The global AI in fashion market size is expected to grow from USD 249 million in 2019 to USD 1.3 billion in 2029 at a compound annual growth rate (CAGR) of 21% in the forecast period.
The global AI in the fashion market is a groundbreaking amalgamation of artificial intelligence and the apparel industry seeking to present tailored insights to consumers to boost revenue. Besides, AI in e-commerce firms has improved the accuracy and customer experience by enhancing the customer query process. Some of the advantages include correctly estimating product demand while eliminating surplus and unsold inventory costs. Intelligent digital assistants are used to prescribe garments to consumers depending on their height, weight, form, and current style. Customers would then be given precise measurements depending on the information they have entered into the system. Thus, the adoption of AI in the fashion industry has paved the way for its growth, thereby estimating a massive adoption until the forecasted year.
|Market Size||USD 1.3 billion in 2029|
|Fastest Growing Market||Asia-Pacific|
|Largest Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
The increasing demand for personalized experiences has bolstered the utilization of artificial intelligence in the fashion industry. The tremendous use of e-commerce sites for shopping apparel, footwear, beauty cosmetics, jewelry and watches, and other accessories has bolstered the market's growth. As stated by our paid sources, the fashion e-commerce market was valued at USD 525 million in 2019 and is expected to reach USD 953 billion by 2024, a CAGR of 9.4% per year. Further, as stated in the survey by Adobe, 67% of respondents said that brands must change content depending on the current context automatically. This would aid them in selecting the appropriate product in the minimum time. Thus, the increasing customer demand for personalized experience has propelled the growth of the market
The surge in social media utilization has led to increased social media accounts and many youngsters' broad reach. As per the Straits Analysis, the total number of social media users in 2017 was valued at 2.86 billion. It is anticipated to show a two-fold growth and reach 4.41 billion by the year 2025. A large number of readily available audiences has bolstered the fashion industry. Some of the benefits of social media for this industry comprise valuable interactions, more comfortable shopping habits, increased implementation of recommendations, and improved accessibility. Artificial Intelligence has further led to a personalized feed on the social media account, thereby aiding the fashion e-commerce market.
The fashion industry has always been unreachable by the common people. However, with the advent of social media and e-commerce, it has been easier for most brands to reach common people. However, some of the legacy brands have been focusing on in-house technology and marketing strategies. The limited use of the common trending strategies is mainly due to some of the houses' inability to keep up with the latest technological advancements, thereby facing significant issues in replacing the outdated systems. Further, the limited utilization of technology by these legacy companies and some top brands has limited their scope and audience. Thus, the existence of the legacy systems has restrained the growth of the market.
North America to Hold Lion's Share in the Global AI in the Fashion Market
North America dominates the AI in the fashion market owing to the presence of the primary key players such as Microsoft Corporation, IBM, Google, AWS, Facebook, Adobe, Oracle, Vue.AI, Findmine, Lily AI, Mode.AI, and Stitch Fix, among others. Additionally, the tremendous growth of social media and e-commerce, and many software enterprises have also bolstered the market's growth.
According to the Mobile Economy 2020 report released by the GSM Organization, the U.S. had the largest number of smartphone users in 2019, i.e., 83%, and the figure is projected to hit 91% by 2025. In comparison, according to the Global E-commerce Report 2020 of the e-marketer, the U.S. placed 2nd in the e-commerce shopping and distribution rankings. The report also indicated that the US e-commerce market accounted for almost 11% of the total economy in 2019, i.e., approximately. 601.65 billion Dollars. Thus, the increasing penetration of advanced technologies has bolstered the growth of the region.
Asia-Pacific Anticipated Being the Fastest-Growing Region in the Global AI in the Fashion Market
Asia-Pacific is estimated to be the fastest-growing region in the global AI in the fashion market owing to the high penetration of smartphones, tremendous use of social media, and e-commerce websites. Further, favorable government policies to encourage digitization in countries such as China and India, which are home to approx. 36% of the global population. According to the Mobile Economic 2020 study released by the GSM Organization, smartphone penetration in Asia-Pacific and Greater China as of 2019 was 64% and 72%, respectively, and is forecasted to hit 81% and 89%in 2025.
Further, the Global E-Commerce Guide 2020's ranking of the highest online shopping penetration rates shows that six of the top ten countries are Asia-Pacific, with China ranked first, South Korea ranked second. Indonesia, India, Taiwan, and Thailand ranked fifth, sixth, eighth, and tenth. Thus; the aforementioned factors drive the growth of the region.
The global AI in the fashion market has been segmented into two major parts, solutions, and services based on components. The solution segment caters to the maximum share, mainly due to the increasing inclination of the fashion industry towards software tools and platforms such as e-commerce, social media, etc. Further, the tremendous utilization of smartphones and the growing penetration of the internet across all the global regions have compelled the fashion industry's digitalization. The use of effective advanced technologies such as AI has led the companies to gain many customers. Thus, higher adoption of the software segment has been observed.
The global AI in the fashion market has been bifurcated as cloud and on-premises deployments based on deployment. The cloud segment caters to the maximum share in the market owing to the flexibility and adaptability offered by cloud computing for the fashion industry. Also, growing digital transformation has increased the demand for technologically advanced software and technology across all sectors. Besides, as reported by Salesforce, 91% of businesses decided that cloud storage would make it much easier to adhere to government rules and regulations. And the growing tendency of cloud providers to offer cost-effective and efficiently managed applications to the information and services industry has fueled the market growth.
The pandemic has resulted in lockdown in almost all the world countries backed up by stringent government regulations such as the opening of only "essential services," restricted inter and intrastate commute following social distancing. A surge in the adoption of digital services, mainly social media, has been observed. Further, the gradual 'Unlock'leadsto the e-commerce segment's reemergence due to maintaining physical distance while shopping in retail. Thus, a tremendous shift is being observed from physical shopping to online shopping, thereby bolstering the growth of AI in the fashion market.