Socio-Economic Future of Fashion Industry Report

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Sustainability can be considered not only a trend but also one of the major expectations of customers purchasing products on the international market. The development of the fashion industry without depleting natural resources for the future is an extremely complex process. It is based on the intention to reduce the impact of waste reduction, garment durability, biodegradability, recycling, and recyclability. Taking into account that the fashion industry accounts for approximately 10% of global carbon emissions, this area of business experiences a significant need for sustainability (Razzaq, Ansari, Razzaq and Awan, 2018). In case of inactivity, the environmental impact of the fashion industry will be increasing at a rapid speed annually. At present time, European textile purchases result in a total of 600 kg of CO2 emissions caused by one person (Brydges, Retamal and Hanlon, 2020). Representatives of the fashion industry take appropriate measures to decrease this rate with the help of innovative technologies.

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At the same time, a vast amount of attention is currently paid to the way people rid themselves of clothes. Despite the popularity of sustainability, numerous individuals prefer throwing clothes away instead of donating them to others. In the past 25 years, the amount of clothes bought has increased by 40%, which can be explained by a considerable decrease in prices and open access to different types of products (Shim, Kim and Na, 2018). In turn, over 80% of textile is either incinerated or landfilled, thereby contributing to the development of environmental issues. Hence, in order to minimize the negative impact of this problem on the world, fashion experts encourage people to export used clothes to others with the help of second-hand markets (Moorhouse, 2020). Thus, it is predicted that second-hand markets will become a tremendously popular way to get rid of used clothes.

As the second-largest polluter in the world, the fashion industry also contributes to water pollution. Textile practices frequently produce untreated toxic wastewaters that include lead, mercury, and arsenic (Broega, Jordão and Martins, 2017). People living near textile factories pose a significant threat to their health, which is why the trend of sustainability has become an integral part of the area of fashion. Therefore, to reduce the influence of these factories on the overall health status of the global population, potential customers follow two main recommendations. First, they usually purchase clothes that are made in countries and regions with strict environmental regulations for factories. At the present time, the list of these countries includes the USA, Canada, and European Union. Second, organic fibers and natural fibers are preferred over the traditional textile, as they do not require chemicals to be produced.

The negative environmental impact of the fashion industry on flora and fauna has encouraged customers to avoid non-eco-friendly brands. Around one-half of international brands highlight that clients refuse to purchase clothes made from harmful components (Long and Nasiry, 2019). However, some research studies demonstrate that the percentage of people supporting the trend of environmental sustainability is way higher. One of the research studies highlights that almost 90% of clients seek brands that discriminate against environmental issues caused by the fashion industry (Shafie and Kamis, 2019). The number of sustainable fashion brands increases annually as designers increase the level of awareness of innovative practices. For example, a design company called Vin + Omi produces clothes with the help of plants and chestnuts. Furthermore, this brand has recently introduced a new collection of denim that uses 96% less water for production (Shafie and Kamis, 2019). Subsequently, fashion brains aim to replace traditional methods of clothes production with innovative ones in order to minimize the negative effect on nature.

When it comes to the types of textiles, consumers pay a vast amount of attention to this element. The global population has always perceived cotton as the best material for cloth, which is why it used to be the most frequently used textile in the fashion industry. Nevertheless, with the advancement of information technologies, Internet users got the opportunity to increase knowledge in the context of materials used for the production of clothes. For instance, one pair of jeans requires around one kilogram of cotton. In turn, in order to produce this fiber, almost 10,000 liters of water are needed (Peters, Li and Lenzen, 2021). This amount of fluid is equal to around 10 years of drinking water for one individual. At the present time, to address this problem, cotton producers usually use sprinklers or low-energy precision application systems. Accordingly, innovative tools are widely used to reduce the negative impact on the environment from the perspective of the fashion industry.

