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Would you wear clothes that don't exist?

Digital demand for fashion and luxury brands is expected to grow by 2030, says Morgan Stanley

Visitors in front of an immersive art installation, ‘Machine Hallucinations — Space: Metaverse’, by media artist Refik Anadol. (REUTERS)

Digital demand for fashion and luxury brands is expected to grow from current low levels and result in extra sales for the industry that could reach $50 billion by 2030, according to Morgan Stanley.

"Revenue streams from digital mediums for luxury brands are negligible... We think this is about to change," strategists at the U.S. investment bank wrote in a note on Tuesday.

Also read: Is NFT the disruptor that digital art needs?

"The Metaverse will likely take many years to develop; however, NFTs and social gaming (e.g., online games and concerts attended by people's avatars) present two nearer-term opportunities for luxury brands," it said.

According to Morgan Stanley, NFTs (non-fungible tokens) and social gaming could expand luxury group's total addressable market by more than 10% in eight years time and boost industry earnings before interest and tax by around 25%.

Noting how one in five Roblox gamers update their avatars daily, it said luxury brands are exploring a number of collaborations with gaming and Metaverse platforms.

It also said Italian brand Dolce & Gabbana's recent sale of nine NFTs for $5.7 million, albeit small, highlights the virtual and hybrid luxury goods' huge potential over the coming years.

"We expect the whole sector to benefit from the advent of the Metaverse, but see the soft luxury brands (ready-to-wear, leather goods, shoes, etc.) as particularly well positioned as opposed to hard luxury (jewellery and watches)," it said.

Also read: Collectors of digital NFTs see a market worth the risk


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