DIGITAL TRANSFORMATION OF FASHION ENTREPRENEURSHIP IN PAKISTAN: AI ADOPTION, SOCIAL-COMMERCE CAPABILITY, AND FINANCIAL INCLUSION

Abstract

The transformation of digital Technology in consumer industries has altered the competitive landscape that small and medium enterprises (SMEs) have utilized, especially in developing countries. The study aims to analyze the relationship between the adoption of AI tools, social commerce capabilities, and sales growth in the fashion and apparel industry in Pakistan in the context of digital financial inclusion. The study employed a cross-sectional research design and administered surveys in the form of a structured questionnaire to 280 SME owners, managers, and executives. SPSS was used in conjunction with the PROCESS Macro by Preacher and Hayes to analyze the data. The results show that the adoption of AI tools and social commerce capabilities has a positive influence on sales enterprise growth. Moreover, the inclusion of digital financial systems positively influences the strength of the relations by enabling secure, efficient, and reliable payments. The study contributes to the limited research on the combined use of AI, social commerce, and financial inclusion, providing both actionable and theoretical insights to the SME literature. The results support the Resource-Based View (RBV) by emphasizing Technology and financial capabilities as strategic assets for sustaining growth in the digitally driven markets. It suggests that policymakers in Pakistan's fashion and apparel industry focus on the gaps between technological advancements and financial infrastructure to enhance competitiveness.

Keywords: AI Adoption, Social-Commerce Capability, Digital Financial Inclusion, Enterprise Sales Growth, Fashion and Apparel SMEs, Pakistan.