What are some good ways to start a Web3 business in China? (Part 3)
Exploring the opportunities and challenges in China's Web3 entrepreneurial landscape, including innovative strategies, regulatory considerations, and success stories to help aspiring entrepreneurs find the right path forward.

Digital collectibles, everyone is probably familiar with them. Before 2021, domestic users called them NFTs; after 2021, they are called digital collectibles domestically.

Rewinding to March 2021, Beeple’s digital artwork sold at Christie’s auction house for $69 million, marking the first time the global market truly saw the value of NFTs, and turning this narrative into a new focus beyond crypto assets.

This wave of enthusiasm quickly spread to China. Starting in the second half of 2021, major domestic companies began testing the waters: Tencent launched “Huanhe” in August 2021; under the AntChain ecosystem, digital collectible services had already started to develop and gradually formed the “Jingtan” brand; JD.com launched “Lingxi” at the end of 2021. Subsequently, in the first half of 2022, numerous small and medium platforms flooded into the industry, accelerating its expansion. According to industry data, by June 2022, the number of platforms related to NFTs/digital collectibles in China had increased approximately fivefold from the beginning of the year, with over 500 active platforms.

However, as the market surged, platform narratives began to contract. For example, the term “NFT” gradually was replaced by “digital collectibles” in public communication, and expressions of secondary trading and financialization started to be deliberately downplayed. This shift became more evident in the second half of 2022. Leading platforms like Tencent Huanhe announced in August 2022 that they would cease issuing digital collectibles and initiate refunds, signaling a rapid industry cleanup. Many platforms relying on secondary premiums and speculative emotions withdrew, and the first cycle of digital collectibles—lasting nearly two years—shifted from frenzy to contraction.

Today, looking back at the domestic digital collectibles market, it has gone through a cycle of rapid growth and cleanup. Most “storytelling through trading” models have proven unviable, with even limited room for continued existence. Logically, this sector seems to have come to an end.

But why does Portal Labs believe that digital collectibles are still a good path for Web3 startups in China? You might want to read on.

Policy Space Still Exists

One core reason why digital collectibles remain worth discussing in China is that policies have not outright negated their existence. What regulators truly suppress are the pathways that use digital collectibles as a guise for financial speculation. In other words, domestically, digital collectibles are not a completely closed-off sector; a clear boundary has been defined.

This boundary is very clear: no financialization, no securitization, no trading.

Since 2022, regulators have repeatedly issued warnings about the risks of NFT-related speculation. In April 2022, the China Internet Finance Association, China Banking Association, and China Securities Association jointly issued a proposal explicitly opposing the financialization and securitization of NFTs, emphasizing the need to prevent secondary market hype, illegal fundraising, and other risks. This almost became a policy watershed for the domestic digital collectibles industry.

Against this backdrop, the concept of “digital collectibles” has gradually replaced “NFT,” becoming a more localized and compliant expression. Platforms no longer emphasize asset trading but focus on the collection attributes and cultural value of digital content. Many issuers also actively avoid secondary circulation, downplay price narratives, and instead embed digital collectibles into cultural, brand, and tourism scenarios that are safer.

From a policy perspective, this “de-financialization of digital assets” still leaves room for development. When digital collectibles are integrated into cultural dissemination, copyright confirmation, and brand membership applications, they resemble digital credential tools rather than investment targets. Many domestic digital collectible projects continue to exist precisely because they have completed this strategic shift.

A more pragmatic point is that China does not lack policy support for the digital cultural industry. Whether it’s digital tourism or cultural consumption upgrades, the regulatory encouragement has always been directed toward “content industry” and “digital creativity.” Only by returning to this framework can digital collectibles become a sustainable Web3 entrepreneurial path.

Therefore, whether digital collectibles can succeed in China depends less on technology and more on which side you stand on. Standing on the trading side, it’s inevitably a high-pressure zone; but from the perspective of cultural content and brand operation, it could become one of the few compliant and implementable Web3 entry points.

Industry Has Already Cleared Out

If policies have drawn boundaries, the market itself has undergone a more brutal screening. The first cycle of digital collectibles in China was not a “gradual cooling,” but a rapid cleanup. The platform expansion from 2021 to 2022 was almost explosive, but the subsequent contraction was equally swift. Many projects relying on secondary premiums, speculation, and gray-area transactions, under the dual pressure of regulation and market retreat, left little room for survival.

After 2022, the industry’s structure changed significantly. The most crowded segment—issuance-driven hype and collectibles as assets—was essentially cleared out. The remaining platforms and projects now show more consistent features: low trading activity, content-focused, weak financialization, strong operational emphasis. They no longer try to replicate the free circulation logic of overseas NFT markets but instead consolidate digital collectibles as digital cultural products and brand tools.

This signifies an important shift: the “startup difficulty” of digital collectibles in China has moved from “can it be issued” to “can it be operated sustainably.” In the first cycle, many teams’ core skills were packaging, launching, and creating scarcity. But after cleanup, the market no longer rewards this model. The ones that can truly survive are those with content supply, channel cooperation, and long-term operational capabilities.

