China’s Fashion Metaverse: Who Is Shaping the Landscape?

Two main factors have driven the most important shifts in China’s fashion market over the last decade: the migration of the population to the mobile internet and the emergence of new communication channels. In the next decade, the rapid advancement of technology is likely to drive further evolution of the digital economy. The combination of the metaverse, creative design and fashion consumption will lead the industry into the next era and likely cause further disruption.

Amid this digital evolution, who is defining the “rules of the game” in the new world of technology? WWD China has been involved in and witnessed a number of fashion metaverse events during the “Golden September and Silver October” period for the industry in China. In this market, the disruptive power of the metaverse is moving from chaos to a new stage.

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In fact, from big data to cloud computing, from blockchain to digital twin, from AR, VR, MR to XR, as well as perceptual interaction, optical microscopic imaging and more, most of the achievements made in the past decade in technological development are reflected in the emerging world represented by the word “metaverse.”

Although international fashion brands from Gucci, Balenciaga and Givenchy to Nike and Vans are at the forefront of exploring the metaverse, Chinese fashion brands such as JNBY and Li Ning are also actively examining the idea despite their late involvement. It must be admitted that, considering what’s likely to be the huge scale of the metaverse in the future, global fashion companies are on a learning curve about the concept. As a result, both Chinese and international brands are to a certain extent still at the same starting line of this new era.

Web 3.0 with Chinese characteristics and Chinese opportunities

While China may have some advantages over the U.S. in building a metaverse platform, the challenges remain daunting.

China has led the world in digital retail penetration over the past decade. Behind this lies an industry conducive to metaverse development. Consumers are extremely dependent on smartphones, and a variety of applications cover clothing, food, housing and transportation, resulting in the generation of massive amounts of data. But at the same time, challenges to rapidly develop the metaverse exist, such as how to use consumer information to generate value while still maintaining data security. For example, how to leverage the decentralization enabled by the metaverse to break down barriers and realize the free flow of data and connection between platforms and applications.

In addition, brands now face moving beyond the sheer hype around the new concept to focus instead on how to implement the technologies themselves. L’Oréal Group has its own way of constructing the metaverse in Paris in terms of the fundamental technology and cross-department communications. But the industrial environment and the maturity of technology in China are very different from Europe and America. As L’Oréal China’s consumer center project leader Lan Tingyuan said, “The prologue of the metaverse is arriving in China though still in the very early stage. In the future, the logic of ‘people, goods and field’ [in other words, customers, product and stores] in the retail field will continue to play a role in the metaverse space.”

The same disparity is reflected in the NFT sector, where the Chinese government has pegged NFT assets to the digital renminbi in a regulatory and supportive manner to create a Web 3.0 with Chinese characteristics. This is to some extent conducive to the development of the fashion metaverse.

In addition, according to Liu Jinyao, co-chairman of the board and group chief executive officer of Activation Group, the pioneer in the field of metaverse marketing, global Web 3.0 revenue in the fashion and luxury industry is expected to reach $50 billion in 2030, and the potential market for luxury groups will expand by about 10 percent. In China alone, the value of digital collections is expected to be around $4.2 billion by 2026.

It is easy to conclude from this that its huge market size is a unique advantage in China’s economic development. With a clear view of the underlying logic of the metaverse and continued efforts around its technologies, China is leveraging the metaverse to breed new opportunities.

How to take the lead over rivalry fashion companies

At the 2022 WDCC, Activation together with luxury brand Shanghai Tang created a Chinese style mood of mountains, rivers, lakes and seas, and water flowing within a metaverse venue called “The Blossoming Flower in Shanghai in the Symbiosis of Real and Virtual.” Human and virtual models were digitally twinned for a fashion show in a simultaneous and synchronized manner at the same venue, which became the first of its kind in the world.

Meanwhile, Shanghai Fashion Week, Xintiandi and China’s top designers collaborated to create a digital fashion show, released in the form of an NFT to be collected and “tried on” by consumers, presenting a preliminary metaverse path within the fashion world. Anta released a complete set of digital works, from digital people to digital fashion and digital scenes, during China International Fashion Week, becoming a pioneer among Chinese brands’ efforts in the metaverse. Li Ning acquired the copyright and secondary creation rights of Bored Ape No. 4102 by buying its NFT and then established the “Bored Ape Club — Li Ning Branch in China.” It plans to launch a series of clothing under this name, offering Chinese consumers an opportunity to have a taste of the metaverse.

As Style3D’s founder Liu Chen said, there is a lot of technology support behind the fashion metaverse. In the current industry, one category is the metaverse of digital fashion and the other is the digital version of fashion. The former is a lay out of the metaverse marketing narrative through metaverse IP, while the latter is a digital way to represent the physical world. The coexistence of the two to create the virtual fashion world is likely to be an ongoing trend.

How can we grasp the trend? Culture and technology are the keys to wining in the market.

Culturally, the setting of the metaverse IP, the construction of the world view and creation of the virtual brand space assets are the foundation for a brand to enter the metaverse. Given that, how is a brand to communicate with both users and partners? The key is cultural resonance, which will enable brands and users to co-create together in the metaverse space.

As Hong Boming, CEO and creative director of K-Boxing Fashion, said: “The rise of Web 3.0 and the metaverse will favor the more contemporary interpretation and expression of Chinese culture. In the future, there will be younger consumers who will pay to buy because of their understanding, exposure and liking of the culture, and the metaverse makes the consumption chain shorter. Relatively introverted [Asian] culture like Chinese culture can be better expressed, applied and passed on through immersive experience in the metaverse.”

Technology is undoubtedly the infrastructure of the metaverse that will enable virtual fashion made by brands in future to be more immersive, personalized and to go to market more quickly. In China, digital creators and technology companies are working together to provide the fashion industry with the tools, scenarios and content to enter the metaverse faster. For example, regarding the “digital infrastructure” of the metaverse, the technology company Style3D does digital simulation, with a domestic flexible body simulation engine, based on the creativity of Chinese designers and the strengths of the textile and garment industry. The firm aims to become the most powerful industrial software in China, helping to empower more designers and further drive the digitalization of the entire fashion sector.

From past experience, it is easy to see that during the rapid development of the digital economy, social media reduced the importance of traditional media channels for consumers and spawned the birth of numerous direct-to-consumer brands. The emerging metaverse will not be spark one single change in the internet age, but rather a combination of the Renaissance and the Industrial Revolution, leading to significant transformation across business, technology, the humanities, science and technology, art and even cultures and lifestyles. In the years ahead, who will seize the opportunities it creates?

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