Buying and selling sneakers is a business that currently has the potential to reach 30 billion dollars globally by 2030. Limited supply, buoying demand an a fast-paced tech-enabled global market are doing the rest.
Major footwear brands tend to release a small number of their most iconic designs, adding to demand and anticipation. For example, Adidas only produces 40,000 pairs of each Yeezy release, reports Forbes. This tactic can be traced back to 1985, when Nike dropped the Air Jordan 1, a culture-shifting sneaker that sold faster than the company could manufacture it, per Bloomberg’s analysis.
Barbara Davidson from the consumer resale team at SavingSpot explains to FashionUnited that “while preferences for sneakers change with every season, every new product launch, every new celebrity endorsement and every high-profile marketing campaign, we see consumer trends shifting constantly.” “Sneakers are one of the most lucrative and fast-paced items in the fashion industry,” she adds.
The pandemic has spurred demand for collectible sneakers worldwide
The pandemic has opened up online markets to sneakerheads in a way that we’ve never seen before. Peer-to-peer selling has increased because there was a long period of time where shoppers couldn’t physically go to stores to test and try sneakers on.
This new-found interest in purchasing second hand sneakers has made sellers of rare and collectible sneakers more popular than ever, points out Davidson.
Cowen reported that some of the fastest growth in the secondary market came in the months after the Covid-19 crisis began. In this regard, sneaker resale platform StockX has a hypothetical index fund of 500 sneakers, that its senior economists found outperformed the S&P 500 by a few percentage points.
Sneakers as a safe investment haven
Sneaker resellers have been treating shoes as investment vehicles for years, while StockX, one the most popular resale platforms, attempts to recreate the experience of trading on the stock exchange floor with Wall Street jargon, replacing “buy” and “sell” with “bid” and “ask.”Goat, a StockX competitor, offers buyers the option to keep purchased shoes in storage while they increase in value. Rally, a platform that sources, verifies, and acquires the most noteworthy items from collections and individuals all over the world, then takes those items and turns them into equity shares that investors of all sizes can purchase to build their portfolio. This platform started as a place where investors could purchase shares of rare cars, now moving into art, watches, and sneakers. Some of its more recent offerings in this realm have been a pair of Kobe 2s, along with a pair of Air Jordan 6s game-worn and signed by Michael Jordan himself; shoes Zion Williamson wore in action; and a 1972 prototype of Nike’s Moon Shoes.
Meanwhile, the top five selling sneakers on StockX globally in 2020 according to buy-side transactions were the Air Jordan 13 Retro Flint 2020, Air Jordan 1 Retro High Black Game Royal Toe, and three shoes from Kanye including his Adidas Yeezy Boost 350 V2 Cinder, Zebra and Yecheil. “The idea that sneakers are [also] now an emerging alternative asset class that can be bought and sold for both collection, price appreciation and investment,” revealed a recent report by Cowen.
Which countries pay the most for classic shoes?
Per SavingSpot’s analysis, more millennials consider fashion an essential expense than did baby boomers and Gen Xers. So even though classic sneakers are an expensive purchase (surpassing the 100-dollar mark in many cases,) SavingSpot’s team “noticed a trend of the younger demographic spending much more than older shoppers - even though they don’t necessarily have more disposable income. They are just more likely to economise in other areas of their lifestyle so they can keep up to date with sneaker trends.”
Location plays a big role in terms of affordability. Based on World Bank data, shoppers in the U.S. have access to the most affordable Nike Air Jordan 1s, costing just 1.95 percent of the average monthly wage. But consumers in India would have to spend 100 percent of a month’s income to purchase a pair, indicates the team at SavigSpot.
Thus, Brazil is home to the cheapest Puma Suedes (69.17 dollars), followed by 70 dollars in the U.S. On the opposite end, the four territories where the Puma Suede costs over a hundred dollars are all in Europe: Ukraine, Sweden, Switzerland, and Denmark.
Image: What countries pay the most for classic shows graph. Credits: SavingSpot.