In these times of market volatility, when everyone is talking about monetary tightening, inflation, asset bubbles, crypto crashes, etc., there is one asset class that seems proof against the odds. shocks: sneakers!
Yes, sneakers are the latest asset class in town. Merchandise that sees insane demand for pairs sneakily “discontinued” by companies like Nike and Adidas and the extremely limited supply makes them truly sought after.
How the Hype Business Works
The game is simple. The big brands, as mentioned, release sneakers in limited numbers and a group of enthusiasts buy them as soon as they hit the market. Then these limited sneakers are sold at full price via social networks or reseller platforms.
An overview of how sneaker culture has spread can be seen in the chart above. Google Trends indicated a 400% jump in searches for the term “sneakers” in India and a whopping 800% jump in searches for “Air Jordans”. On Instagram, the terms “sneakerhead” and “sneakers” have between 1.5 and 2.5 million posts about them. Yeezys, a fashion collaboration between Adidas and Kanye West, saw 1.7 top posts. And yes, if you’re looking for a date, data shows that being a sneakerhead can be a great connection to your ilk.
The Michael Jordan Effect
When the world went into lockdown in March 2020 due to the COVID-19 pandemic and we consumed online content as our main source of entertainment, Netflix released “The Last Dance”.
Along with basketball legend Michael Jordan’s exploits on the court, the series somehow reinvigorated the sneaker culture that began in 1985 when Nike released the Air Jordan 1.
Subsequently, eBay in the 90s further propelled sneaker resales. In 2014 itself, eBay’s sneaker sales reached $388 million.
In India, there is no hard data to suggest the size of the “sneakerverse”, but companies like Campus, Bata, Metro and even Red Tape are all betting on shoe casualization. Sports and athleisure itself is expected to be a Rs 21,000-22,000 crore market by 2025, according to a report by Technopak.
In 2020, sneaker resales stood at $1 billion and this figure is expected to rise to $5 billion by 2025. In India, the market is still nascent and growing with an average ticket size estimated at Rs 15,000, more than 20 times the average selling price of other shoes in India.
In case those numbers blow your mind, let us further tell you that these shoes become serious wealth generators if the time, part, and condition are right. One of Michael Jordan’s shoes – the Upper Deck Signed 1986 Fleet is now up for auction. It can bring in between 2 and 3 million dollars!
In fact, some expensive kicks are the Air Jordan 1 Chicago priced at Rs 21 lakh, the Air Jordan Dior comes for Rs 9 lakh and the Travis Scott X Jordan is priced at Rs 3-5 lakh.
Where to buy/exchange?
There are serious apps like StockX, BUMP, GOAT, SoleSearch, etc. – which, like exchanges, also have a mechanism to buy and sell sneakers or streetwear.
Back home, Find Your Kicks, is a sneaker resale platform that recently caught the interest of all the “sharks” on a popular TV show.
Factors Contributing to Growth
Many factors have led to the growth of this culture in India. The first is the opening of multi-brand sneaker stores in India: VegNonVeg, SuperKicks had a big impact. Second, UPI and social media have made it easier to buy and sell.
In fact, over 1,000 resellers entered the market during the pandemic. This number was close to zero just a few years ago. We cannot ignore the cultural push in India through desi hip hop, NBA games and influencers like Anand Ahuja, Harsh Kapoor, Ranvijay Singha.
Here’s what you need to be sure of before buying an expensive sneaker: