The implications of the metaverse for Sri Lanka’s fashion industry

Sri Lanka's apex body, the Joint Apparel Association Forum (JAAF) reveals what leading apparel companies such as MAS, Brandix, Hirdaramani Apparels, Norlanka and Star Garments are doing right now to engage with the metaverse and embrace the digitisation of apparel manufacturing. For fashion ‘look, touch and feel’ is everything. So it can seem counterintuitive that the world’s largest brands could soon be creating outfits and accessories that will either partly or completely exist in a virtual space. But as much as it may seem like science-fiction, fashion brands are betting heavily on the metaverse. Morgan Stanley projects that virtual fashion could be a US$50bn opportunity by 2030, adding as much as a quarter (25%) to the industry’s total earnings. For context, this is approximately 10x the value of Sri Lanka’s record-breaking export earnings from apparel exports for 2021. And it’s not just speculation that’s driving growth. Brands like Dolce and Gabbana have already made US$5.7m over the sale of just nine Non-Fungible Token (NFT) pieces, while Valentine’s Day 2022 gave rise to the first ever Metaverse Fashion Week show on the popular online game, Second Life. While enthusiasm for virtual fashion is at an all-time high, details of just how the metaverse will actually work and its implications for key sourcing regions such as South Asia, and countries like Sri Lanka in which apparel account for over 40% of national exports, remain unclear. How Sri Lanka can uncover the value behind the metaverse hype A simple way to understand the metaverse would be as a future iteration of the internet, made up of persistent, shared, 3D virtual spaces linked across a totally digital universe. Those immersed in such universes will communicate, spend and indulge in leisure time through their virtual avatars. So far, there are two possible routes for fashion brands to profit through the metaverse. The most direct option is producing virtual apparel for digital avatars – the first few fashion NFT sales have been aimed at this market. In some instances, the items exist purely in the metaverse, in others, the item will have an In Real Life (IRL) counterpart to those existing virtually. The second is advertising designs through the metaverse equivalent of a retail outlet. Through fashion shows like Decentraland’s Virtual Fashion Week, dozens of major global brands and thousands of visitors were able to virtually attend fashion shows and live music sessions at branded after-parties and buy and wear digital clothing directly from catwalk avatars. Some of the fashion items will even include a physical duplicate of the item in the sale of their NFT fashion pieces. While the metaverse is still very much in its infancy, Joint Apparel Association Forum (JAAF) Secretary General, Yohan Lawrence believes it may have the potential to shape the next decade of fashion in a similarly disruptive manner to what we have seen already with the rise of e-commerce and omni-channel retail to date. “Where Enterprise Resource Planning systems, digital payments, and Web 2.0 were pivotal in the success of fashion brands over the past decade, Web 3, 5G and the Internet of Things, virtual and augmented reality, and of course NFTs and blockchain technology could lead to entirely novel business models in fashion. The question that Sri Lankan apparel manufacturers need to ask themselves is: How can we build on the progress we have made thus far, while aligning ourselves for what’s coming next?” Weaving parallel skillsets for the metaverse in Sri Lanka's apparel industry From humble beginnings as cut and sew or made to order mass production in the early 1980s, Sri Lanka has steadily moved into production within high-value, high complexity niches in the global apparel supply chain. Leading this ongoing transition are home-grown multinationals like MAS, Brandix, Norlanka and Hirdaramani. “Science and technology have been integral to enabling faster production of more complex products such as our ‘Second skin’ E-knit range of intimates and athleisure lines, and more recently in fem-tech and recovery wear,” says director technology commercialization of MAS Gihan Philip. “A considerable amount of research and development went into the creation of these products. However, with our more recent investments in digitalisation, we are expanding our ability to design and prototype new lines entirely virtually. Designing fashion for the metaverse could be a logical extension of these capabilities.” He noted that while many of these 3D visualisation technologies have been available for some time particularly after the pandemic, brands and manufacturers are both more open to virtual collaborative design. Meanwhile, the technology itself is improving exponentially. “There have been significant advancements in scanning, imaging, and simulation of materials. This means that we are able to capture much more detail as to how different fabrics will look, and how they