Online Fashion Retail Market Report 2026

The online fashion retail market size has grown rapidly in recent years. It will grow from $776.6 billion in 2025 to $861.99 billion in 2026 at a compound annual growth rate (CAGR) of 11%. The growth in the historic period can be attributed to rising internet penetration, growth of smartphones, increasing urbanization, expansion of global fashion brands, improvement in online payment infrastructure.

The online fashion retail market size is expected to see rapid growth in the next few years. It will grow to $1.31 trillion in 2030 at a compound annual growth rate (CAGR) of 11.1%. The growth in the forecast period can be attributed to increasing disposable income, demand for convenience shopping, growth of cross-border e-commerce, rising youth population, expansion of omni-channel retail strategies. Major trends in the forecast period include AI-powered personalized fashion recommendations, sustainable and ethical online fashion offerings, ar-based virtual try-on and fit visualization, data-driven dynamic pricing and inventory optimization, digital wallets and buy now pay later integration.

A growing inclination toward digital shopping for ease and safety is anticipated to drive the expansion of the online fashion retail market over the forecast period. Digital shopping, commonly referred to as online shopping, involves purchasing products or services through an internet connection using websites or mobile applications. The shift toward digital shopping is largely fueled by the convenience of shopping from home, access to a broad range of products, and the ease of comparing prices and identifying discounts, making it a more attractive and efficient choice for consumers. In fashion retail, digital shopping provides added benefits such as convenience, a wide product assortment, and personalized shopping experiences supported by advanced technologies including artificial intelligence and virtual try-on tools. For example, in December 2025, according to the US Census Bureau, a US-based government agency, e-commerce sales in the third quarter of 2025, adjusted for seasonal variation but not for price changes, totaled US$310.3 billion, representing a 5.1% increase compared to the third quarter of 2024 and accounting for 16.4% of total retail sales. As a result, the increasing preference for digital shopping driven by convenience and safety is supporting the growth of the online fashion retail market.

Major companies operating in the online fashion retail market are emphasizing the development of advanced solutions such as AI-powered virtual try-on tools and chat-based shopping platforms to meet the growing demand for personalization and more immersive digital shopping experiences, driven by consumer expectations for smooth, intuitive, and engaging online retail interactions. AI-powered virtual try-on tools and chat-based shopping platforms leverage artificial intelligence and machine learning technologies, including computer vision and natural language processing, to allow customers to digitally visualize products or engage through conversational interfaces that recognize user intent, providing a more interactive experience than traditional static product displays and filter-based searches. For example, in June 2025, Daydream, a US-based fashion technology company, introduced its AI-powered chat-based shopping platform, an innovative online fashion retail solution aimed at reshaping how consumers discover products by enabling personalized conversational search and recommendations across millions of products and thousands of brands using natural language and image inputs. Daydream’s technology incorporates generative AI to understand user preferences and shopping intent through conversational interactions, operating as a digital personal stylist and advancing beyond conventional e-commerce search by offering more intuitive, context-aware product discovery and customized recommendations, thereby improving convenience and relevance in online fashion shopping.

In February 2024, Coupang Inc., a South Korean-based e-commerce company, acquired Farfetch for $500 million. This acquisition will bolster Coupang's global presence and diversify its product offerings by integrating Farfetch's luxury fashion portfolio. It aims to attract high-end shoppers and extend its reach beyond South Korea, aligning with its goal of becoming a leading global e-commerce platform. Farfetch Ltd., a UK-based e-commerce company, specializes in luxury clothing and beauty products.

Major companies operating in the online fashion retail market are Amazon.com Inc, Alibaba Group Holding Limited, Adidas AG, H & M Hennes & Mauritz AB, Nordstrom Inc, Levi Strauss & Co, Flipkart Private Limited, Saks Fifth Avenue LLC, Farfetch UK Limited, Ssense Inc, YOOX Net-a-Porter Group S.p.A., Depop Limited, Myntra Designs Private Limited, Shoppers Stop Ltd, Lane Crawford Joyce Group, MATCHESFASHION Limited, LimeRoad, Lyst Ltd, Paytm Mall, Styletag, Koovs plc, Yepme.

North America was the largest region in the online fashion retail market in 2025. The regions covered in the online fashion retail market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the online fashion retail market report are Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Taiwan; Russia; South Korea; UK; USA; Canada; Italy; Spain.

The online fashion retail market consists of revenues earned by entities by providing services such as personal styling services, customization, and subscription services. The market value includes the value of related goods sold by the service provider or included within the service offering. The online fashion retail market also includes sales for athletic wear, home textiles, apparel items, and beauty products. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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