Global technology development trends have unfolded somewhat unexpectedly. Last year the frenzy was concentrated in the metaverse, but this year the focus is on artificial intelligence-generated content, represented by ChatGPT.
Can the Chinese fashion industry bear the pressure of this disruptive technological change?
The factors impacting the global economy – including the COVID-19 epidemic, inflation, interest rate hikes, and regional conflicts – seem to be wearing off, leaving room for another new race triggered by technology’s disruption of the industry.
Recently, a number of 2022 earnings forecasts show that the overall performance of Chinese apparel companies saw a significant decline. As of press time, 23 of the 39 listed companies in the apparel sector reported losses, including Metersbonwe, which is expected to lose more than 700 million renminbi, or $101 million, in the 2022 fiscal year on top of a 400 million renminbi, or $57.9 million, loss in the previous year. The net profit of Peace Bird is expected to dive 71 percent compared to the previous year. Overall, the apparel sector was highly challenged in 2022, with a less-than-expected increase in revenues and profits as a result of discounting.
The good news is that, based on current data, there has been a recovery of consumption in the first quarter of 2023. Since January, along with a rebound in offline customer traffic, sales have continued to improve. Together with better inventory levels and less pressure to discount, the market is expecting a “Davis double-killing effect” where earnings per share will rise as price-to-earnings ratio remains low. At this time, entrepreneurs often have a strong sense of risk, but their anxiety is also mixed with a keen sense of excitement brought about by the potential business opportunities. They are eager to “seize back the time of the lost three years.”
ChatGPT and AIGC are in full swing in the market. On the one hand, Chinese technology companies began to increase their investment in AI development, represented by the launch of Ernie Bot by Baidu, while on the other, media platforms in China also began attempting to access the AI language model. At the same time, the fashion industry is focusing more on AI. With policy support and industrial investment, early starters among fashion technology companies are expected to enter the fast lane of development.
The Algorithm Era is coming, if it hasn’t already arrived. When AIGC lands in text, audio, video/live, gaming and other industries, what impact will it have on the fashion sector?
With attention shifting from the metaverse to AI, has the trend in fashion technology changed?
Like Meta and Microsoft, technology companies in China are also gradually implementing the strategy of “Shifting from Meta to AI,” impacting their workforce. In February, PICO, the virtual reality brand owned by Byte Dance, cut 15 percent of its staff, or 300 people, while Tencent eliminated all of its super XR (extended reality) positions.
In an interview with WWD, a spokesperson for Baidu, the search engine giant that previously launched the metaverse platform Xirang, said that, “While remaining optimistic about the metaverse, it is important to recognize the reality that what it offers is still in its ‘infancy’”. At the same time, another sister department of Baidu’s non-Xirang team will complete internal testing of an AI product similar to ChatGPT in March “[to] meet this ‘generational change in search’ with a posture of the highest level of readiness.”
As AR/VR wearable devices enter a period of calming down, the metaverse tide has not receded and is even sweeping through offline retail spaces. When the episode of “Wind from the Luoyang,” which is adapted by iQiyi from Ma Boyong’s novel, aired it set off a viewing frenzy. And the VR experience works based on this IP production of the same name that was launched offline after a year of preparation. From “secret room”, “live performance” to VR experience, it became the world’s first VR Omni-sensory inter-dimensional interactive entertainment project and created a “Tang Dynasty space” in Shanghai’s popular shopping district Shanghai Tomorrow Square.
In retail complex meeting a highly immersive and interactive VR experience, the marketing narrative of future fashion retail is bound to change.
But beyond retail, can AIGC become a major force in fashion design as well?
While AR/VR is the evolution of human-computer interaction from two dimensions to three dimensions, AIGC marks the potential for disruptive change in productivity. Both are key technologies making up metaverse development.
The AI that integrates labor, capital and technology is giving birth to new industries. For example, when intelligence and digitalization were applied to virtual idols, there were virtual people who could think. When AI entered medium and large garment factories, it drew on the supply chain management experience and lean production concepts of large brands and factories to implement plant-wide allocation of resources and calculate the optimal production and scheduling planning under the constraints of delivery time, personnel skills, equipment, processes, teams, etc. This enabled implementation of the “small order with shorter turnover time” production mode, which is faster than the traditional garment manufacturing cycle, and made more “de-stocking” possible.
Now AI is starting a new wave of change in China’s fashion industry.
The technology is not only able to imitate the ability of process engineers in their analysis of designs, the ability of assembly line leaders to assign processes, the ability to calculate materials and arrange secondary processes in the cutting room, but also “tap into” a source for design ideas with AIGC technology. Therefore, ChatGPT is attracting much more attention from fashion designers than last year’s AI-generated paintings that triggered a debate between AI and artists on social media platforms.
Zhao Shijian (Tina Zhao), a mentor at JALAB Lab of Tongji University and co-founder of the UNI Jewelry Designer Platform, is using AI technology to help brainstorm the steps needed to assemble collages. She believes that some ergonomics-related calculations by AI are bound to be accurate, so AI is more suitable for functional and comfort type designs than cutting edge fashion.
Yu Yimeng, an interdisciplinary fashion designer and teacher of fashion at Central Academy of Fine Arts, led her students to participate in the DeeCamp AI training camp back in 2021, tried “AI dialogue-based clothing design”, and teamed up to complete an innovative project called “AICL” (Artificial Intelligence Clothing Lab). The final conceptual application step is completed with an app, which provides users the opportunity to design clothes by means of AI dialogue-generated patterns. The AI-generated and human-selected patterns are then applied to a pre-defined resource library and delivered to the factory for production, thus launching an exploration of the “AI + human” working model in apparel design. She has now introduced AI technology as a design tool in the courses she teaches.
Observers in Chinese academia and the fashion industry also allude to economist Zhu Jiaming’s view: applications like ChatGPT will force and compel humans to evolve their thought processes. In today’s world, where information is developing and exploding at an exponential rate, it is difficult for humans to understand and process large amounts of information in a limited lifetime. So AI’s greatest contribution will be to help humans process large amounts of information.
In China, although the overcrowded cinemas and scenic spots during Chinese New Year showed people’s eagerness to return to normal life, the industry’s recovery will not happen overnight. In the face of greater uncertainty, how to boost consumer confidence remains a problem. At this point, it is believed that AIGC, as a representative of AI technology, will bring more benefit than harm in the long-term future. After all, the consumer rebound has shown that differentiation and personalization are more and more important, making the marketing narrative and product production with technical ability more favorable.
The metaverse, which is forecast to potentially be the ultimate social form of the future, requires a long term view and will be far more difficult than AIGC. Moreover, the metaverse and AIGC are not two separate and exclusive technologies. Compared with the popular metaverse of last year, Chinese fashion brands already are seeing the advantages of AIGC in helping to solve productivity problems.
Although the global wave of layoffs has not yet landed in China, AI’s ability to summarize, create and assist will enable companies to save a lot on labor costs and expand user creativity. This is a golden window for fashion companies and practitioners to use AI technology to strengthen “human” creativity, explore “human” potential, and enhance core competitiveness.
Editor’s note: China Insight is a recurring feature by WWD’s sister publication WWD China examining key trends in the Chinese market.