Digital Fashion: The Next Explosion Point in the Metaverse Track

Original Title: "The Next Trillion-Dollar Opportunity in the Metaverse"

Original Authors: Songyu.eth, Jiacheng, Bixin Ventures

In Hans Christian Andersen's 1837 fairy tale "The Emperor's New Clothes," a story is told of an emperor who is fooled by two swindlers into wearing an invisible—actually non-existent—new outfit, parading naked in a grand ceremony. This emperor also became the first victim of Virtue Fashion. Fast forward to 2022, with just a smartphone, you can not only see a non-existent piece of clothing but also wear it through AR technology.

What is Digital Fashion

While you may not usually pay attention to fashion trends, you have likely consumed Digital Fashion. If you have purchased skins in games like Honor of Kings or LOL, congratulations, you are also a fashionista!

Digital Fashion is not limited to Paris Fashion Week but spreads to every corner of the metaverse. Digital Fashion is mainly divided into two categories:

• On Real Life (ORL): Worn by people.

• Un Real Life (URL): Worn by virtual characters (skins).

ORL and URL

2. Technological Development and Fashion

The evolution of fashion has always been closely linked to technological development. Let's start by recalling the first crisis humanity faced after the birth of computers.

In 1999, humanity faced a global computer bug known as the Y2K bug. The Y2K bug was a computer program malfunction where systems crashed due to their inability to process dates crossing into the new millennium. Computers would interpret the year 2000 as 1900, causing chaos in electronic systems across various industries. At that time, human life had greatly enjoyed the conveniences brought by computers and the internet. The unpredictable future filled people with imagination and a sense of crisis, giving birth to Y2K aesthetics.

Y2K (Y-year, 2K-2000) design style often used metallic materials, transparent PVC, and fluorescent colors to depict high technology. This was people's imagination of an extremely information-rich and highly technological world. If you watched "Happy Planet" as a child, you would find that their clothing embodies the Y2K style.

Twenty years later, the Y2K bug has long been resolved, but the Y2K style continues to this day. For example, the costumes in the theme song "Priceless Sister" from "Sisters Who Make Waves," and the clothing worn by the so-called subcultural youth, are all continuations of the Y2K style.

Y2K Fashion in "Happy Planet"

In 2018, a Brazilian-Spanish mixed-race girl named Lil Miquela, who has 3 million followers on Instagram, became a new darling of the fashion world. She managed the Instagram account for the Prada AW18 show and collaborated with many big brands, even being included in TIME's list of the most influential people on the internet alongside Trump and Rihanna.

Public information shows she is a mixed-race girl from LA, a model, and a singer who has released her own single "Not Mine." However, she is not a flesh-and-blood person but a computer-generated image (CGI).

Instagram: Lil Miquela

High technology often signifies high value, advancement, and civilization, attracting the attention of fashion brands.

3. Entering the Game

In the past two years, due to the impact of the COVID-19 pandemic, countless people have been forced to stay at home, spending their time in the virtual world, accelerating the pace of fashion digitization. In October 2021, after Zuckerberg announced the company's rebranding to Meta, many people heard about the metaverse for the first time. Fashion quickly became a topic in the metaverse, with major companies entering the scene.

On Meta's official Twitter, "Hey @Balenciaga, what's the dress code in the metaverse?"

Sports Brands:

Nike entered the world's largest multiplayer online creation game Roblox, launching the virtual world "NikeLand," where players can use special Nike products to customize their characters, such as classic shoe models like Air Force 1 and Nike Blazer.

In 2021, Nike spent an estimated $200 million to acquire the virtual sneaker company RTFKT. Since the announcement of the acquisition, the floor price of the NFT CLONE X series released by RTFKT has skyrocketed from 2 ETH to 16 ETH.

Adidas purchased a space consisting of 144 plots of land in The Sandbox in November 2021. Users who purchased Adidas Originals series NFTs could gain exclusive access to products, including virtual wearables and physical products like hoodies and sportswear.

On December 2, 2021, Adidas announced its "Leap into" the Metaverse, a collaboration with Bored Ape Yacht Club, gmoney NFT, and PUNKS Comic. At the same time, Adidas released its first NFT series "into the Metaverse," a "new species of technology" that combines future concepts, art, and trends.

Inspired by the flashy dance "WOTAYI," the NFT series primarily comes from collaborations with IPs and brands in the metaverse, including NFT pioneers Bored Ape Yacht Club, gmoney, and the team behind PUNKS Comic. The series consists of 29,620 NFTs, which sold out quickly at a price of 0.2E, generating approximately $22 million in sales.

