Need to get rid of a single price game.
Editor’s note: This article is from WeChat public account “LADYMAX” (ID: lmfashionnews) By Drizzie.
The long-term value of sneakers consists of the product’s own performance and cultural value, both of which require long-term construction
Behind the overheating of the sneaker culture is a complicity between the brand and the consumer.
According to the fashion business news yesterday, the country’s largest sneaker resale platform, the trend of lifestyle platform drug App online trading new rules, by increasing the seller’s default cost and increasing the buyer’s payment amount, to protect the rights of buyers and sellers, inhibit “fried shoe”. Poison APP also released the “shoes don’t fry” proposal, suggesting that the shoes are used for wearing, not for speculation, “respect the trend of the shoes, grasp the benign operational orientation, and guide the active consumption concept.”
The sneaker culture has been around for a while. Although the sneaker culture can be traced back to the last century of NBA basketball, but until the past five years, thanks to the inclination of consumers to the comfort, the global penetration of basketball and hip hop culture, the mainstream of fashion, the sneaker culture officially Specialization goes to life, from the small circle to the masses, and the words of fashion are called “out of the circle.”
Especially since the beginning of this year, “sautéed shoes” have warmed up in various parts of the country, and many people have already felt that the wind is not right.
According to the data, in May of this year, the market price of the most popular shoes on the poison APP was more than 100% compared with the selling price, and the individual shoes even rose by 430%. Various media also began to look to a group of young people called “shoes and dogs” or sneakerhead. These people include not only the average consumer who buys and collects limited edition shoes, but also a large number of shoe sellers who are not satisfied with the purchase and are involved in the resale of the shoe business.
In fact, the resale of sneakers has long been a serious business, and even “financialization” has become a tool for investment and financial management. According to the consulting firm Cowen & Co, by 2025, the resale of sports shoes is expected to become a global business worth $6 billion. Statista data shows that the 2019 shoe industry’s revenue is estimated at $9.52 billion, and the market is expected to be in the next five years.The 10.3% compound annual growth rate continues to expand, and this number will continue to grow.
The latest move of Poison APP has also made it the first platform to express a clear attitude towards speculative shoes, which has been affirmed by the official media such as People’s Daily. Prior to this, the domestic and international sneaker reselling platforms all held a tacit attitude towards the speculative shoes. The latter actually supported the total amount of merchandise transactions of the major sneaker resale platforms, and promoted the rapid growth of multiple domestic and international sneaker resale platforms.
Poison APP is hatched by the largest sports community in the country and is now a unicorn with a valuation of $1 billion. Tiger fluttered in 2014 to guide the community to understand the goods network. In 2015, the poison APP, which was mainly used for information exchange and shoe identification, was officially launched, and then the function of diverting to Taobao shop was added. In August 2017, the poison APP went online for the shoe trading function. In 2018, Poison APP received tens of millions of dollars in financing from Gaochun Capital, Sequoia Capital China, and Pusi Capital, and independently operated from Tiger Fighting, and then completed the A round of financing from DST in April this year.
In addition to the poison APP, the second largest sneaker resale platform in the country also has a rapid momentum. Its predecessor was a picture social platform, which was transformed into a trend information and resale community. In June this year, it completed D rounds of tens of millions of dollars in financing. Nice CEO Zhou said in an interview that the focus of the nice service is to buy professional users of shoes for collection or investment purposes, rather than “small white users who only want to buy shoes.”
In addition, YOHO!BUY, the e-commerce platform of the trend industry group YOHO!, has a UFO flying saucer second-class trading platform on the market, and many resale platforms such as bullfighting and get make the market more crowded.
The purchasing power of young Chinese consumers has also made the global shoe resale platform untenable. In June, US sports shoe trading platform StockX announced that it has received $110 million in financing from institutions such as DST Global, General Atlantic and GGV Capital, and will use the newly raised funds to expand international markets such as China and Japan. Trading items such as toys.
