The fashion industry in Bandung is facing intense competition and shifting consumer preferences after the COVID-19 pandemic, especially among MSMEs players. Changes in shopping behavior, including the rise of online purchasing and increased demand for affordable yet high-quality products, are driving local brands to innovate continuously. This study aims to investigate the extent to which product innovation affects competitive advantage, using Neric.Story as a case study. A quantitative approach was employed, utilizing descriptive research design and simple linear regression analysis. Data was collected through an online survey involving 100 customers who made at least one purchase from Neric.Story during August 2024 to January 2025, using a convenience sampling technique. Descriptive results indicate that product innovation at Neric.Story is 83% positively perceived by consumers on average. Competitive advantage is rated high as well with an average score of 78.43%. This study confirms that 56.8% of the product innovation has a positive and significant impact on competitive advantage. These findings confirm that product innovation plays a vital role in building and sustaining the competitive advantage of fashion-based MSMEs, particularly in adapting to dynamic post-pandemic market conditions. Future research should explore additional fashion MSMEs and broader variables to better capture factors influencing competitive advantage.