Over the last decade, fast fashion has transitioned to the digital realm. While name brand outlets like H&M and Zara continue to thrive, new online players have revolutionised the market in ways that may prove telling for the future of how we engage with ecommerce in Australia.
High internet penetration, growing digital literacy, and a growing demand for consumer goods have propelled the rapid evolution of a sophisticated e-commerce ecosystem, now the largest in the world. Behind the great firewall, domestic platforms have flourished without the presence of global giants like Amazon and Ebay, and figures from Statista based on World Bank, IMF, and UN data evaluate the sector at USD $1.47tn today.
Within the industry, the Alibaba-owned Taobao and Tmall are by far the largest, commanding a 40% combined market share. The former works as a C2C (Consumer-To-Consumer) marketplace, where individuals and small businesses can sell to users, while the latter hosts more legacy brands like Nike.
These two also offer a combined service, hosting over 60,000 vendors and distributors, many of which solely produce apparel, and provide quick shipping services for goods purchased in-app. This fractured producer base gives them a wider catalogue, and allows them to respond quickly to popular trends, extremely important in China’s dynamic consumer landscape.
A huge portion of the industry’s growth can be attributed to the integration of social ecommerce —- a convergence of trading platforms and social media. Companies like JD, Pinduoduo, and Taobao attract consumers with social media-esque navigation systems, and foster user interactivity by encouraging reviews and micro-influencing.
Most companies integrate their platforms into major social media apps, connecting direct, in-app influencer-to-purchase transactions. If you see it, if you like it — you can buy it. Immediately. And some social media apps have even launched their own trading platforms, like 抖音 (Douyin/Tiktok) that now feature an in-app marketplace. They are endlessly optimised and vast, with endless scroll functions and response-tailored suggestions. They aggregate huge numbers of brands, arrange incredibly quick and convenient delivery systems, provide easy refunds, and instantaneous payment.
It’s hard to overstate just how significant a change this is. Where fast-fashion players like FashionNova, Shein, and H&M once used social media to inspire products, announce them, and direct consumers out-of-platform to their own marketplaces, this new generation of apps are either fully integrated or connected to social media inside-of-app. And many present like social media platforms themselves.
They make shopping easy. Easier than it ever has been. And gamify the experience, totally removing consumers from any means of production.
Taobao and Tmall trade hundreds of millions of transactions per day, almost all contained within the domestic market. And of these transactions, fashion and apparel is the second highest category, with around 783.1 million users. As mentioned earlier, these products come from tens of thousands of different producers located across China, and Taobao itself makes none of the merchandise.
Unlike fast fashion giants like H&M, Shein and Zara, Taobao has no direct accountability for the products and supply chains involved in the goods it delivers to you. Vendors are mostly promoted and regulated by customer feedback and user interaction, accountable only to Taobao’s sales guidelines which emphasise punctuality and do not mention sustainability or workplace conditions.
Their success, typical of fast fashion, relies on their ability to quickly deliver trending clothes, often at an even lower price point. And while they don’t deal strictly in low-quality, low-price goods, their popularity and delivery system make them the perfect environment for trading them.
It’s important to note that platforms like Taobao have also managed to shake up the Chinese textiles industry, and local consumption practices. The platforms have greatly compressed domestic supply chains, connecting producers more directly with consumers and demand. Crackdowns on counterfeit trading and access to an online market has also empowered independent vendors, allowing them to compete in a user-regulated, feedback-based market.
But ultimately, the lack of reporting and division of production makes it harder to hold Taobao accountable, and measure its impact on workers and sustainability. The platform does offer a special page for renewable “green products”, and it does hand out coupons specifically targeted at these products. Alibaba, its parent company, has also spearheaded several recent recycling initiatives, including AI-powered recycling systems, and commitments to transitioning more energy use to renewable sources.
But these efforts are still dwarfed by its and the industry’s consistent high environmental impact. In 2023, according to state media, China’s total package delivery exceeded $100 billion for the third consecutive year. And 2020 data from the State Administration for Market Regulation indicates that the courier industry produces more than 1.8 million tonnes of plastic and 9 million tonnes of paper waste annually.
And although the Chinese government has committed to a green packaging express system by 2025, the system will only cover 10% of intracity deliveries. China’s commitment to a double carbon goal, allowing emissions to peak until 2030 means that, at least for the next few years, this issue isn’t going anywhere. This is not even mentioning the environmental impact of the enormous traffic and storage incurred by Chinese server-based ecommerce, for which we were unable to find statistics.
But what does this mean for the future of fast fashion, especially in Australia?
Taobao’s success is predicated on high, close demand, direct access to cheap, domestic labour, and universal digital integration. And so it’s unlikely its success will be replicated in a country like Australia. But this new, centralised, gamified form of online shopping may well become the norm.
Online shopping has also grown immensely in Australia, tripling to 16% of our total retail turnover over the last decade, according to the 2024 Australia Post eCommerce report. And Gen Z show an immense appetite for buying clothes online, as the highest consumers of fashion via the web, accounting for almost a quarter of their entire online expenditure.
The growing inaccessibility of designer goods, profusion of clothing apps like Depop, and the rising cost of thrifted clothes may further push the Australian market to lower-cost online fast fashion retailers like Taobao.
This transition may not be so simple though. Any ambitious platform will have to overcome the question of sustainability in the eyes of Australian consumers. In Gen Z Australians, fast fashion’s largest demographic, 93% express a preference for sustainable shopping, according to the same Australia Post report.
In any case, fast fashion’s next evolution in Australia will likely be a compromise between the two. Something entirely new to cater for the growing cost of living, demand for aesthetic goods, and the pressing need for circular consumption.
