Global Market Size, Forecast, and Trend Highlights Over 2025-2037
AI in Fashion Market size is anticipated to increase from USD 2.19 billion in 2024 to USD 170.62 billion by 2037, demonstrating a CAGR of around 39.8% throughout the forecast timeline, from 2025 to 2037. Currently in 2025, the industry revenue of AI in fashion is assessed at USD 2.8 billion.
Over the years, the fashion industry has witnessed significant growth due to globalization, the rapidly expanding online sector, and the adoption of advanced technologies like artificial intelligence (AI). AI solutions are widely used in the fashion industry to improve the customer experience by understanding their behavior, purchasing patterns, and preferences. This information helps in tailoring marketing strategies, and product offerings to align with the customer experience.
In May 2024, Oracle Corporation announced the new generative AI capabilities of Oracle Fusion Cloud Applications Suite to help consumers improve decision-making, and enhance their experience. The latest addition AI is embedded in existing business workflows across HR, sales, supply chain, marketing that enables organizations to focus on meaningful tasks to engage buyers and accelerate purchase decisions in a more precise manner through automating repetitive processes.
AI in Fashion Sector: Growth Drivers and Challenges
Growth Drivers
- Surging trends in the fashion industry - Brands such as Zara, G-Star Raw, & H & M are using AI tools to help fashion designers create new designs in reshaping the fashion industry. AI analyzes the amount of fashion data from various sources, such as fashion blogs, online retail sites, social media platforms, and others to keep up with the upcoming fashion trends. Based on this data, AI uses machine learning and algorithms to generate unique designs, patterns, and styles for the upcoming trends in the fashion industry. In July 2024, Adobe Inc. announced innovations in its professional design apps Photoshop, and Illustrator to empower the designers to realize their visions faster. Innovations enable designers to quickly bring their vision to life across product packaging, logos, brand graphics, and pattern creation.
- Increasing use of AI tools in online shopping platforms - The rising use of AI tools in online shopping platforms such as social media and e-commerce platforms has significantly shaped the fashion industry. Consumers prefer the convenience of selecting products from online retail platforms over extensive catalogs. AI in online shopping platforms generates a virtual model that allows the customer to see how exactly the clothes will fit them. For instance, in March 2023, Deep Agency launched an AI algorithm that can generate photorealistic virtual model photos. This algorithm lets the customers place the fashion model against the digital backdrops to increase the diversity of models.
Challenges
- Lack of technical expertise among fashion professionals - There is a requirement of skilled professionals to use AI solutions in the fashion industry to cater to the consumer’s needs. Rising concerns about job security in the fashion industry are one of the major issues that companies face. In addition, AI is a new concept in the AI in fashion market, making it difficult to find AI expertise for the fashion industry. Businesses operating in the fashion sector needs to collect and analyze large amounts of data to leverage AI effectively. However, fashion professionals may not have the necessary skills to handle, and analyze large data sets.
- High investment in cybersecurity - Fashion businesses face the challenge of securing sensitive information such as customer data, new designs, and technology innovations from their competitors, adding unnecessary expense to the business operation.
AI in Fashion Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
39.8% |
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Base Year Market Size (2024) |
USD 2.19 billion |
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Forecast Year Market Size (2037) |
USD 170.62 billion |
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Regional Scope |
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AI in Fashion Segmentation
Categories (Beauty & Cosmetics, Accessories, Clothing, Others)
Clothing segment is poised to hold AI in fashion market share of over 35% by the end of 2037, owing to the surging demand for personalized experience in the clothing sector. AI uses historical purchase information from customer data, and makes predictions for customer preferences for new purchases, leading to a reduction in the clothing return percentage. AI smart mirrors are steadily gaining popularity among customers to visualize their outfits in different colors, sizes, styles without the need of changing them. For instance, in February 2022, MySize launched an AI-powered smart mirror to analyze the customer’s body style preferences and shape to suggest outfit combinations. Smart mirror technology eliminates the guesswork of picking a size and works to speed up the try-on process.
