Luxurious within the metaverse? Morgan Stanley says it might change into a €50 billion market


People are just getting used to the idea that there is even a metaverse – the term used in Silicon Valley for virtual worlds.

Morgan Stanley analysts say there is leeway for luxury goods manufacturers to sell virtually as well as physically – and say the market could be up to 50 billion euros, or $ 57 billion at current exchange rates, by 2030. This could increase sales by more than. increase 10% and industry earnings before interest and taxes by 25%.

Analysts led by Edward Stanley indicate that one in five Roblox players changes their avatar every day. “Image is everything in virtual experiences,” they say.

Balenciaga, a unit of Kering KER, + 2.69%,
In September, “skins” in the popular game Fortnite began selling for $ 1,000 V, which is said to be about $ 8. Gucci, also part of Kering, sold a digital version of its Dionysus bag on Roblox RBLX, + 0.45%, for 350,000 Robux, or about $ 4,100 – which was more expensive than the real bag, which costs $ 3,400.

Social gaming could add anywhere from $ 10 million to $ 20 million to the total addressable luxury goods market.

There is also the market for non-fungible tokens. Dolce & Gabbana sold 9 NFTs for $ 5.7 million, demonstrating the enormous potential for virtual and hybrid luxury goods, according to Morgan Stanley analysts. Digital / hybrid luxury collectibles could be a $ 25 billion segment of a $ 300 billion NFT market by 2030, analysts at Morgan Stanley say.

For the analysts, the big kicker is how much of that revenue goes into profitability. Product unit costs are very low and distribution costs are minimal. For example, the NFT platform OpenSea has a take rate of around 2.5%, compared to 15 to 40% on platforms like Alibaba’s BABA, -0.16% TMall or Farfetch FTCH, -0.99%.
Additionally, smart contracts allow the NFT creator to capture a percentage of the sale price on each sale, as opposed to the physical world where they only get a portion of the original sale.

The analysts say that the soft luxury brands that sell ready-to-wear, leather goods and shoes are better suited to capitalizing on virtual demand than hard luxury brands such as jewelry and watchmakers.

The Stoxx Europe 600 SXXP, + 0.22% rose 0.3% after ending at a record high on Monday, rising four sessions in a row. The index is up 23% this year.

Vodafone Group VOD, + 5.81% shares rose 5% as the European wireless operator raised its profit and cash flow forecast for the full year.

Jeronimo Martins JMT, -11.22% shares fell 11% after holding group Asteck sold their entire 5% stake in the Portuguese grocer.

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