Consequently, there are numerous trends related to sustainability in the field of fashion. All these trends can be classified into four main groups according to stakeholders. For example, the primary trends in this area are:

PolicymakersIndustryRetailersConsumers
1. Legislation
2. Regulation
3. Green taxation
4. Tools for better balance and a slower system
5. Policy for extended producer responsibility
1. Prevent waste
2. Invest in pollution-control technology
3. Avoid surplus production
4. Close the material loop
5. Supply-chain transparency
1. New business models to support slower consumption and circular economy
2. New pricing system to consider the environmental impact of a product
1. Extend products use time
2. Conscious consumption
3. Slower consumption

China’s E-commerce and Social Markets

As one of the largest industries in the world, the fashion sector has constantly been evolving. It is predicted that this area of business will be significantly impacted by technological advancement in the future. Moreover, based on the information from a variety of fashion experts, this industry will be associated with the principles of data-driven marketing, sustainability, digitalization, and simplification. When it comes to data-driven marketing, it is essential to note that the general population used to wear whatever designers created. However, taking into consideration that versatile information is currently available in different parts of the world, people have the opportunity to build and follow personal fashion preferences. In turn, they are analyzed by designers in order to meet the expectations of potential customers.

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Lately, China has been improving its image on the international market in terms of economy and social sector. As a result of a mix of different political interventions, this country has become a region with the world’s biggest social media market (Panova et al., 2019). Therefore, in order to have the opportunity to introduce certain products and services on the most popular e-commerce platforms, business owners frequently take into account China’s e-commerce and social markets. The Chinese population is highly engaged with services offered by both domestic and international brands, as the social media landscape is tremendously landscape is multifunctional, diverse, and dynamic in this country (Shen, 2019). In turn, the table listed below provides a comparative analysis of the most popular platforms presented in China, including Jingdong Mall, TMall Global, and Yihaodian (YHD).

Jingdong Mall (JD)TMall GlobalYihaodian (YHD)
Business ModelHypermarket/Online MallOnline MallHypermarket/Online Mall
Market Share22.8%58.6%1.4%
FocusGeneral MerchandiseGeneral MerchandiseFood and Beverage
Estimated Number of users105.2 million (Yuan et al., 2021)350 million (Yu and Cui, 2019)90 million (Wei, Lee and Shen, 2018)
Number of Products40.2 millionOver 1 billion product and service listings8 million
Target ConsumersMainland ChinaMainland ChinaMainland China
Entry Requirement
  • Presence in Mainland China 0-2 years
  • Operations location: Mainland China or abroad
  • Stock location: Mainland China or abroad
  • Presence in Mainland China 0-2 years
  • Operations location:
  • Mainland China or abroad
  • Stock location: Abroad
  • Presence in Mainland China 1+ years
  • Operations location:
  • Mainland China
  • Stock location: Mainland China or abroad
Target MerchantsOverseas companies without Chinese licensesOverseas companies without Chinese licensesChinese and overseas food and beverage exporters
Legal Entity & Tax RegistrationOutside ChinaOutside of ChinaChinese mainland incorporated enterprise
Corporate Bank AccountHome Country Bank AccountHome Country Bank AccountChinese Bank Account
TrademarkAny countryAny countryAny country
Shipment and DeliveryIn house delivery & logisticsOverseas Directly to Chinese consumersIn house delivery & logistics

Considering that China’s e-commerce industry has managed to transform into a global retail channel, numerous types of businesses aim to associate their development with this market. As a result, the local e-commerce retail scale has increased from 1.2 trillion yuan in 2012 to over 5 trillion yuan in 2017 (Wei, Lee and Shen, 2018). When it comes to the fashion industry, it should be analyzed separately from other business fields. In fact, services and products offered by representatives of this business area are linked with a high degree of personalization. In the past decade, the fashion clothes e-commerce market scale has been rising by at least 15% each year (Parker and Wenyu, 2019). A constant increase in the financial resources gained with the help of the fashion industry can be explained by several factors, such as low prices and new online selling platforms.

On the one hand, it is difficult to determine the association between the low prices of fashion products and the high level of profit gained with this kind of business. On the other hand, it is crucial to mention that the primary benefit of e-commerce is based on a unique proportion of customers who are tremendously sensitive towards price (Li, Frederick and Gereffi, 2018). To satisfy the expectations of potential clients, representatives of the fashion industry lower prices, although the quality of offered products is still high. In addition, China’s e-commerce industry is widely known due to new online selling platforms in fashion. For example, Alibaba and JD.com, and Douyin provide the best opportunities for consumers who aim to purchase certain fashion products in a short time and for the lowest prices (Ge, Liu and Ma, 2018). Currently, China’s e-commerce and social markets are used by fashion business owners to meet the needs of the most demanding customers.

Due to the rapid development of China’s e-commerce industry, this country is currently considered one of the main fashion centers in the world. Its image on the international market has encouraged multiple fashion admirers to visit this region with the purpose of exploring the local culture. As a result, it is important to note that China’s e-commerce industry is the primary contributor to the development of tourism.