At the end of July, GOAT (Greatest Of All Time), a resale platform invested by sneaker retailer Foot Locker, officially entered the Chinese market, held its first press conference at Shanghai Xingye Taikoo Hui, and launched the WeChat applet online store. GOAT emphasizes that the platform has created a business model of “sense to delivery” of sneakers with its technology and identification technology. The shoes sold on its platform must be authenticated.
Shoes resale platform is the same as many luxury second-hand resale platforms. The business model is mainly C2B2C. The platform does not hold inventory. After the order is formed, the seller sends the goods to the platform for identification, and then the platform delivers the goods to the buyer. The platform revenue comes from charging the seller a certain percentage of the service fee and charging the buyer an identification fee.
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The picture shows the shoe identification interface on the poison APP
The shoe resale platform replaced the micro-business and Taobao shop in the early gray area with the identification service. The appraisers of Poison APP are mainly from the private sector. They are opinion leaders who have accumulated many years of word of mouth. They need to queue up for hot appraisers. GOAT employs a dedicated team of appraisers and uses AI to identify and manually identify two levels. However, due to the lack of professional qualification assessment of the shoe identification, consumers still have doubts about the reliability of the product and whether the platform is a general inspection or a random inspection.
But in any case, a market has been built up and snowballed.
The premise of this business is the source of goods. The purchase of genuine products can only be obtained through official channels, and then sold in the market to earn the difference, which mainly depends on luck and probability. For the fairness of shoe sellers, sports brands have set up online forms such as online rushing in the official sales channels, multiple rounds of lottery, etc., and limit the purchase of one ID card, wearing the same brand of shoes and other conditions to qualify for shoes.
Nike and adidas have launched mobile apps for snapping limited edition sneakers. Take Nike as an example. In 2015, Nike launched the SNKRS app, which will actively push the news of limited edition shoes to users, reminding users to open the app on time. In other words, Nike has two e-commerce apps, one is the ordinary shopping app called Nike, and the other SNKRS is the app launched for shoes. According to the fashion business news data, SNKRS’s revenue has doubled and its monthly life has doubled. Today, it accounts for nearly 20% of Nike’s total digital sales. It is expected that this year’s sales will reach US$750 million.
However, although sports brands have introduced seemingly fair rules and tools for grabbing shoes, the average consumer has to pay a very high time and opportunity cost, and the possibility of buying a pair of popular shoes at the original price has been negligible. Many shoe vendors hire old people to line up, and the opportunity is obviously much larger.
What is more noteworthy is that today’s shoe rush has become a professional operation. With the “buyer” with a strong capital background entering the business, they used more sophisticated technology plug-ins, shoe-catching robots and computer skills to complete the snap-up supply.
The current shoe rush has become a professional operation, which has also become a third-party platform opportunity
For example, in the early days, experienced players found the adidas official website vulnerability, which can skip a series of pre-order actions such as selecting products and adding shopping carts, and directly enter the payment interface by inputting the URL, thereby improving the rushing efficiency. There are also shoe sellers who can monitor the changes in branded webpages in real time through computer plug-ins and seize the opportunity of the raid. Recently, there has also been an APP community for experienced players and shoe sellers in the country, such as an app called “Staring Tide”, which helps paying members to monitor the replenishment trends of major websites and brand official websites in real time, and provides a shoe sales calendar. And reminder service.
The source of supply provides the basis for this business, and the second step is the real capital game.
In view of the above advantages, today’s shoe reselling platform presents a serious phenomenon of 28, that is, a few professional sellers have mastered most of the sources of supply. In the first half of this year, 88% of ordinary buyers on the poison APP bought 1 to 2 pairs of shoes, and 12% of professional buyers bought more than 3 pairs. In the first half of this year, there was a buyer who bought 5,703 pairs of shoes on the poison app within half a year. The top ten users of the transaction volume generated 23,635 transactions in just half a year, totaling about 34 million yuan in transaction volume.
