From initial hype to tangible industrial momentum, the 2025 China Apparel Industry AI Technology Application Summit emerged as a key battleground where fashion companies demonstrated their technological advancements.

In early 2025, the AI upheaval sparked by DeepSeek not only rattled U.S. stock markets but also ignited widespread enthusiasm across various Chinese industries, including fashion, which quickly ramped up its AI strategy. However, by the year’s end, concerns over the AI bubble surfaced, fueled by circular trading models and heavy debt reliance on the part of giants like Nvidia and OpenAI. This, coupled with the volatility of Oracle’s stock, sent market sentiment into a tailspin.

From the “peak at the starting line” hype to the mounting skepticism surrounding the AI bubble, the question remains: Will AI’s disruption truly transform the fashion industry? The answer is becoming clearer, with two major events helping to mark a turning point. On Dec. 6, the Global (Shenzhen) “AI+Fashion” Innovative Application Scenarios Competition concluded in Shenzhen, and on Dec. 19, the 2025 China Apparel Industry AI Technology Application Summit kicked off in Hangzhou.

Both events brought together nearly 100 fashion enterprises and cutting-edge AI tech companies, signaling that the technology’s transformation of China’s fashion sector has entered deeper, more complex waters.

A Digital Ecosystem

China’s fashion industry is forging its own path through the “technology implementation [plus] value reconstruction” model. The sector is transitioning from traditional manufacturing to a more digitally integrated ecosystem, turning once-hyped concepts into a force for industrial upgrading.

From a global perspective, the application of AI in fashion is a story of contrasts. On one hand, The Business Research Company forecasts the AI market in the global fashion industry will reach $1.75 billion by 2025, with an annual growth rate of more than 39 percent. Major fashion players like LVMH Moët Hennessy Louis Vuitton are actively expanding their AI efforts. On the other hand, issues such as the high costs and low outputs of large language models, or LLMs, and debates about technical approaches have prompted some to question AI’s practical value.

Technology research and development focus workflow with Al and 3D to accelerate industry upgrades.

This “dance between enthusiasm and rationality” has opened a unique opportunity for China’s fashion industry. China’s core advantage lies in its “end-to-end adaptability.” With a complete supply chain from design to production and strong capabilities in cross-border e-commerce and livestreaming, China can swiftly implement AI technologies into practical solutions. Qu Fei, vice president and secretary-general of the China National Garment Association, pointed out, “China’s apparel industry is at a critical juncture, transitioning from an industrial economy to a digital economy, where technological innovation is the key driver.”

The apparel industry is undergoing a paradigm shift from being “experience-driven” to “data-driven.” According to Du Yanbing, full-time vice president of the China National Garment Association and president of the China Apparel Technology & Innovation Research Institute, AI technologies are advancing from basic data mining to complex multi-modal integrations, with numerous innovative applications emerging across five key areas: precision marketing, digital R&D, product innovation, supply chain collaboration and intelligent manufacturing.

In the design sector, the leap in AI-driven efficiency is already clear. For example, Style3D integrates AI with 3D technology to digitize the entire process from style generation to precision adjustment, cutting the approval cycle for first samples from one week to just one day. Chen Mengjie, head of German Operations, revealed that overseas business now accounts for 50 percent of Style3D’s total sales, illustrating the company’s rapid international expansion.

Boosted by Government Initiatives

Meanwhile, government initiatives are helping push this technological transformation forward. In Linping District, a hub for Hangzhou-style womenswear, the government has partnered with the China National Garment Association to accelerate the “design [plus] digital [plus] technology” transformation, supporting more than 200 textile and garment enterprises.

Zhejiang Shenfu Artificial Intelligence Technology Co. is another prime example of how AI is empowering small companies in Haining. By leveraging AI tools to optimize design processes, they expanded production capacity without additional investment, adding 200 “virtual factories” and improving both production efficiency and innovation capabilities.

Kashion, a Ningbo-based ODM company, has integrated AI into its operations, using it to streamline the production process. By collaborating with Style3D, they’ve built a standardized database, which enables precise matching between print designs and 3D garment models. Clients can now preview designs via QR codes and avoid inefficient price negotiations. This innovative model has attracted international attention, with Spanish brand Desigual becoming Kashion’s first overseas client to adopt AI-developed prints.

Moreover, Wensli, a company focused on silk cultural and creative industries, has used AI to design “100,000 unique silk scarves per person.” This innovative approach not only speeds the design process but also frees up designers to focus on more creative tasks, demonstrating how AI can be used as a tool to augment human creativity rather than replace it.

As AI technologies mature, the next challenge for China’s fashion industry is to transition from isolated tools to fully integrated ecosystems. AI’s ultimate value lies in its ability to restructure entire business models, connecting the supply side with the consumer side and unlocking new market space.

Lu You, head of AI Apparel Business at Alibaba International Digital Business Group, highlights the potential of AI in reshaping business models. While AI-driven supply-side efficiency is widely acknowledged, the challenge lies in proving its effectiveness on the consumer side. In cross-border e-commerce, balancing supply and demand through AI integration will be key to creating a more dynamic market.

In e-commerce, AI-powered platforms like MyTwins.ai have become pivotal in reshaping livestreaming sales. By using a self-developed vertical language model, MyTwins.ai has helped brands like New Balance increase sales and improve ROI. AI hosts now engage with customers during off-peak hours, offering product demonstrations and real-time interaction, contributing to significant cost reductions.

Becoming “Demand Driven”

These innovative practices are driving the transformation of the fashion industry from being “product-driven” to “demand-driven.” The focus is now on providing solutions that meet consumer needs rather than simply selling products.

In conclusion, while the hype around AI may eventually subside, the applications that deliver true value will endure. Despite the ongoing debates over the AI bubble and the challenges around technology and business models, AI’s role in China’s fashion industry is set to become more robust. By focusing on precision upgrading, ecological expansion, and brand empowerment, AI is paving the way for a more resilient and dynamic fashion industry in China.

Editor’s note: China Insight is a monthly column from WWD’s sister publication WWD China looking at trends in that all-important market.