develop. Meta (Facebook) has famously been investing heavily in developing a strategy for the nebulous “Metaverse”. The company reportedly spent over US$10.4bn, in the four quarters between October 2021 and September 2022. CEO, Mark  Zuckerberg indicated that 40% of that spend has been towards developing its VR headsets and related business, 40% on developing new AR headsets and related business and a remaining 10%, or US$1bn on the company’s “metaverse” social media platform “Horizon Worlds”.

Despite the heavy media coverage, particularly in the US, and large investment, the platform has only achieved around 200,000 monthly active users (MAU) as of September 2022.  These figures stand in stark contrast to a pair of platforms launched by South Korean companies Naver and SK Telecom.

South Korea forging ahead in the ‘metaverse’

Naver, the South Korean company behind Japan, Thailand and Taiwan’s leading OTT messaging client Line, and South Korea’s leading web portal Naver.com, launched its own entry into the “metaverse” social media ring in 2018 with a platform called “ZEPETO.”  Like “Horizon Worlds,” “ZEPETO” offers users a space to create digital avatars, meet and chat in different virtual worlds and engage with brands and content online.  However, in contrast to Meta’s platform Naver’s Zepeto has attracted a massive user base.  The application has been downloaded more than 300 million times with monthly active users (MAU)  peaking at over 20 million.  ZEPETO is not just popular in South Korea with 95% of users coming from international markets, with China, Japan and US leading international users.

Compatriot company  SK Telecom, the leading mobile operator in South Korea has also entered the “metaverse” social media platform space with “Ifland.”  The platform with similar features to Naver and Meta’s has risen to become South Korea’s leading “metaverse” social playground with over 12.8 million downloads in the country and 2.6 MAU.  Ifland is also set to take off internationally, with SK Telecom announcing the platform will launch in 45 markets with English, Chinese and Japanese language support on November 23, 2022.

Meta has been outpaced

Despite Meta having MAU of over 3 billion across Facebook, Instagram and Whatsapp it has been outpaced by Naver, and SK Telecom which have considerably fewer users from their affiliated services.  However, Meta is not only being beat in terms of users, but also in terms of attracting creators, and brand affiliates.  ZEPETO has created multiple routes to monetization with a creator marketplace, live events and co-branding digital content with some of the world’s largest brands ZEPETO has a creator tool where digital artists can create virtual environments and items for users avatars and then sell those in a marketplace.  As of June 2022,   registered creators total 2.6 million with total transactions worth KRW 30 billion (US$23 million).Further it offers live events where users can interact digitally with some of the largest K-Pop celebrities, including those from JYP Entertainment like BLACKPINK.

Beyond this, the company already has brand deals with leading lifestyle brands like BVLGARI, Gucci, Ralph Lauren, Samsung and NIKE where users can purchase digital versions of real-world items or engage with products digital for a new form of advertising.   For example Samsung launched “My House” in on 28 December 2021, a virtual space within Zepeto allowing users to preview and customize digital copies of Samsung products within the app, and within one month, had gained more than 4 million unique visitors, displaying the apps potential as a marketing tool. Similarly, SK Telecom’s Ifland offers live K-Pop events and is working with Denmark’s Birger Christensen on online-offline branding.  While Meta offers similar tools and has sponsored events with Western Artists it has not attracted nearly the same amount of brand deals or interest in virtual marketplaces.

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Opportunities to expand

Both Naver and SK Telecom are exploring further opportunities to partners and expand their platforms beyond K-pop and fashion deals. SK Telecom is working with Etisalat and Singtel to promote Ifland content to their mobile customer user base and even has deals in place with Bansomdejchaopraya Rajabhat University (BSRU) in Thailand and Korea’s Dong-ah Institute of Media and Arts (DIMA) to promote a digital campus for design students. 

Meanwhile Naver is partnering with mobile operator True in Thailand to promote digital creators in the country. Meta has not developed the same engaged ecosystem of partners.  In fact, in a recent Webinar from GlobalData Technology on the connected future, the firm’s data sets tracking public mentions of the term “metaverse”, showed that Facebook’s Meta does not even crack the top ten. As platforms like Zepeto and Ifland continue to gain momentum and international users,  Meta is will be on the outside looking in at the digital economy it tried to create.