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The ultimate emerging market

Michael Jarvis's picture

The boundaries between the real and virtual worlds are fast blurring. Nowhere is this more evident than in the rapid corporate colonization of Second Life. No self-respecting CEO went to Davos without an “avatar” or online alter-ego, a sure sign that Second Life has entered the mainstream. The likes of Reuters, Nissan and Addidas are buying up virtual real-estate and setting up store fronts. Alan Court at the Financial Times reports that IBM has a 1000 of its employees spending time in Second Life. American Apparel hires virtual sales clerks to test new merchandise before it hits stores in the real world. Why the rush online? It is a chance to test new products and strategies (Starwood run a virtual hotel), get marketing buzz, even find new talent. Fortune reports that people have already found real life work based on their performance in Second Life. The virtual “Linden dollars” can also be converted to real cash so the chance to make money is already there. Above all, this represents a fast growing market and a young demographic. There are already around 2 million users. That number is rising fast.

Most coverage has focused on Western brands, but it cannot be long before firms from India or China join them.  Like any emerging market there will be rising competition and new risks. Firms may not be immune from criticism for actions on Second Life (See Christine's blog on virtual sweatshops). How long before there are calls for codes of conduct for virtual activities? Some firms are jumping ahead and aligning cyber ventures with a responsible image, which is why you can visit Mokitown where every kid learns to cross the road safely courtesy of Daimler Chrysler.

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