INTERNATIONAL - One of the hottest commodities in China right now is a pair of sneakers.
The SoleFly x Air Jordan 1 in black patent leather rocketed in value by 6600percent to a high of 75999 yuan (R158209) on the online marketplace Nice after its release in December. Only 223 pairs of Nike’s retro high-tops were made for sale, said online magazine Sneaker Files.
The model is among the most profitable sneakers traded on the exchange created by Beijing-based Nice App Mobile Technology.
Such outsize returns are hard to come by, but have nonetheless caught the attention of sneakerheads like Lei Xiaoming, 20, a mechanical engineering student in Huangshi.
Lei has collected limited-edition shoes for years but only started investing in them in April.
“Prices were surging so much I thought it would be a better choice to sell them rather than wear them,” he said. “It’s more exciting than trading stocks.”
Since then, he’s spent about 200000 yuan buying more than 200 pairs - mostly Air Jordans and Adidas’s Yeezy line, a collaboration with rapper Kanye West. He’s earned profits of about 100000 yuan by reselling some, he said.
Across China, more than 10 million monthly active users frequent online-resale apps, such as Poizon, Nice and DoNew, according to Chinese data-mining company QuestMobile.
While many products suffer from the effects of the trade war, pairs of collectible sneakers are flying off the shelves, and that’s attracting the attention of US sneaker exchanges StockX and Goat - as well as China’s central bank and state media.
It seems China will soon become the sneaker capital of the world.
Most of what’s traded on these platforms are basketball sneakers - a testament to China’s love of the sport, even as the NBA faces backlash for a Houston Rockets executive’s tweet appearing to support Hong Kong’s protests.
The buzz over shoe reselling made a unicorn out of Poizon, developed by Shanghai Shizhuang Information Technology. In April, funding from Digital Sky Technologies vaulted its valuation to $1billion (R14.74bn), according to CB Insights.
China’s sneaker-resale market exceeds $1bn in value, said Scott Cutler, chief executive officer of Detroit-based sneaker exchange SoleTrade LLC, known as StockX.
Chinese investors have long speculated in alternative assets, including cryptocurrencies, fiery liquor from Kweichow Moutai, and garlic.
Now, sneakers have their attention. Unlike Chinese stocks, which only can move 10percent in either direction, there’s no cap on shoe returns.
“As with all frothy assets, there’s no telling where the peak is,” said Yu Yingbo, investment director at Shenzhen Qianhai United Fortune Fund Management. “As long as there are high returns, there’s going to be money chasing them.”
Sneaker collecting went mainstream in the US after Nike launched Air Jordans in the 1980s, and the trade went digital with eBay about a decade later.
Today’s technology makes the trade more sophisticated. Apps collect bid and ask prices, chart costs and volume in real time, and allow users to share investment advice.
Some also let customers buy coupons that can be traded for shoes before coveted models arrive - in effect selling sneaker futures.
Now more-established trading sites in the US want a piece of the action in China. StockX plans to introduce local payment and language support this year, said Cutler.