Luxury Giants:

As early as three or four years ago, Gucci began laying out its virtual world, providing virtual clothing and accessories for The Sims and Pokémon Go. In March 2021, Gucci collaborated with tech company Wanna to sell virtual sneakers on a virtual app.

These sneakers, named Gucci Virtual 25, were priced at only $12. A four-minute microfilm titled "Aria," traded on Christie's platform in April, ultimately sold for $25,000. The auction proceeds were donated to the United Nations Foundation.

Gucci's parent company, Kering, had already begun laying out blockchain technology in previous years. Utilizing full traceability and other technologies, it continuously expands the new landscape of luxury goods and technology integration. Kering has long used AR (augmented reality technology) for product display and sales and has even sold a famous $12 virtual shoe.

As a pioneer of collaboration between the fashion industry and the metaverse, Balenciaga collaborated with Fortnite in 2021, launching several t-shirts, sweatshirts, hoodies, shirts, leather jackets, and baseball caps in the game. Subsequently, Balenciaga also collaborated with Epic Games to create the game Afterworld, presenting their fall fashion show in game form, where every character wore Balenciaga clothing.

In May 2021, RIMOWA announced on Instagram its collaboration with NUOVA design studio to launch four NFT artworks, named "Blueprints from the Metaverse."

In August 2021, Burberry collaborated with Mythical Games' popular blockchain game Blankos Block Party to add a character wearing Burberry TB pattern to the game.

In August 2021, Louis Vuitton launched a free mobile game "Louis The Game" to commemorate the 200th anniversary of its founder Louis Vuitton's birth, encouraging players to learn about the brand's history through the game.

LV included 30 NFTs in "Louis The Game," with 10 created by digital artist Beeple. It is estimated that these 30 NFTs are valued between $20,000 and $20 million. As for how to obtain them, LV stated that during gameplay, NFTs would be given to lucky players through a fixed-period lottery.

In October 2021, Jimmy Choo collaborated with artist Eric Haze and fashion designer Poggy to launch an NFT sneaker, marking the brand's first NFT release.

GIVENCHY:

In June, Givenchy launched its first NFT virtual artwork. This series was created in collaboration with Givenchy, London gallery owner Amar Singh, and artists from Rewind Collective, featuring animated portraits. The NFT series was set to be sold on the VeVe platform from June 21 to 26, limited to 1,952 pieces, with proceeds supporting the LGBTQIA+ community.

In November, Givenchy's creative director Matthew M. Williams collaborated with artist Chito to launch 15 NFT artworks. The works, filled with spray paint and dog head imagery, are rich in street style, and all proceeds will ultimately be used to protect marine ecological cleanliness.

The "Chito x Givenchy NFT" series features a range of cartoon characters and symbols, some animated and others bearing Givenchy's logo. The series will be released on the NFT market OpenSea on November 23. A week later, the highest bidder will receive their NFT.

Valentino showcased four digital blockchain artworks by artist Matthew Stone in its Episode SoHo store in New York City, and concurrently held an NFT exhibition of Stone's works in a residence in Rome.

Dolce & Gabbana announced the launch of its first NFT series. This NFT series, named "Collezione Genesi," is inspired by the city of Venice.

According to reports, the Collezione Genesi series will appear at three of D&G's events: Alta Moda (high fashion or haute couture), Alta Sartoria (high formal wear), and Alta Gioielleria (high/ fine jewelry), held in Venice on August 28, August 29, and August 30, respectively. Collezione Genesi will go on sale starting September 1.

4. Human-Centric

"These big companies don't understand the Metaverse at all; they're just experiencing FOMO. Clothes have no other use besides looking good."

"The metaverse is still in its early stages; we need to build first before focusing on clothing."

"Fashion is a niche track; currently, the daily active users on metaverse platforms are too low."

You might easily generate the above three questions. These three questions need to be answered from the perspectives of Digital Fashion users and designers (creators).

Firstly, with the help of AR technology, ORL has already achieved wearable clothing. For example, Snapchat in 2021 allowed users to try on different Prada bags in the app and take photos. Even earlier, Snapchat collaborated with Gucci to launch AR shoe fitting.

Snapchat's AR fitting

Virtual fashion has officially entered the real world, wearing a Buba gown designed by Tribute Brand, full of digital age characteristics.

The main users of Digital Fashion are two groups:

- Fashion Bloggers/Content Creators: Those who can earn money through traffic.