These shoe sellers who have mastered the “pricing power” have become dealers. They can increase the supply of “golden code” (that is, the number of codes with the highest demand) and pull the price, which will aggravate the imbalance between supply and demand and keep the shoes. Premium. Of course, this has the same risk factors as the stock market. Shoe sellers judge the price trend of shoes through factors such as limited edition and star street shooting. Due to the prediction error, some depreciation of shoes has also occurred from time to time.
But price volatility is precisely the key time for the dealer to make a profit. The rapper Travis Scott and Nike jointly released a low-cost “barb” sneaker with an original price of less than 2,000 yuan, which experienced dramatic price fluctuations. Since the sales volume of the shoes is not small, the probability of winning is not low. On the day of the sale, the price of the shoes on the resale platform dropped from the pre-sale price of 9,000 yuan to 4,800 yuan. Later, due to news that the shoes will not replenish, the price has risen violently, and has been around 6,000 yuan. In this process, due to the platform’s margin and liquidated damage mechanism, due to the different forecasts of the price movements of the buyers and sellers, the liquidated damages generated by canceling the order also become the source of income for some sellers.
Shoe vendors have summed up the methodology in a self-reported article on the WeChat public account, that is, the real way to make money in the shoe business must be to use the capital to shake the market and use the price fluctuations to make profits. Like stocks, considering various factors, buying, holding, and selling are long-term stable profitable methods.
AirJordan and Yeezy both old and new generations of sneakers have almost erected half of the sneakers resale market
Reviewing the evolution of the sneaker business, it is not difficult to find that the Yeezy brand, launched by rapper Kanye West and adidas, has become a disruptor of the rules of the game. If Nike and Jordan’s Air Jordan represent the professional era of sneakers, Yeezy has opened the era of sneakers. The new generation of consumers does not have to be a sports enthusiast, but is only curious about the sporting style. They also wear sneakers in other life scenes other than sports, which enriches the content of the sneaker culture that can only be used by athletes to tell stories.
At the same time, Yeezy and adidas’ hunger marketing has greatly expanded the price of sneakers. When Yeezy was launched, the price of $350 was much higher than that of traditional shoes, and the resale of the secondary market made the price rise. Earlier, Kanye West bluntly said in the talk show that Yeezy would become “Hermes in the sports brand.” Beginning last year, adidas decided to mass-produce Yeezy. On the one hand, Kanye West realized the ambition of “everyone to wear Yeezy”. On the other hand, it began to close the net and enter the stage of large-scale income. Last week, Yeezy also carried out an unprecedented replenishment, but still did not affect the Yeezy price of the secondary market, behind this is the market’s confidence in Yeezy.
Of course, the financialization of the sneaker culture is more “planned” by the sneaker resale platform. StockX has been branded with stock-traded genes since its inception. Its philosophy is to let users trade their shoes like stocks, and they are no longer limited to sneakers, but “Stock for everything” – all kinds of trendy items. Become a platform for securitization of various commodities.
Overview of the domestic and international sneaker resale platform, Poison APP is a big one in the domestic market with a solid community foundation, but the value of professional investment and rapid growth can not be underestimated. GOAT, which entered China a few days ago, is focusing on more specialized shoe identification technology, aiming to become an authority in the field, and its international background brings more abundant sources of supply.
However, the development of these resale platforms ultimately depends on how strong the sneaker secondary market is. When the market is rumored that “the elderly stocks, middle-aged people speculate on coins, young people are speculating on shoes,” this business is hard not to cause “violent thunder” concerns.
The paradox of “sautéed shoes” is that sports goodsBoth the brand and the sneaker secondary market need enough topical heat to keep the product at a premium. Sports brands such as Nike and adidas do not benefit from the secondary market, but they do benefit from other aspects such as brand value. But if it is over-capitalized and becomes a game for a few people, and most people feel tired, then this business is facing a crisis of collapse. After all, the majority of ordinary sneaker enthusiasts support the market size, and up to 88% of users on the poison APP are ordinary users.
