The Avatar Economy: Why Zepeto Users Spend Big and the Potential for High ROI

6-7 Reading Minutes

Zepeto, the South Korean metaverse platform, isn't just a social network; it's a burgeoning avatar economy. Millions of users, particularly in key demographics across the US and APAC, are flocking to the platform, not just to connect, but to express their unique digital identities through highly customizable avatars. This focus on personalized self-expression translates into a powerful driver of in-app spending, creating a lucrative opportunity for brands to connect with a highly engaged audience and achieve significant ROI.

Avatar Identity: The Engine of Zepeto's Economy

Unlike platforms primarily focused on gaming, Zepeto places avatar identity at its core. Users aren't just playing; they're being – expressing themselves, building social connections, and crafting unique digital personas. This deep investment in their avatars fuels a high purchase frequency of digital goods. As Tom, an account manager at GEEIQ, a data analytics firm partnered with Zepeto, points out, “Zepeto users, especially in the US, make an average of eight item purchases per week. This demonstrates the platform's strength in driving recurring revenue through avatar customization.”

This resonates particularly strongly in APAC, including China, where digital identity and self-expression are deeply ingrained in online culture. Chinese Gen Z, a digitally native and increasingly affluent demographic, are projected to account for 21% of China’s population by 2025. This generation, raised in a digitally connected world, sees virtual platforms as extensions of their real-world identities. Their disposable income, coupled with a desire for unique self-expression, translates into a willingness to invest in their online personas. As a Statista survey from October 2024 shows, a significant portion of Chinese Gen Z have substantial disposable income, with 18% reporting annual household incomes between 189,600 and 322,000 yuan ($26,400 - $44,800 USD) and another 12% reporting incomes above 432,600 yuan ($60,200 USD). This financial capacity, combined with Zepeto’s emphasis on personalized avatars, creates a fertile ground for high spending.

High Fidelity Customization and Brand Integration

Zepeto's high-fidelity graphics engine allows for incredibly detailed avatar customization, a key differentiator compared to other platforms. This detailed 3D layering enables brands to replicate their real-world products with remarkable accuracy, making it a particularly attractive platform for fashion and beauty brands seeking to engage with style-conscious consumers. This is further amplified by the “Guochao” trend in China, where young consumers are increasingly embracing domestic brands and products that reflect their cultural identity. International brands are also leveraging this trend by incorporating Chinese cultural elements into their designs and marketing campaigns on platforms like Little Red Book (Xiaohongshu), a popular social commerce platform among Chinese Gen Z.

Tom explains, "The level of fidelity on Zepeto allows brands to bring their visual identity to the platform in a way that truly resonates with users. This is why we see so many luxury fashion brands entering Zepeto – they can showcase their items in a high-fidelity environment that aligns with their brand image." This translates into a stronger connection between the brand and the user, driving both engagement and purchase intent.

Data-Driven ROI and Future Growth

GEEIQ's partnership with Zepeto empowers brands with crucial data insights into user behaviour, spending habits, and item popularity. This data transparency is essential for measuring ROI and optimizing brand activations. Brands can track metrics such as likes, favourites, views, content creation, item sales, and try-ons, providing a granular understanding of their performance and user engagement. As Tom emphasizes, "This data visibility allows brands to move beyond simple brand awareness campaigns and into performance marketing, demonstrating tangible returns on their investment."

The combination of Zepeto's focus on avatar identity, high-fidelity customization, and data-driven insights positions the platform for significant growth in 2025 and beyond. The increasing purchasing power of Gen Z, particularly in China, combined with their desire for personalized digital experiences, creates a strong tailwind for Zepeto’s avatar economy. Brands that recognize this potential and develop strategies that authentically integrate with Zepeto’s unique environment stand to gain significant ROI and build lasting connections with a highly valuable consumer demographic. The future of brand engagement lies in understanding and embracing the power of digital identity, and Zepeto is at the forefront of this revolution.