Digital Fashion provides these fashion KOLs with a new display tool while saving costs. Compared to buying clothes, bags, and jewelry to unbox and showcase to fans, Digital Fashion allows them to save on content production costs and reduce production expenses. They can also promote products through Digital Fashion before the official release of new items.

- Social Media Influencers: Those who want to buy brands but cannot afford high prices.

Want to carry a Hermès bag for a photo but can't afford $50,000? Instead of pooling with others to buy a bag or purchasing a counterfeit from a WeChat seller, why not choose a Digital version? Worried about matching bags? No problem, you can pool together to buy a rare 1/1 NFT.

Digital Fashion provides designers with:

- Mass Production

The runway at fashion weeks is the impression most people have of fashion. We often see very avant-garde, bold, and impractical clothing designed solely for fashion week.

In fact, only 10% of the clothing showcased at a fashion week goes into production because most of these garments are designed solely for the runway. However, whether ORL or URL, these designs can now be "worn" and mass-produced (ERC-1155), reaching consumers.

- Copyright Protection for Clothing Works

Protecting the copyright of clothing creators is exceptionally difficult; most garments can be easily copied, but pursuing each infringement is challenging and costly, severely dampening creators' enthusiasm. NFTs, based on blockchain technology, can provide products with a unique "identity card," allowing designers to protect their rights.

- No Waste, No Shipping; Any Size, Any Gender

NFTs allow fashion designers to no longer be constrained by fabric, craftsmanship, and functionality; they can let digital serve creativity, enabling freer, bolder, and more imaginative creations. For brands, creating NFTs not only reduces environmental pollution during production but also helps mitigate overproduction issues.

From the perspective of Digital Fashion usage, Fashion is not a niche track in the metaverse. Clothing products under the ORL category do not rely on a specific metaverse platform to provide services to users. In the future, your photo editing app may store many NFTs, providing you with the convenience of changing outfits at any time.

Additionally, according to a survey by Vice of 3,000 respondents, 47% of those interested in Digital Fashion are non-crypto users. 70% of people stated they purchase items to enhance their digital identity, express themselves, or own unique items, just like in the real world.

Digital Fashion can create a more equitable space and experience for plus-size consumers, people with disabilities, and the LGBTQI+ community, allowing individuals to explore new identity models unbound by traditional roles, expectations, and limitations.

Currently, gaming is the primary consumption venue for Digital Fashion, with 62% of surveyed American consumers having purchased virtual items. The best-selling Digital Fashion products in Roblox are casual wear, such as t-shirts and masks.

According to Roblox's VP Wootton, "Some people choose to reflect their everyday appearance and clothing in real life, while others want to try bold looks and styles they wouldn't adopt in the real world." The rainbow flame halo top was also among last year's top ten bestsellers.

In 2021, NFT consumption reached $41 billion, and as people's recognition of the value of digital identity continues to grow, it is expected that in the next five years, you—the you in games, the you in Zoom, the you on social platforms—will all wear Digital Fashion. Digital Fashion could reach a scale equivalent to the current global clothing market of $1 trillion.

5. Finally, a Little FOMO (Related Financing Information)

RTFKT: Acquired by Nike in 2021 for an estimated $20M. Not much more to say about this.

Space Runner: A metaverse wearable fashion brand, products can be worn in both the metaverse and reality. Space Runners launched the first NBA Champions Sneaker Collection in December last year with former NBA champions Kyle Kuzma and Nick Young. In March 2022, Space Runners announced it had completed a $10 million seed round financing led by Polychain and Pantera Capital, with participation from Accel, Jump Crypto, Animoca Brands executive chairman and co-founder Yat Siu, Twitch co-founder Justin Kan, and others.

UNXD: A metaverse fashion company currently building a B2B2C platform while also creating its own NFT collections and NFT marketplace. In March 2022, it raised $4 million in seed funding from Animoca Brands, Polygon Studios, and Red DAO.

DressX: An American virtual fashion platform founded in August 2020, which has collaborated with numerous designers and brands to allow them to create and trade various virtual fashion products on its platform. It completed a $3 million seed round financing in July and September 2021.

Red DAO: A DAO focused on investing in Digital Fashion. It raised 3,700E, approximately $12M at the time.

SandStorm: SandStorm provides construction services for top global brands and brings builders together. In March 2022, it completed a seed round financing of $2.5M. Major investors include The Sandbox, Sanctor Capital, Fenbushi Capital; angel investors include The Sandbox co-founder and COO Sebastien Borget, among others.

6. What's Next:

Stay tuned for Decentraland Metaverse Fashion Week next week.