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Li & Fung: Activewear Brands Will Dominate Wearables

Wristwear will go the way of Google Glass as activewear brands expand their wearable tech offerings.

That’s according to the latest wearables report from Fung Global Retail & Technology, Li & Fung’s think tank. Despite Fitbit, Xiaomi and Apple taking the top three spots in terms of sales in the first quarter of 2016, Fung’s insight shows their days are numbered.

Don’t believe it? Consider why Jawbone has slowed manufacturing of its Up range of wristbands and sold its remaining inventory to a third-party reseller in order to raise funds. The company insisted it’s committed to the consumer wearables category—but that’s not to say it’s sticking with wristwear.

“Our view is that the wearables market will continue to grow in the coming years, but that a slowdown is possible before the release of ‘wearables 2.0,’ a second generation of products offering improved autonomy and use cases,” the report said. “Wearables 1.0 are effectively just another screen for smartphones. We expect the second generation of wearables to consist of smart devices that act in conjunction and integrate with the Internet of Things (IoT) autonomously.”

That’s where apparel comes into play. Wearables for the body—including smart T-shirts, body cameras, high-visibility jackets, socks, shoes, bras and chest straps—are forecast by Gartner to grow at a compound annual growth rate (CAGR) of 11.8% between 2015 and 2017.

Fung noted that a number of clothing brands have produced gimmicky apparel with built-in technology in recent years, but the longevity and appeal has been limited. For instance, the short-lived heart-monitoring bra that Victoria’s Secret launched in 2014 based on technology from Clothing Plus. But the next wave won’t a marketing stunt.

While the report lauded the connected jacket recently unveiled by Google’s Project Jacquard and Levi’s, the company called out big sports names that focused on creating software ecosystems for wellness and personal healthcare monitoring.

In fact, since 2013, Adidas, Under Armour and Asics have spent a combined $1 billion acquiring companies that develop fitness and health software applications. So it’s something that these active apparel and footwear giants are clearly passionate about.

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In January, Under Armour launched its $400 HealthBox, comprising a scale, fitness wristband and a chest-strap heart-rate monitor, as well as a subscription to several apps including UA Record, which notifies users on how to optimize their daily fitness, wellness and sleep rhythms. A month later it released UA Record-equipped SpeedForm Gemini 2 smart shoes that can record five runs’ worth of details before the runner needs to download the information to a computer or smartphone.

Similarly, Adidas has its miCoach technology, used by Germany’s World Cup-winning national soccer team in 2014. The physiological monitoring service was embedded in smart shirts and gathered data—including heart rate, speed, distance, acceleration and power—directly from each player’s body while they trained. And the company has since taken the technology mainstream. According to Fung, nine miCoach products were listed on in April.

As such, fitness is becoming synonymous with wellness and personal health, and activewear brands are driving the wearables trend by developing data clouds that allow people to measure, track and analyze more of their daily activities.

“The emergence of ‘wearables 2.0’ will shift the category from standalone devices to lifestyle-enhancing systems tying together multiple connected devices and cloud services,” the report concluded, noting that brands such as Under Armour are leading the way in offering bundles of connected products and services. “Wristwear has dominated product launches and driven market growth so far, but the clothing and sportswear categories look set to expand in terms of wearables offerings.”