Explaining the virtual success of gaming in the fashion industry at the 6th FaB Seoul Meeting
The 6th FaB Seoul meeting on “The latest beauty/fashion tech experience” was aptly held online, crossing time zones between facilitators in the United States and panelists in South Korea.
But what made the set up really interesting was the juxtaposition of two trailblazing ladies in the cosmetics world — Claire Chang, General Partner of beauty-tech venture capital firm based in Silicon Valley, igniteXL Ventures, and Hana Lee, Founder and CEO of vegan cosmetics Melixir — moderating the discussion by two male technologists — Andrew Ku, Founder and CEO of gaming company Unmatereality, and Daniel Shin, Founding Partner at KingsBay Capital, a cross-border venture capital firm and Head of Corporate Development at MCM, a German luxury brand.
Ku, who confessed to having no experience in fashion or beauty, is the brains behind ADA, the 3D platform with gaming and social network functionalities that all luxury brands want to get their emblem on.
He explained how his business crossed over from gaming into fashion.
“We have been developing, publishing games for the last 19 years and one of the successful games I created actually 10 years ago was the fashion game… We grossed avg $83/per user on a monthly basis. Believe it or not, some people spent $10K/mo for virtual fashion that we created. After 1 year, I had this initial idea WHAT IF I could bring that real brands, especially luxury brands, digitize their fashion selling as virtual fashion.”
However, not having any connection to the fashion industry, Ku went nowhere with the idea. Fast forward to 2017, Ku finally had access to the luxury fashion brands and was able to sell his idea and vision. And, as he started to talk to brands, he realized there’s so much more he can address. He saw how much waste there is via numerous fashion shows, samples created, overstock inventory all created a totally inefficient business model and ecosystem.
Said Ku, “Everything was being handled very analog style. There was no data. There was no technology to make things efficient.”
Questioning the sustainability of such a system, he came up with ADA, a 3D fashion platform where a brand’s fashion can be digitalized and sold as a virtual item. ADA, a gaming platform is a perfect bridge between brands and young Millennials and gen-Z. ADA wants to make luxury fashion available/accessible anytime, anywhere.
In China, Ku explained that by 2025, China is expected to represent half of the global luxury market and most brands were clueless as to how to enter the China market. “ADA had already, as a game operator, built a successful game business in China so we already had the knowledge and the means to enter China. So we basically had all the answers to the problems the brands were facing.“
ADA’s innovation was already in motion with or without COVID-19. The pandemic just accelerated the time period by 1–2 years.
According to Daniel Shin, “Next big market is not necessary China but the virtual world. And that there’s so much opportunity. Selling fashion as a virtual item is the most sustainable, eco-friendly model you can generate. The game industry in Korea is about a $10B industry. Virtual goods/micro item selling within the game is the main revenue driver. Especially young people are extremely familiar with game models so this can be very interesting momentum right now. With COVID-19, no people interaction, people are going for screen experience, even more, engaging screen experience than before — I see that as something Korea can offer value and will lead the global market in.”
Shin also explained the rise of live commerce. “One-way monologue style is fading. How we can engage with customers in a new way. That’s where we have spent most of our time investigating. Traditional one way TV home-shopping experience lasted over 30 years. Now through live commerce, it’s a very engaged and interactive experience. You can have items showing up in real-time and have interaction with the presenter and/or other customers all in real-time. On our recent campaign, we had over 20K people engaged in the live- commerce and a lot of purchase started happening there.”
Shin noted that this was already widely adopted in China and is spreading to the rest of Asia.
Ku then gave a walkthrough his technology used in ADA which can create digital models wearing fashion that accurately recreates the texture and even flow of the textile caused by body movement.
Moderator Lee conveyed a question from a participant regarding ADA’s technology application in the beauty industry. In response, Ku pointed out that brands like Estee Lauder are already investing heavily in R&D in creating an augmented reality mirror system where users can virtually apply makeup.
Ku added, “What we are trying to do is make it accessible to anyone, any place, any time. It works well with the beauty industry, that’s what we’re already seeing.”
Lastly, Chang asked if it’d be possible to create a real-life experience using technology. Ku answered “we can never replace the real-life experience with technology. What it can do is to enhance and help make the experience more efficient.”
In conclusion, both Ku and Shin agreed that technology was there to complement the industry and not to completely replace the physical experience, despite the continuing advances in technology.
Text: Ching Li Tor
Contributor: Claire Chang