“Content supply” here doesn’t mean just making a random image, but whether they can continuously obtain licensed, IP-backed, culturally valuable content sources. For example, platforms like TheOne.Art are closer to digital art e-commerce: they acquire authorized works through partnerships with artists and copyright owners, then conduct limited editions and series-based operations around these works. They don’t sell “on-chain assets,” but rather a source-backed, copyright-verified, continuously supplied digital content system.

“Channel cooperation” isn’t just about social media promotion; it’s whether digital collectibles can be embedded into real consumption scenarios. Many sustainable practices in China happen within cultural institutions and brand ecosystems. For instance, museums and scenic spots issuing cultural relic-themed digital collectibles as part of cultural dissemination and souvenir consumption, rather than as freely tradable assets. Similarly, brands like Starbucks promoting NFT membership systems overseas show that the real value of digital collectibles often comes from membership benefits and consumption ecosystems, not secondary market pricing.

“Long-term operational ability” is the core dividing line for domestic digital collectible platforms. Issuance is just the beginning; platforms must answer: why will users stay? How are rights and benefits realized? How to sustain activities? Many projects fail not because they can’t sell, but because after selling, there’s no next step—collectibles become static images, and users naturally churn. For example, People’s Daily’s “Lingjing·People’s Art Museum” emphasizes the cultural dissemination aspect, collaborating with artists, curating themes, and content columns to create ongoing content rhythm, rather than one-time sales. Similarly, Xinhua News Agency has launched digital collectibles linked to public welfare, embedding them into public narratives and brand activities, making them more like long-term cultural projects rather than trading assets. In tourism scenarios, some museums and scenic spots continue their digital collectible practices by linking them with exhibitions, commemorative tickets, and offline events, so that users hold not just an image but a cultural participation record. These operational models are closer to cultural and creative products than to encrypted assets.

Because of this, platforms that continue to operate today often resemble “content consumption platforms” more than “asset trading markets”: they acquire content through IP collaborations, complete sales via limited editions, and maintain user engagement through membership activities and rights design, rather than relying on secondary market price appreciation. This model may seem “less Web3,” but it is precisely why it can survive long-term domestically. The real sustainable path for digital collectibles in China is platform-based operation, not financialization narratives.

Genuine Demand Exists

Do digital collectibles have real demand? If they are merely a “compliant concept” with no willing buyers, they cannot become a Web3 entrepreneurial path.

The answer is yes, especially in cultural and tourism sectors.

As a country with a 5,000-year-old history and rich cultural assets, China is not short of content resources. However, cultural institutions have long faced the challenge: how to turn cultural content into products that can be disseminated, consumed, and accumulated. Digital collectibles provide a new form of digital souvenirs. They can extend exhibitions and become part of tourism consumption. For many institutions, this model is lighter, easier to spread, and more aligned with young users’ digital consumption habits.

Beyond that, the real commercial opportunity for digital collectibles in China largely comes from brand-side “user operation needs.” Consumer brands are constantly seeking new membership carriers: they need to create a sense of identity, rarity, and long-term engagement. Digital collectibles here act more like digital membership credentials than one-time sold images. Brands are not short of budgets; what they lack is a sustainable membership tool. If digital collectibles can be linked with points, activities, and rights exchanges, they can become part of the brand’s operational ecosystem, not just isolated on-chain assets.

More importantly, this demand has a clear B2B nature. Cultural institutions need digital content solutions; brands need membership and marketing tools; platforms provide issuance, rights confirmation, operation, and technical services. The entire value chain’s payment logic comes from the content and consumer industries, not from speculative secondary market funds.

This is the most critical practical significance of digital collectibles in the Chinese context: the buyers are not “investors,” but “content creators” and “brand owners.” Its value lies not in price appreciation but in whether it can serve as a digital infrastructure for cultural consumption and brand operation.

The Biggest Resistance: User Perception Still Stuck on “Financial Speculation”

Even with policy space and genuine demand, digital collectibles in China still face an unavoidable obstacle: user perception.

Digital collectibles, or Web3 as a whole, carry a heavy “historical baggage” in China. The market expansion from 2021 to 2022 was essentially not a “cultural digitization experiment,” but more like an asset speculation wrapped in content. Many users’ first contact with digital collectibles was not because they carried cultural rights or membership identities, but because they wondered: “Will it go up?” This path, while generating short-term hype, almost inevitably led to trust collapse later.

Therefore, the biggest challenge today is that many still see digital collectibles as “NFTs,” as a form of truncated speculation, rather than a new digital credential tool. This misperception directly affects project operation: users are unwilling to pay for content or stay for rights; they only care about secondary markets and appreciation potential. Once users treat digital collectibles as “speculative assets,” brands find it hard to sustain investment, as it quickly drifts into regulatory sensitive areas and deviates from brand operation goals.

