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Circular fashion economy could be worth $5 trillion

Though a relatively new concept in clothing production, the potential value of fashion’s circular economy is vast, says a new report

An employee inspects some recycled material on November 28, 2020 at a GAMA Recycle factory in the southern Turkish province of Gaziantep, where the material produced from the plastic bottles is turned into thread and exported to European countries. - It is supposed to be recycled but instead plastic packaging from popular British supermarkets like Sainsbury's and French frozen food retailer Picard is ending up being dumped illegally in the Turkish countryside. There are at least 10 known sites in southern Turkey where European plastics have been dumped illegally. (Photo by Yasin AKGUL / AFP) (AFP)

Over the past few years, the concept of "circular fashion" has been used widely in the industry, indicating an increased interest towards reusing and recycling all raw materials.

Now, a new report by lablaco, in partnership with Vogue Business, PwC, sustainable consultancy Anthesis, Rödl & Partner law firm, Startupbootcamp and ESSEC Business School, Wageningen University & Research, says the estimated value of fashion’s circular economy could be valued at $5 trillion.

The market value constitutes an existing $3 trillion global fashion industry, and includes the $6 billion virtual fitting room market, $16 billion 3D-printing market and $40 billion eco-fibre market. There is also the the second-hand sector, including resale and clothing alterations.

Since circular fashion is a relatively new industry, the report tries to lay groundwork on defining it, and stipulates that its economy cannot be fully leveraged upon without digitization. It says, “Circular fashion addresses a series of collaborative inputs enabled by a digitized and connected system, where circularity in materials, design and (re)use are interlinked.”

The fashion sector is the world's second most polluting industry, after oil. For years, it's been facing heavy pressure to reduce carbon emissions and waste, especially from the growing number of conscious consumers. This has given added impetus to the argument for circularity.

The report urges for a more product-centric than consumer-centric approach to fashion, underwired by digital landscape for seamless functionality and efficiency. The aim is to make fashion traceable for everyone.

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