The Expansion of Artificial Intelligence and Data Intelligence Technology

The modern fashion industry has become a tremendously sustainable area of business lately. This trend has developed due to the fact that the fashion industry is one of the primary contributors to waste and climate change in the world. To address this problem, representatives of this field of business presently use sustainable and eco-friendly production methods. Moreover, digitalization has considerably contributed to the development of online shopping. Accordingly, in order to satisfy the needs of clients, globally known brands improve the process of online shopping with virtual sizing tools, virtual showrooms, and virtual stylists. Finally, in terms of the trend of simplification, it helps save both money and the environment. In fact, simplified collections do not require a vast amount of financial resources and textiles, which is why designers have minimized the number of produced collections in the past years. The combination of different trends makes the fashion industry extremely transparent and sustainable.

With the advancement of innovative technologies, scientists have managed to find the best ways to mimic human cognitive activity. Usually, this goal is alieved with the help of artificial intelligence that is widely known as the simulation of human intelligence in machines (Davenport, Guha, Grewal and Bressgott, 2019). Based on the general image of this kind of intelligence created in social media, machine learning is strongly associated with robots. However, this technology does not always have to be presented in the form of a machine. It can be integrated into a certain system with the purpose of simulating learning, reasoning, and perception (Gu, Gao, Tan and Peng, 2020). This technology is used in a variety of settings, although the areas of healthcare, finances, and fashion benefit from this technological advancement in the first place.

In the context of the fashion industry, artificial intelligence has become an integral part of achieving business goals. The global spending on this technology is predicted to reach more than $7 billion each year by 2022 (Dhar, 2016). In turn, if this technology is ignored, fashion business owners are likely to face considerable issues. For instance, it is assumed that nearly 40% of companies providing services without using machine learning can suffer from bankruptcy in the nearest future (Härkönen, 2020). At the present time, organizations investing financial resources in artificial intelligence have the opportunity to improve the quality of their products and services with the help of apparel designing, manufacturing processes, and virtual merchandising. First, fashion brands integrate artificial learning into their websites with the purpose of finding the best fashion product based on the client’s preferred colors and textures (Wei, 2018). As a result, customer satisfaction levels can be significantly increased.

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Furthermore, the manufacturing process considerably depends on the use of machine learning in the area of fashion. For example, global fashion brands currently use artificial intelligence to identify fast-changing fashion trends (Sohn, Sung, Koo and Kwon, 2020). Accordingly, fashion retailers can manufacture the right supply of the best clothes on the basis of client’s preferences at the moment. Finally, from the perspective of virtual merchandising, machine learning is frequently used to close the gap between online and traditional offline shopping (Liang, Lee and Workman, 2019). For instance, this marketing concept helps fashion brands increase the level of customer engagement from the minute they enter the store. This goal can be achieved with high-quality lighting, color combinations, and articles of decor.

There is a variety of other tools developed by fashion brands on the basis of artificial intelligence. For instance, numerous fashion business owners use chatbots in order to communicate with potential customers and gain information regarding the product of interest (Gu, Gao, Tan and Peng, 2020). In turn, as the largest online commerce company, Alibaba has implemented machine learning to improve the shopping experience. In fact, clients using this platform have the opportunity to take advantage of smart garment tags and intelligent mirrors (Davenport, Guha, Grewal and Bressgott, 2019). In terms of Macy’s, this fashion brand has adopted online shopping assistance that is programmed to respond to basic questions related to products and services offered by this brand. Lastly, Amazon is a widely known technology company that uses machine learning as well. This organization uses artificial intelligence to analyze the design of numerous in-vogue clothes and apply them to appropriate clothing items.

Thus, artificial intelligence and data intelligence technologies are tremendously useful when it comes to the development of business in the area of fashion. Its main advantages for this kind of business are enhanced customer service, improved inventory management, as well as the reduction in returned products. It is predicted that the majority of fashion brands will be using machine learning services on a regular basis in the next several years. It can be explained by the unstoppable development of innovative technologies and constant increase in customer demands related to products and services offered by fashion brands. Considering that shopping has become an extremely individual and intuitive activity, the use of artificial intelligence is likely to improve customer satisfaction. To stimulate business value, fashion business owners tend to invest a vast number of financial resources in this kind of innovative technology.

