The price of shares in Meta, the parent company of Facebook and Instagram, dropped by 26 percent yesterday in the wake of Mark Zuckerberg conceding a fall in the number of daily active Facebook users. He also said the users are spending more of their time using TikTok. What does this suggest for the fashion industry?

Meta stunned investors when it announced the first-ever drop in the number of daily Facebook users while announcing the rival Bytedance-owned TikTok was taking up more the time of its users. TikTok dominates the top of the fashion weeks’ front rows; however, Meta has invested in the highly sought-after metaverse. So who will take the crown in fashion?

Since the rebranding of Facebook, Meta said revenue did not meet expectations during its fourth-quarter earnings call, which led to a 200 billion reduction in its market value. The CEO Mark Zuckerberg admitted that TikTok was a significant competitor (and it was taking up more the time of users) and Reels the Instagram’s short-form shorter-form video version of TikTok was not as developed. Video ads are generally more difficult to market than the type of ads in feeds that helped propel Instagram and Facebook to the top of the pile, according to Zuckerberg. Facebook Daily active users fell by half a million by the close of the year as well as monthly active users were lower than analyst expectations. Slowing growth in revenue from advertising, partly due to the privacy rules Apple announced in 2021, has weighed on the share price. Snap as well as Pinterest’s shares also dropped.

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TikTok can still expand: TikTok reached 1 billion active monthly users in September, and Meta reported 2.9 billion users in 2021. In terms of advertising revenue, TikTok is far behind in payment, with an estimated $4 billion in the last year compared to Facebook’s $100 million.

Primarily, for fashion, Meta and TikTok are battling to capture the attention of the younger generation, and they are also competing for the attention of style as advertisers. Meta’s most significant advantage is that it hopes to take advantage of its aggressive approach towards buying; in recent times, it’s swiftly introduced technology that allows people to buy the items it shows on Instagram particularly, such as the in-app checkout feature computer vision that enable users to locate products that can be purchased in images, or live videos. It’s also expanding Facebook and Whatsapp’s connection to allow brands to develop storefronts, known as Shops, upload inventory and speak with customers. As of now, TikTokers have joined fashion guest lists alongside now-traditional influencers on Instagram and bloggers.

“Our strategy here because introducing Stores annually and a half ago has been to produce it as easy as you possibly can for individuals to obtain after finding a fresh company or item without having to change over to a browser or re-enter their payment info,” Zuckerberg stated.

A vital element of the strategy to combat the loss of interest is to shift towards a metaverse platform that is very crowded and takes time to become famous. The metaverse is widely thought of as the next phase of the web and predicted to be as powerful as social media and websites for fashion, precisely due to the potential to offer digital products for avatars. Top brands like Gucci and Ralph Lauren are already signing on to experience metaverses through platforms like Roblox, Zepeto, and Decentraland, and Morgan Stanley predicts social gaming could add $20 billion to the luxury market.

Virtual reality and online commerce allow virtual advertisements, which are influenced by behavioral data that is far more than the data that Instagram or Facebook could collect through scrolling and tapping. As it shifts towards the metaverse, Meta is investing heavily in virtual reality, augmented reality, artificial intelligence, and the required talent to create equipment and software for this, which is cutting into profits.

Meta’s vision of a virtual world where real-looking avatars dressed in digital clothing purchased through one of its websites are gathered to play and work. It is hoping that all its properties can be integrated and that users can move between its virtual and augmented ones with various equipment, such as AR glasses and top-of-the-line headsets. Multiple players have an advantage in creating immersive virtual environments to sell products, such as Roblox, Decentraland, and The Sandbox. However, “this fully realized vision is still a ways off,” Zuckerberg said.

Discord is another rival, Zuckerberg noted, as the gamer chat service quickly transforms into a place for discussions about Web 3.0 and NFT projects.

The company announced that it would change its business name to Meta. At the end of October, the number of searches for “metaverse” soared. People are already assuming they are the ones who Zuckerberg and Meta created “the metaverse.” However, whether this is an advantage for Meta is not clear since many people are already skeptical of Facebook. Up to 87 % of Americans expressed concern about privacy if Facebook successfully establishes its metaverse, as per the latest study by VPN company NordVPN. The study also revealed that 41 percent believe it’s challenging to protect their identity from the metaverse.

In addition, the concept that is “the metaverse” is inherently interoperable, which means that the dominant platform model contradicts the notion of early adopters.

So, Facebook might face a difficult couple of years ahead in pursuing its metaverse ambitions while retrofitting Instagram to be competitive with TikTok. “Meta is compromising its core enterprise model for its desire for the metaverse,” claimed Rachel Jones, a related analyst at the data and analytics firm GlobalData in an announcement. “Betting huge on the metaverse isn’t a poor point, but it will require another decade to progress, and Meta’s underwhelming number of daily consumers on both Facebook and Instagram indicate intensifying competition for individual involvement. With different platforms.”