In the short term, the sneaker market will remain strong as the market does have rigid demand for sneakers and the global trend of sneaker culture is rampant. According to Euromonitor data, China’s per capita sports shoes have a total of 0.4 pairs, 4.3 pairs for Americans, 3.7 pairs for Europeans, and 4.4 pairs for Japanese. The surge in footwear brands and footwear has reinforced the price range of the products, which has kept the price of the shoes relatively stable. At the same time, these large-scale production of sneakers will also face the real need to resell idle second-hand sneakers, although many consumers are still jealous of used shoes, but the perfect sneaker cleaning industry will weaken this problem.
But in the long run, sports brands are getting newer and more frequent, and the supply is sufficient. With the high frequency of sports brands now launching “limited” sneakers, the scarcity of sneakers will be diluted. If we rely solely on artificial concept speculation, the bubble in the secondary market will be more and more, and the development of the shoe resale platform will also fall into the bottleneck. The growth black box analysis believes that China’s resale platform should not be confused by short-term interests and vanity indicators such as total commodity transactions, and seriously explore new trading models and emerging markets, and insist on making valuable growth.
From this level, StockX’s thinking about the future is relatively clearer and has certain industry reference. StockX CEO Scott Cutler told Business Insider, “StockX does not see itself as a resale market. The market size and opportunities we seek are as big as the market itself.”
StockX does not position itself as a shoe resale platform, but rather a platform for securitization of various commodities
The core of the company’s business model is to subvert the fixed price mechanism of traditional shoes, using the new technology platform for a new price revolution. The company uses data as a difference from other resale sites that can display price fluctuations and trading history of sneakers of different sizes or colors. With the expansion of the platform in the global market, thisThe change will be global, and this is the root cause of the excitement of such platforms.
For real hot items, the price is no longer defined by the brand, but by the consumer. Susquehanna analyst Sam Poser said that the secondary market is reasonably creating heat, which provides brands with a measure of demand and helps brands truly understand market demand. Nick DePaula, creative director of sneaker collection store Nice Kicks, also believes that the rise in the price of sneakers is no longer related to supply, but more driven by demand.
In this regard, StockX has made a new attempt, the platform is working directly with the brand to release the product, which is called “IPO (Initial Product Offering) “Public Initial Release” by StockX. In January of this year, the company cooperated with the jewelry brand Ben “Baller” Yang and the footwear brand Straye to release limited edition sandals. The sale is in the form of a Dutch auction. Each buyer submits a quotation. The buyer can purchase the product at the lowest price. The final buyer spends an average of $210 on the sandals. In this way, StockX achieves consumer pricing, and the $210 price is higher than the market price of about $70 for a pair of sandals, which is the premium that consumers give to the product.
Cowen & Co analyst John Kernan believes that with the resale market reaching billions of scales, brands like Nike and adidas will not sit idly by, and they are likely to enter into a partnership with the shoe resale platform. The tripartite platform is directly listed.
In fact, the rising shoe market is becoming more and more similar to the luxury market. If you refer to the luxury e-commerce company Farfatch, it also enhances its position in the industry by establishing direct partnerships with luxury brands and conducting exclusive new product launches, breaking through the ceiling of e-commerce. It should be noted that Farmfetch, which uses the store-sales cooperation system, also does not hold inventory, and directly cooperates with the brand to develop it from a buyer’s store to become a distribution channel recognized by luxury brands, even an online scene that touches consumers.
In addition, with the development of second-hand luxury platforms such as The RealReal, second-hand luxury goods trading and traditional retailing are no longer parallel markets that do not interfere with each other. The former has deeply influenced the latter, which also has some in the sneaker market. reflect.
Similarly, the next step for StockX is to blur the boundaries between primary and secondary markets and become a replacement for traditional shoe retailers. Co-founder and former CEO Josh Luber said that StockX is not targeting a few professional players in the future, as well as ordinary consumers who just want to buy a pair of sneakers. Currently, sports shoes that cost less than $100 have become one of StockX’s fastest growing categories.
Traditional shoes collection storeThe ecological cost of the material degradation material. So people eventually have to return to seeing shoes as a long-term investment, not a fleeting trend.