Application (Creative Designing & Trend Forecasting, Inventory Management, Product Search & Discovery, Virtual Assistant, Others)
The inventory management segment in AI in fashion market is set to hold a significant revenue share by 2037 due to the increasing need to maintain the inventory level for future sales in the fashion industry. AI-powered inventory systems by using algorithms such as market trends, historical sales information, and others help retailers, and manufacturers to never face the problem of under or over-stock. In January 2024, SAP SE launched new AI-driven capabilities to help retailers optimize their business processes. New SAP predictive replenishment will consider demand volatility, constraints, and business targets to determine the optimal order quantities with the lowest cost.
Our in-depth analysis of the global market includes the following segments:
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Customize this ReportAI in Fashion Industry - Regional Synopsis
North America Market Statistics
North America industry is estimated to dominate majority revenue share of 32% by 2037. owing to the presence of major key players such as Microsoft Corporation, IBM Corporation, Adobe Inc., and others. These key players are continuously investing in R&D for the launch of new AI technologies in the fashion sector. In addition, the key players are adopting new AI tools in the fashion industry for the management of clothes, and other fashion accessories with sustainability.
The market growth in Canada is set to grow over the forecast period due to the increasing government initiatives for the advancement of AI technologies. In June 2022, the Artificial Intelligence and Data Act (AIDA) was introduced in parliament to promote the development and use of AI systems in Canada’s private sector. Additionally, the surging use of smartphones and other devices among consumers for getting along with the new trend in fashion is another factor that is anticipated to foster market expansion in the country.
The AI in fashion market in the U.S. is projected to experience significant growth by 2037. This growth can be attributed to the growing use of different social media platforms such as Facebook, Instagram, and Snapchat, providing different fashion ideas to customers.
APAC Market Analysis
By 2037, Asia Pacific AI in fashion market is set to hold more than 27% share. due to the growing e-commerce industry. AI provides different benefits to customers over the e-commerce platforms, such as product recommendations, chatbots, virtual assistants, and others.
The ongoing fashion trend and rising availability of clothes, and accessories at discounted rates is contributing to the expansion of the sector in China. The manufacturing and labor costs of producing clothes are low in this country owing to low tax & duty rates and strong business ecosystem.
The market in India is projected to experience notable growth by 2037, fueled by the increasing investment by the companies for marketing strategies and rapidly expanding fashion sector. AI analyzes the purchasing patterns of customers to understand the influencing fashion choices, which helps in tailoring marketing strategies. As a result, companies in the country can offer products as per the needs of the customers.
Japan's AI in fashion market is anticipated to grow over the forecast period due to surging use of AI robotics to manufacture better fashion products. AI robotics uses a 3D imaging lens to scan the clothing products and pack them accurately. Additionally, Japan is one of the major suppliers of industrial robotics to various countries such as the U.S. and China.
Companies Dominating the AI in Fashion Landscape
- Microsoft Corporation
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Oracle Corporation
- IBM Corporation
- Amazon Web Services, Inc.
- Adobe Inc.
- SAP SE
- Huawei Technologies Co., Ltd
- FindMine, Inc.
- Google LLC
- Lily AI
The integration of AI in the fashion sector is proving to be a game changer. Brands such as H&M, Zara, Nike, and Levi’s are a few examples that have incorporated AI into their business operations to enhance personalize shopping experience, and improve customer service. The AI fashion market comprises multiple key players across the globe competing for a larger market share. To stay in front of competitors and uphold their position, these companies frequently employ various tactics such as mergers, acquisitions, and partnerships with other companies. Some leading market players are mentioned below:
In the News
- In February 2024, Adobe Inc., and fashion designer Christian Cowan announced the launch of its wearable and electronically reconfigurable garment created using Adobe Primrose technology at the Fall/ Winter 2024 New York Fashion Week Show. The technology helped the designer to bring its creative ideas and designs into reality.
- In January 2024, SAP SE announced that Hunkemöller International B.V. company has moved from an on-premise system to SAP S/4HANA Cloud Private Edition Solution. The latter company wanted a technology infrastructure that can offer personalized insights into customers’ shopping behaviors.
Author Credits: Abhishek Verma
- Report ID: 6296
- Published Date: Mar 19, 2025
- Report Format: PDF, PPT
