Beyond Covid-19 from production to consumption: Remodelling the future of fashion in Asia.
If Covid-19 has not killed them yet, fashion brands throughout the world will have experienced an unprecedented slowdown since the start of the pandemic. Amid fashion show cancellations across Asia in Shanghai, Seoul and Tokyo, the Boston Consulting Group estimates that this year’s sales will decrease by 30% versus that of 2019, and by up to 15% in 2021.
In Asia, home of four of the top five largest exporters of clothing in 2019, the effects are not just felt with brands and retailers, but also with producers and manufacturers. These four countries — China, Bangladesh, Vietnam and India, made up just under 50% of the world’s share of clothing exports in 2019. In Bangladesh alone, where clothing accounts for 33% of total exports, apparel cancellations from international brands amounted to US$3.18 billion in April, 81% lower than the same time in April 2019.
Beyond its effect on fashion production, the crisis rapidly changes consumption habits — consumers increasingly turn to green, local, mix-and-match options and clothing styles. As a result, the industry is set to become less cyclical, less vicarious and more transparent.
The end of cyclical fashion shows
Since the dawn of the 20th century, fashion brands have shared their creative innovations and reinforced brand image through highly ritualised interactions.
The preview of collections far ahead of actual delivery take months of preparation but last for no more than 20 minutes. Covid-19 brought a sudden end to these forms of interactions costly for the environment. It moved Shanghai, Tokyo, and now London fashion weeks online, while inspiring brands from Dior to Burberry to launch “audience-less” staged fashion shows, digital campaigns and even a fashion film.
China, as the largest consumer of luxury fashion, felt this abrupt end more so than others. As it is just beginning to establish Shanghai Fashion Week on the global fashion calendar, its largest fashion trade fair — the China International Fashion Fair — has also been postponed with no new date set. It may need to rethink its entire approach to placing itself on the fashion map.
The fashion industry will hence need to turn to other forms of outreach while using less product, energy, resources and manpower. Even Vogue editor Anna Wintour seemed to approve of the recent cancellation of the Met Gala, suggesting it was “an opportunity for all of us…to rethink our values, and to really think about the waste, and the amount of money, and consumption, and excess that we have all indulged in”.
Less vicarious fashion
In the short term, the pandemic seems to have triggered “revenge shopping” in Asia in particular. For instance, Chinese customers were lining up outside boutiques, and a Hermès boutique in Guangzhou raked in US$2.7 million ($3.67 million) in a single day of sales, the highest single day sales for a boutique in China.
However, with more social distancing, remote working and more digital than face-to-face engagement in many countries such as Singapore, the very premise of fashion as a visible marker of status, wealth and style may lose its currency. To survive, fashion brands will need to invent other forms of signalling.
Pre-Covid-19, consumers were already turning towards new forms of expression, such as experiential consumption in dining and travel. With less travelling, brands need to look for novel ways for customers to experience the brand, whether digitally or in person — for instance, private and exclusive cocktail classes over video conferencing platform Zoom in Singapore.
In particular, new forms of fashion may emerge within inconspicuous consumption, which emphasises practices rather than objects. Culturally-rich “aspirational” consumers indeed tend to thrive on gaining superior knowledge, connoisseurship and authenticity — rather than showing off in the traditional sense. This kind of value-based signalling speaks louder than an ad. It is better for the watch to be an insider secret than splashed on the wrist of the latest influencer.
Value through transparency rather than scarcity
Finally, demand for production transparency, right down to the leather craftsman behind the pumps, is on the rise. Consumers seek conspicuous production — a tool for them to show off their knowledge. This is especially poignant for apparel manufacturing hubs like Bangladesh, Cambodia, India and Vietnam, where transparency in the supply chain is especially needed not just for consumers, but to also ensure that there are fair wages, safe working conditions, and no children being exploited for labour.
The effects of the Rana Plaza collapse in Bangladesh in 2013 has brought light to poor working conditions, and now with Covid-19, there is further press on transparency to expose unpaid wages and unconstitutional layoffs. While “fashion excursionists” may continue to value consumerism and materialism (in particular, cars and watches in China), members of the new elite in countries across Asia increasingly value getting a top education, tout environmentally friendly products, support small and local businesses while placing renewed priority on education and well-being.
The expressive value of luxury is retreating from consumption while invading the production process. Some luxury brands are experimenting with this, an example being Mulberry’s latest “sustainable leather” bag collection. French luxury goods giant LVMH declared sustainability to be a must-have for this year’s LVMH Prize for designers as well as its commitment to full traceability of all its raw materials by 2025. Other brands have already made product, production and brand experience more transparent.
For instance, labels like People Tree, Filippa K, Kings of Indigo, Armedangels, Nudie Jeans and even sports brands like Patagonia, have long enabled their customers to peek into the workings in their factories and offices. But to organise the fashion house of the future, the industry has to change the value chain into a circular chain.
Every year the fashion industry uses 93 billion cubic metres of water — enough to meet the needs of five million people. The overproduction and subsequent destruction of deadstock by luxury, fashion and even sports brands is no longer a secret. Brands need to do more to reduce wastage and maximise resources, and solutions are increasingly coming from Asia.
For instance, Fashion For Good — a platform for sustainable fashion innovation — awarded nine innovators in their South Asia innovation programme, who are focusing on the use of sustainable materials, packaging, and processing. These nine start-ups will be given the support and network they need to scale. Asia, being the key manufacturing hub in the world, sits in the starting prime position to create an innovative and valuable supply chain downstream. The industry must also emphasise consumer-led digital content.
Everyone is a creator and an individual is a reflection of a brand’s values. By embracing this bottom-up approach, fashion must allow communication to be truthful and direct. How many times have you read a sponsored post from an “influencer” and wondered how much he or she got paid to publish it, instead of actually admiring the brand and product?
How many times have you seen a fragrance advertisement featuring a gorgeous woman running in a ball gown, and felt more disconnected than inspired? There is a fine line between trying to convey an experience and being plain detached from the customer. The aspirational class wants to earn cultural capital for itself, not for others. Digital is the vehicle to do so.
David Dubois, INSEAD Associate Professor of Marketing, and Debbie Teo (INSEAD MBA ‘12J), is Head of E-Commerce, Armedangels