Reference List

Broega, A., Jordão, C. and Martins, S., 2017. Textile sustainability: reuse of clean waste from the textile and apparel industry. IOP Conference Series: Materials Science and Engineering, 254(2), pp.192-206.

Brydges, T., Retamal, M. and Hanlon, M., 2020. Will COVID-19 support the transition to a more sustainable fashion industry? Sustainability: Science, Practice, and Policy, 16(1), pp.298-308.

Davenport, T., Guha, A., Grewal, D. and Bressgott, T., 2019. How artificial intelligence will change the future of marketing. Journal of the Academy of Marketing Science, 48(1), pp.24-42.

Dhar, V., 2016. The future of artificial intelligence. Big Data, 4(1), pp.5-9.

Gu, X., Gao, F., Tan, M. and Peng, P., 2020. Fashion analysis and understanding with artificial intelligence. Information Processing & Management, 57(5), p.102276.

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Härkönen, H., 2020. Fashion piracy and artificial intelligence: does the new creative environment come with new copyright issues? Journal of Intellectual Property Law & Practice, 15(3), pp.163-172.

Li, F., Frederick, S. and Gereffi, G., 2018. E-commerce and industrial upgrading in the Chinese apparel value chain. Journal of Contemporary Asia, 49(1), pp.24-53.

Liang, Y., Lee, S. and Workman, J., 2019. Implementation of artificial intelligence in fashion: are consumers ready? Clothing and Textiles Research Journal, 38(1), pp.3-18.

Long, X. and Nasiry, J., 2019. Sustainability in the fast fashion industry. SSRN Electronic Journal, 21(3), pp.15-23.

Moorhouse, D., 2020. Making fashion sustainable: waste and collective responsibility. One Earth, 3(1), pp.17-19.

Panova, Y., Tan, A., Hilmola, O., Puvindran, M., Hongsheng, X. and Li, W., 2019. Evaluation of e-commerce location and entry to China: implications on shipping and trade. Journal of Shipping and Trade, 4(1), pp.1-15.

Parker, C. and Wenyu, L., 2019. What influences Chinese fashion retail? Shopping motivations, demographics and spending. Journal of Fashion Marketing and Management: An International Journal, 23(2), pp.158-175.

Peters, G., Li, M. and Lenzen, M., 2021. The need to decelerate fast fashion in a hot climate: a global sustainability perspective on the garment industry. Journal of Cleaner Production, 2(23), pp.126-139.

Razzaq, A., Ansari, N., Razzaq, Z. and Awan, H., 2018. The impact of fashion involvement and pro-environmental attitude on sustainable clothing consumption: the moderating role of Islamic religiosity. Sage Open, 8(2), pp.215-261.

Saponaro, M., Le Gal, D., Gao, M., Guisiano, M. and Maniere, I., 2018. Challenges and opportunities of artificial intelligence in the fashion world. 2018 International Conference on Intelligent and Innovative Computing Applications (ICONIC).

Shafie, S. and Kamis, A., 2019. The sustainability in the Industry of green apparel: are we ready? International Journal of Psychosocial Rehabilitation, 23(4), pp.973-983.

Shen, R., 2019. The comparative history and development of e-commerce in China and the United States. Proceedings of the 2019 3rd International Seminar on Education, Management and Social Sciences (ISEMSS 2019).

Shim, S., Kim, J. and Na, Y., 2018. An exploratory study on up-cycling as the sustainable clothing life at home. Fashion and Textiles, 5(1), pp.1-15.

Sohn, K., Sung, C., Koo, G. and Kwon, O., 2020. Artificial intelligence in the fashion industry: consumer responses to generative adversarial network (GAN) technology. International Journal of Retail & Distribution Management, 49(1), pp.61-80.

Wei, X., 2018. The application and development of artificial intelligence in smart clothing. IOP Conference Series: Materials Science and Engineering, 32(2), pp.12-17.

Wei, Z., Lee, M. and Shen, H., 2018. What drives consumers in China to buy clothing online? Application of the technology acceptance model. Journal of Textiles and Fibrous Materials, 1(34), pp.251-272.

Yu, H. and Cui, L., 2019. China’s e-commerce: empowering rural women? The China Quarterly, 238(2), pp.418-437.

Yuan, Y., Guan, M., Zhou, Z., Kim, S., Cha, M., Jin, D. and Li, Y., 2021. Disruption in Chinese e-commerce during COVID-19. Frontiers in Computer Science, 3(41), pp.33-38.

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