In these uncertain times, is it better to invest in gold or sneakers? StockX, the American platform that offers sneakers sold through auction, was inspired by stock market speculation. Over the last year, sales on the platform outside the US have increased by 260 percent. In the third quarter of 2020, according to its just-released report, StockX had an average of 25 million monthly users worldwide.
In Europe, where the American company established itself two years ago, sales have tripled. StockX is benefiting from a mix of key drivers, including the booming demand for sneakers and the growth of the resale market. In fact, with a growth of 15 to 20 percent on average, the resale of sneakers should represent more than 25 billion euros by 2030, including more than 16 billion outside the US, according to market research firm Cowen. These factors are only added to by the acceleration of online sales, combined with the push of Generation Z. Olivier Van Calster, StockX’s vice president and international and managing director of Europe, analyses this phenomenon for FashionUnited and details its European ambitions.
FashionUnited: StockX's latest quarterly report shows that the Asian and European markets are driving demand, with a resale market worth more than 25 billion euros by 2030. Which are the key European markets?
Olivier Van Calster: StockX's domestic market remains number one. Growth rates are less important because the market is more mature. In Europe, where we've only been in business for two years, growth is exponential. We started from a zero base and have eased the brakes on import and delivery costs while making the customer experience easier. In Germany, France and Italy, sites are now in the native language. As a result, we have seen growth that has exceeded our expectations. These three countries are our European strongholds, with still a lot of potential, while Spain and Benelux should follow this trend.
What are the differences between these markets?
In France, it is the Jordan 1 that dominates, with its very particular silhouette, as well as the Yeezy X Adidas collaboration. The Nike Air Max models are also part of the cenacle of the most desirable shoes. Of the top 100 most popular sneakers in 2020, 20 percent are Jordan 1s and 15 percent are Nike Air Max. Netflix's "The Last Dance", which tells the story of the Chicago Bulls and Michael Jordan, also had something to do with this. The Italians are also very "Jordan", while the Adidas ZX is a hit in Germany.
Finally, Nike cultivates a long tradition of international collaboration with world-famous artists and athletes. The silhouettes of these shoes have a special resonance in international markets.
How has StockX been impacted in Europe by the pandemic?
At the beginning of lockdown, the impact was visible, there was a slowdown in activity for two or three weeks. Then we saw an incredible acceleration of traffic on the platform. The influence of Generation Z is critical: 62 percent of StockX users are under the age of 25. Young people stuck at home during lockdown have embraced this craze for the sneaker and the cult product. The “Gen Z” is also fuelling the emergence of the "next-gen" clientele who are looking for unique and exclusive collaborations rather than fast fashion.
This acceleration in sales continues today. The emergence of the female audience is the other key factor: non-American and particularly European female users of StockX have jumped 130 percent in the last year, thanks to the increase in the female sneaker offering. On StockX, global sales of women's sneakers surpassed the global market by 70 percent in 2020. We offer easy access to luxury yet affordable products. The phenomenon is further multiplied by social networks.
At the peak of the pandemic, disparities in access between markets were also created. Because of routing blockages, some products were difficult to find here, easy to access elsewhere. For example, Supreme was almost impossible to find in Europe, while its availability in Japan was enormous. I'm also thinking of Dior X Air Jordan 1, which was a big hit everywhere, with prices ranging from 5,000 to 7,000 euros, and for which France is the number one international exporter.
Apart from younger generations and women, do you have a more refined typology of StockX users? Between buy-pleasure, collection and speculation, what are the main motivations of the public?
All three are important. StockX guarantees purchase security, honest prices and traceability. This makes it easy to buy with pleasure. The motivation of the "collector", of the sneaker lover, when he could not afford the shoes he wanted when he was younger, is also important. We must not neglect the weight of the generation of forty-five-year-olds who grew up with these brands of sneakers. We are at the crossroads of luxury, streetwear, desirability and societal product. The phenomenon is not new but has become particularly pronounced over the last five years. Finally, the speculative aspect, the economic opportunity that this type of investment represents has undoubtedly increased with the Covid-19 crisis. Especially among the youngest: this generation of "spontaneous entrepreneurs" in a context of crisis and uncertainty, further accentuated by the pandemic.
How do you interact with brands? Do you push for the launch of limited editions?
We have launched the IPO (Initial Product Offering) formula, which has been met with great success. A blind bidding system where the user sets the starting price, without reference to the price charged by the brand. At the beginning of May, New Balance put 400 pairs of the series resulting from the collaboration with the creative collective ‘No Vacancy Inn’ on sale directly on StockX. After 4 days of being on the marketplace, the IPO generated nearly 14,000 bids, the largest number in the history of StockX IPOs. This is an example of how we collaborate with major brands which we will continue to do so.
What are your upcoming projects?
We have three areas of development. We will continue to invest internationally, particularly in Europe and in our key markets of France, Italy and Germany.
We are also opening an office in Tokyo to launch StockX in Japan. Finally, we want to continue to expand our product categories, particularly on desirable electronic items such as Xboxes, Playstations and iPhones. Overall, we are still working on improving the customer experience.
Photo credit: StockX
This article was previously published on FashionUnited.fr. Translation and editing: Andrea Byrne