NFTs are turning out to be a major revenue source for businesses

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Non-fungible token (NFT) industry has been undergoing a tough period in 2022, after achieving rapid growth in 2020 and 2021. With market conditions plunging, hacks and scams growing, and the increasing number of low-quality projects, the NFT industry has taken a significant hit over the last two quarters. Even popular projects, such as Bored Ape, have been affected by the market condition with floor prices dropping below US$100,000 in 2022.

While the NFT industry is projected to remain under pressure from the short-term perspective, the hype surrounding NFTs has allowed some of the major iconic brands to rake in millions of dollars through NFT sales. For instance,

• The NFT drops from Nike garnered US$185.3 million in revenue for one of the most iconic brands, with volumes in the secondary markets closing to US$1.3 billion, according to a report from Dune Analytics. By blending virtual experiences with its branding rights, NFTs have turned out to be a major revenue growth driver for Nike. Notably, in December 2021, Nike acquired RTKFT to further expand into the NFT and metaverse ecosystem.
• Along with Nike, some of the other major brands in the fashion industry that have generated huge sales through NFT projects include Dolce & Gabbana, Tiffany, Gucci, and Adidas. While Dolce and Gabbana generated US$25.6 million in revenue from NFT sales, Tiffany which recently launched the NFTiff token raked in US$12.6 million in NFT-related sales. Gucci and Adidas, on the other hand, have been able to generate US$11.6 million and US$10.9 million in NFT sales, respectively.

The hype surrounding NFTs garnered the attention of all of these major and iconic brands, which led them to experiment with the technology to better connect with their consumers and fans. While the hype seems to have faded away over the last few quarters, more and more brands are projected to further deep dive into the new technology as they look to extend the ubiquity of their brands into the virtual worlds. For instance,

• In September 2022, Puma, one of the leading sports brands and competitors of Nike and Adidas, announced the launch of Black Station. Notably, the launch of Black Station is the first attempt by the brand to create a metaverse. Under its futuregrade exhibition, the firm launched limited edition physical sneakers and NFTs during the New York Fashion Week.
• Notably, Black Station is offering Puma customers an engaging and immersive experience alongside digital collectibles. Customers can enter the metaverse to find NFTs and physical sneakers. The launch of Black Station is part of the firm's strategy to compete with Nike and Adidas, which have been able to garner millions of dollars through NFT sales.
• In September 2022, Wrangler Jeans, another well-known consumer-focused brand, announced that the firm had partnered with the NFT project Deadfellaz. Notably, this is not the first time Wrangler Jeans has ventured into NFTs. In February 2022, Wrangler launched an NFT collection, Mr. Wrangler, in collaboration with NFT marketplace LTD.INC and Leon Bridges, the Grammy Award winner.

NFTs have given all of these major brands a way to interact with their consumers and with iconic brands like Nike raking in millions of dollars in additional revenue through NFT sales, TechInsight360 expects more and more brands to foray into the NFT space over the next three to four years, as they seek to supercharge their growth and drive incremental revenue. While the NFT industry is experiencing headwinds amid the rising inflation and interest rates globally, the medium to long-term growth perspective remains strong for the industry. Consequently, TechInsight360 expects all these major brands to further drive innovation in the sector through strategic collaborations and mergers and acquisition deals over the next three to four years.

To know more and gain a deeper understanding of the NFT market in the United States, click here.