A more practical issue is that the value assignment mechanism for digital collectibles in China has not fully matured. Many projects are stuck at the “issue and end” stage: releasing a picture, doing a sale, completing marketing, then no follow-up. Users only get a static asset—no tradability, no rights, no ongoing participation. As a result, users revert to the fundamental question: if it can’t appreciate, what is it worth? Why should I buy it?

This is a critical turning point for digital collectible entrepreneurs. In the first cycle, many relied on emotion and scarcity to drive trading; in the second, only those with rights structures, scene embedding, and long-term operation can redefine value and survive.

Dual Challenges: Membership Systems and On-Chain Transparency

Brand-side issues are even more tangible: can digital collectibles be integrated into long-term operational systems?

Over the past few years, many brands have experimented with NFTs or digital collectibles. Starbucks explored NFT-based membership systems; luxury brands launched digital collectible collaborations; many domestic brands also tested marketing nodes. But a common phenomenon is: after the first issuance, there’s no follow-up. Because they are stuck on “how to use after issuance.”

What brands truly need is a membership tool. The core of a membership system isn’t issuance but operation: levels, rights, points, repurchase, activity engagement. These must form a closed loop. But in many projects, digital collectibles are just one-time souvenirs, lacking ongoing rights design. Brands find it hard to answer: what does holding it mean? Besides “I bought it,” what long-term value does it bring?

When digital collectibles cannot be embedded into membership systems, they remain at the marketing gimmick level. One-time issuance can generate buzz, but repeated issuance becomes a cycle of repetition, even causing user skepticism. That’s why many brands give up after trying—they lack a sustainable operational framework.

Deeper concerns come from the transparency of on-chain data, which can be a business sensitive issue.

In the Web3 context, on-chain transparency is an advantage because it’s verifiable and traceable. But in brand operations, it can become a burden. If membership structures, user behaviors, and consumption preferences are all exposed on the chain, competitors can analyze the brand’s user profiles and strategies. For traditional brands, this “public membership” is not inherently safe.

Therefore, for digital collectibles to become a long-term tool, they must help brands truly embed them into membership systems and provide controllable tools within compliance and privacy boundaries.

What Is the Web3 Startup Entry Point for Digital Collectibles?

In summary, the viable Web3 startup entry point for digital collectibles in China should revolve around content, brands, and scenarios, providing sustainable infrastructure and service capabilities.

The first is digital issuance services for cultural tourism and cultural content.

China’s cultural assets are extremely rich, but cultural institutions lack digital product capabilities. The value of digital collectibles here is not financial trading but serving as digital souvenirs, cultural dissemination carriers, and content consumption products. If startups can offer a complete set of tools—from copyright confirmation and content packaging to issuance and operation—they can find stable demand within the long-term trend of digital tourism and cultural digitization.

The second is digital credentialization of brand membership systems.

What brands truly lack is not “NFT hype,” but sustainable membership operation tools. If digital collectibles can be linked with points, activities, levels, and rights exchanges, they can become a new type of membership identity carrier. Startup opportunities lie in helping brands design rights structures and providing controllable digital credential systems, rather than just selling images.

The third is enterprise-level digital collectible infrastructure on alliance or permissioned chains.

Public chains’ transparency is not naturally suitable for domestic brands. Many enterprises need an auditable, traceable, yet controllable and isolatable digital credential system. This means startups can provide underlying capabilities for “compliant credentialing”: permission management, privacy isolation, user data protection, and integration with existing CRM systems.

The fourth is digital collectible operation service providers.

After cleanup, the competition is no longer “who can issue,” but “who can operate.” Many cultural institutions and brands are not short of distribution channels but lack operational methodologies: how to produce serialized content, design rights, retain users, and turn digital collectibles into long-term projects. Startups can act as service providers, earning revenue through project-based and long-term service fees, rather than pursuing high-risk assetization.

Digital Collectible Startup Action Checklist

The opportunity for digital collectibles in China is not over; it has simply shifted its core to operation and integration. This path will not return to the frenzy of 2021, nor will it generate quick profits easily. But under clear policy boundaries and genuine demand, it might become one of the few Web3 entry points that remain compliant and capable of generating long-term cash flow.

If you consider digital collectibles as a Web3 startup path in China, your team must answer several very practical questions beforehand:

1. Where does your content come from? Do you have stable copyright and IP supply?

2. Who is your paying customer? Cultural institutions or brand budgets?

3. How will your product be operated? How are rights and benefits realized after issuance?

4. Where are your compliance boundaries? Have you completely avoided trading and financialization?

5. Can you provide long-term services rather than one-time sales?

Digital collectibles are not a quick-money track. On the contrary, if you truly want to make it a startup path, these challenges must be acknowledged and addressed one by one. Although this route is indeed one of the few legally survivable directions in China’s Web3 space, it is not easy, nor suitable for entering with the expectation of “a quick boost.” You need to be more cautious and adopt a long-term mindset. Treat it as a content and operation business that requires deep cultivation, not a market opportunity to be exploited through emotion and cycle arbitrage.