The fashion market isn't dying. It's fragmenting
Originally written in Chinese. Translated with AI, reviewed by Gary. Read the Chinese original →
Today I want to talk about the fashion market.
For the past few years, lots of people have been saying fashion is hard now, e-commerce is hard now, traffic keeps getting more expensive, platform commissions keep rising, and consumers are harder and harder to read. There's truth in that. But if you zoom out to the whole world, the fashion industry isn't dead. It's just no longer the simple old game of "go cheap, list it, buy ads, push volume".
Four very different companies
Recently I came across an American company, Quince. It runs a manufacturer-to-consumer model, which simply means cutting out as many middle steps as possible and connecting consumers directly to the manufacturing side. In March 2026 it closed a US$500 million Series E at a valuation of US$10.1 billion. Its 2025 revenue already passed US$1 billion. It doesn't sell ultra-cheap goods. It uses better quality to stake out a position of "premium goods without traditional retail markup". Its core isn't being cheap. It's making consumers feel: at a fairer price, I'm getting something close to a higher price tier.
Quince is really reconnecting supply chain, forecasting, inventory, pricing and consumer demand. It isn't just selling clothes. It's redesigning the structure of retail.
Another is Reformation, an American womenswear brand that started in 2009 as a vintage boutique in Los Angeles and is now preparing to IPO. Its 2025 revenue was US$507.1 million, up from US$438.2 million in 2024, and 90% of its revenue comes from direct-to-consumer. More importantly, it's still profitable: 2025 net profit was US$12.6 million. That's down from the year before, but at least it isn't a brand propping up its valuation by burning cash.
Reformation isn't a cheap brand either. It sells a very clear style: feminine, sustainable, pretty, with a bit of an LA lifestyle feel. It doesn't serve everyone. It serves a very well-defined group. Its point isn't "I want to make the most mass-market clothing", but "I want to be the wardrobe choice for a particular group of people".
Then there's Whatnot. Whatnot is a live commerce marketplace. It isn't a pure fashion platform, but it matters because it proves the US and European markets are starting to accept live-stream shopping. In October 2025 it closed a US$225 million Series F at a valuation of US$11.5 billion. Whatnot's own 2026 live selling report says live GMV on the platform passed US$8 billion in 2025, double the year before, with the women's fashion category up 223%.
That's interesting too. Many people used to think live commerce only happened in markets like China, Southeast Asia and TikTok. But look at Whatnot: it has taken off in the US and Europe as well, just in a somewhat different form. It isn't simply a host shouting "three, two, one, link's up". It's more of a mix of community, interests, collecting, trust, interaction and transactions.
And then there's Vinted. This one is even more unusual, because it's a second-hand fashion marketplace. It was founded in Lithuania in 2008 and has been going for many years. In 2025, Vinted's marketplace GMV reached 10.8 billion euros, up 47% year on year; revenue was 1.1 billion euros, up 38%; and it still made a net profit of 62 million euros.
Vinted shows another trend: young people today don't only buy fast fashion, and they don't only chase brand-new things. Especially in Europe and the US, second-hand, pre-loved, resale and circular fashion have become a very big market. For them, buying second-hand isn't about being poor or embarrassing. It's a choice. Some do it to save money, some for the environment, some to find styles you can't buy anymore, and some simply think it's the smarter way.
The market isn't shrinking. It's fragmenting
The fashion market isn't actually getting smaller. It's getting more fragmented.
The market used to be like one big river. Everyone watched roughly the same TV, read roughly the same magazines, and was educated by roughly the same department stores, shopping malls and big brands. What was in fashion was basically fed to you by a few big media outlets, a few big brands and a few big channels.
Now social media, TikTok, Instagram, YouTube, Reddit, Discord, live streams, KOLs, creators and AI recommendations have broken all of that apart. People who love K-pop may have no idea what's trending in Europe and the US. People into anime and cosplay may not care what's happening in basketball, football or luxury fashion. Outdoor fans are watching a completely different world of content. And for someone into modest fashion, her needs, occasions, taste and pain points are different from an ordinary fashion customer's.
Brands used to grow big by finding a big enough mass market. Now, to get a brand off the ground, you need to find a deep enough niche.
That's also why these companies all look so different. Quince innovates on supply chain and price structure. Reformation innovates on style and brand positioning. Whatnot innovates on sales channel and interaction. Vinted innovates on consumer attitudes and the second-hand market.
What they have in common isn't "they all sell clothes".
What they really have in common is this: each caught a group of consumers that had newly split off, and served them with a new structure.
The opportunity in the fragments
That's my biggest observation about the fashion industry lately.
The future fashion market may not produce as many "winner takes all" brands. Instead we'll see lots of brands and platforms that are very clear, very sharp and know their users very well. Some will do premium value, some sustainable fashion, some live commerce, some second-hand, some modest fashion, some AI styling, some creator commerce.
The market will keep fragmenting, but there will be lots of opportunity in the fragments.
It's just that this opportunity no longer belongs to the old "I buy stock a bit cheaper, spend a bit more on ads, push my price a bit lower" crowd. That era will get harder and harder, because the platforms will take their cut, traffic will be expensive, consumers will compare, supply chains will compete fiercely, and in the end everyone ends up in a price war together.
The real opportunity lies in whether you can understand a group of people: why they buy, when they buy, where they buy, whose advice they buy on, and why they come back after buying.
The new opportunities will belong to those who can reconnect demand, content, channels, supply chain, data and brand.