Nike Korea to ban re-sellers, will other countries follow suit?

Nike Korea is taking action against the reselling of its products, especially sneakers, with new terms and conditions banning certain purchases. The sportswear giant will retain the right to cancel orders if there are indicators leading to an intent to re-sale.

The news comes after one of its coveted Air Force 1 series x Louis Vuitton was sold at retail for 3,51m won (approximately 2,440 dollars) in July. The same sneakers were subsequently sold on KREAM, a local resale marketplace, for 14m won (9,763 dollars).

According to Econotimes, Nike's adjustment of terms and conditions would have a greater influence on the traders sweeping the inventory of Nike's well-known products rather than resale between individuals.

Restrictions on limited edition releases

The new restrictions follow Nike’s warnings last year that limited edition sneakers could face restrictions if continue to supply resellers with pairs.

Nike said it retail partners have been told they face a “supply curtailment” over concerns that too many pairs of shoes are being handed to resellers who then sell them for huge profits on online platforms such as StockX.

Nike has already cut ties with several retailers in a bid to strengthen its own direct to consumer businesses. In the US the company ceased supplying retailers including Zappos, Dillards, Boscov’s, Bob’s Stores and City Blue.

Many re-sellers use bots and specialised software to complete e-commerce transactions quicker than is possible with manual check-outs.

Last year Nike's general manager for North America, Ann Hebert, stepped down following a report her 19-year-old son bought sneakers on his mother’s credit card and sold them for a profit. The BBC said he used bots to swarm online sale sites, overcoming systems meant to restrict purchases, to buy up popular, limited edition sneakers.

One retailers told the BBC: "I think they (Nike) don't actually mind people doing it because it sort of drives the hype. They're multi-billion pound companies. At the end of the day, they could do a lot more with their technology to try to stop it."