would drape on a person. Together with improvements in platforms that enable virtual collaboration, we are able to generate authentic digital twins for our designs and make changes on the fly.” Star Garments' director of operations, Jeevith Senaratne explains: “Instead of frequent physical photo-shoots, we can simply scan a model and combine those scans with apparel designs in order to showcase them entirely virtually. We are also able to leverage social media to test consumer responses to particular designs, and alter the production lines based on their response. This eliminates a great deal of cost, and cuts down on time taken to move from design to production, all of which is immensely valuable. All of these capabilities take on a new significance in the backdrop of the significant investments being made by brands into the metaverse.” Virtual design has also been a game-changer for Hirdaramani. As a result of investments in the most current 3D-Fit software systems – including: CLO, Browzwear, and Tuka Tech, the company has been able to drastically cut costs and improve delivery time. CEO/Director of Hirdaramani Industries Sri Lanka Theodore Gunasekara says, “We have significantly increased our capabilities and capacity on 3D sampling especially after the pandemic. Today, we are able to simulate complex effects such as washing and laser on denim. This enabled us to convert the majority of our prototype samples, pre-production samples, and fit samples to digital. Given the severe limitations faced globally during the pandemic, such systems have helped us to shorten development lead times and keep production lines running despite logistical bottlenecks. They also help us to move the needle on our sustainability goals given that they reduce resource consumption even further.” Bridging the gaps virtually and in real life Similarly advanced capabilities have been established at Brandix. A global apparel innovation company with end-to-end capabilities in design, technology incubation, and digital and vertical manufacturing of ‘Smart clothing’, it has been the heart of Brandix’s efforts to enable rapid prototyping through to proof of concept. Among its numerous innovations which may have the potential to intersect with the metaverse are its advanced motion sensing and seamless haptic actuator integration designs. Powered by Artificial Intelligence, the Sensemove line is able to intelligently measure the framework of an individual’s physique, in order to help guide technique for athletes. “As the metaverse begins to develop, we believe technologies like this have the potential to integrate with these virtual worlds, in order to create new applications in sports and fitness,” states Non-Executive Director of Brandix Hasib Omar, “When we think especially about how rapidly we saw e-commerce and social media become a central part of our daily lives, we see immense potential for highly specialized apparel that merges fashion with technology.” Another emerging player in Sri Lanka that may offer insights into the shape of things to come for Sri Lankan apparel in terms of the metaverse is Norlanka. While engaged in the same lines of business from design to delivery, the company has one crucial difference relative to the island’s larger and more established firms: its asset-light business model. While the company owns a few manufacturing facilities, most of its capacity is bought from its apparel SME partners. Leveraging similar visualization systems, the company flexibly orchestrates its production across Sri Lanka’s vibrant SME apparel manufacturing sector. Norlanka ventured into the 3D space back in 2019, and currently develops products entirely digitally with some of its clients. Powered by a dedicated research and development team, the company has been continuously exploring new possibilities to increase efficiency, while adding value for its customers and partners, thereby enhancing sustainability across the sector. “One of the next major projects we are working on is in the realm of digital sampling,” says Chief Innovation Officer of Norlanka Buddhi Paranamana. “In an asset-light model like ours, we have to be able to clearly showcase every facet of a given line to our partners and buyers. Our expertise in advanced digital design and sampling means we can easily pivot into producing purely digital or hybrid designs for the metaverse, which can also be manufactured at commercial scale for IRL retail. These digital designs can also be used as NFTs in the ever expanding creative spaces of the metaverse.”. However, as revolutionary as this new technological paradigm could be for the fashion industry over the next decade, today’s most visible metaverse plays are still being made by high profile brands. By releasing limited designs and leveraging on the strength of their brand, and the novelty of the medium of NFTs, these brands are capturing the most up-front value. For apparel producers to cut in on this action, they will need to build up their own brands and designers first.