Metaverse is an important milestone for the luxury fashion industry. According to estimates by financial firm JPMorgan, this market could reach $50 billion in sales by 2030.
Metaverse: promising fertile land of high fashion
For many people, the Metaverse (virtual universe) may still be an unfamiliar concept, but in fact, it appeared many years ago and has become the focus of attention in recent times. Metaverse has also been set in famous entertainment movies such as “The Matrix”, and “Ready Player One”… Basically, Metaverse is a virtual world where it is possible to perfectly reproduce real life based on the platform. digitally, people participating in the platform can “live” a second life under an avatar (virtual identity).
With a massive platform invested by technology giants such as Meta, Microsoft, and Google…, Metaverse has become a fertile business ground for many fields, including fashion. Gucci and Balenciaga both launched virtual shows during the Covid period. To meet the need to still shop at home, these brands have also developed a virtual try-on feature.
In fact, Metaverse fashion has been around for a long time under the name “skins” – costumes in 3D games. To date, revenue from Metaverse fashion, for games alone, has reached 40 billion USD per year. Not stopping at games, the virtual universe has now opened up online activities such as learning, fashion shows, organizing events, etc., leading to an increase in demand for virtual costumes to represent. represent yourself on Metaverse. Mark Zuckerberg – president of Meta – once shared: “You will have a virtual wardrobe for different occasions designed by different designers.”
The economy in Metaverse operates around the development of virtual currency in general and NFT (a form of the digital asset) in particular. And although the fashion NFT market is still more modest than that of music, art, and sports, they are on the rise. In the summer of 2021, Ralph Lauren launched its first virtual collection of 50 designs on the Zepeto platform which customers can choose to buy for their avatars. October 2021 marked the success of Dolce & Gabbana when the fashion house launched an NFT product collection consisting of 9 digital designs and collected more than 6 million USD.
In June 2021, Gucci created its first NFT product – a 4-minute film – inspired by the “Aria” collection and auctioned it off with a starting price of $20,000. Previously, this fashion house’s virtual bag Dionysus sold for 350,000 Robux – a digital currency used on the Roblox platform. This amount is equivalent to more than 4,115 USD, more than the value of the bag in real life to 800 USD. Also on the Roblox platform, Nike has created its virtual world – Nikeland – so that users can compete in sports and experience the brand’s products before they are released to the physical market.
Balenciaga joined the Metaverse again in a different form: a partnership with the popular game Fortnite, allowing the game’s characters to wear their coats, armor, shoes, and glasses. Prada, Adidas, and Balmain… are the next names to enter this market, starting with the release of NFT corresponding to the product.
It can be seen that high-end fashion houses are acutely aware that joining Web3 and Metaverse is the right step to take to reach younger customers of Gen Z, creators of trends and game-changers in the virtual universe, as well as potential customers willing to pay for their luxury needs.
Metaverse fashion is said to bring great profits because the cost of materials and labor is almost zero, and the production time is also much shorter than in real life. In addition, brands can generate a new source of revenue from the exclusive release of their archival designs in the virtual universe.
Another reason high fashion brands rush to enter the virtual market lies in authenticity. Because NFTs can be tokenized to establish a recurring revenue stream, it allows brands to earn between 2.5% and 10% commissions on the sale price each time their NFT is traded. In addition, luxury brands can track their items by trading them as NFTs, which in turn allows them to identify counterfeits. Since ownership data is kept in Ethereum (an open-source computing platform based on Blockchain technology), it is difficult to buy or sell counterfeit items in the virtual universe.
The Metaverse playground is becoming more and more bustling when welcoming more big names in the luxury fashion industry. In the Fall of 2022, Hermès laid the groundwork for Web3 access after filing for trademarks covering NFT, cryptocurrency, and Metaverse. After the success of the first NFT product, Gucci launched the limited NFT collection “SuperGucci”, and collaborated with 10KTF in March 2022 to launch the project “Gucci Grail”, a unique collection of The NFT is personalized and crafted by digital artist Wagmi-san. Tiffany & Co. turned the NFT Cryptopunk #3167 icon into real jewelry made of rose gold and gems that went viral last April.
Gala Vrbanic, the founder of the digital fashion business platform Tribute Brand, predicts that in the future “all fashion moments and trends will take place in the virtual world”. In other words, we will gradually express our personal style through avatars in the Metaverse universe instead of in real life.
With a serious strategic investment from high-end brands, joining Metaverse probably won’t be a fad in this billion-dollar industry. Joining Metaverse is also a way to maintain the brand’s legacy, and towards a more sustainable future, where there is no more controversy about the poverty of the textile labor market and the level of costs. Huge for warehouses and warehouses.
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