Financial Fans: What Are Those Who Invest In Sneakers Investing?

In early June, Lin Hong, who arrived in Inner Mongolia from a bar in Shanghai, was waiting for a party. At the age of 23, he is a civil servant, but here he is a Dunk SB senior shoe enthusiast.

Lin hung, who entered the circle 9 years ago, is now the elder in the circle. He has also bought and sold athletic shoes, but he is more willing to call himself collectors than shoe dealers. The most expensive shoes are often collected in drying boxes. In this circle, there are not a few people who get rich overnight by buying and selling shoes. Lin hung can remember that in 2002, Nike launched a series of limited DunkSB series of shoes, such as joint name, limited marketing and so on. The shoes whose original price was less than 1000 yuan were fired to tens of thousands or even tens of thousands.

Nike's limited footwear Dunk SB series is the classic of a generation of shoe fans.

For some shoe fans, design sense / hip-hop and basketball are the incentives for them to love the culture of sneakers.

John, a netizen, asked his mother to buy the first pair of Nike shoes when he was in grade five. In his memory, he did not even have the names of the ordinary sneakers, but the moment he wore them, he felt that he had changed his walking. After growing up, little John was influenced by hip-hop. He liked AirForce, followed by Air Jordan, SpikeLee series. Before 2014, he met a group of shoe lovers who liked Dunk on the Internet, and got an organization that played Dunk. They often went out to take a SLR camera to shoot Dunk, take photos and match their feet, and then put them on their homepage.

But in the last two years, Lin Hong feels that more and more people are playing sports shoes. People who are involved in second-hand shoes trading are becoming more and more complex.

What is the premium for fried shoes?

To some extent, the spoiler is a new batch of trading platform for sports shoes.

In April 29th, the trend trading platform poison App announced the completion of the new round of financing, the investor is DST (Digital SkyTechnologies). According to people close to the transaction, the valuation of the poison has reached US $one billion after the current round of financing. The second-hand shoe industry observation report released by the trend media website Highsnobiety shows that the scale of the global second-hand shoe market has reached 6 billion US dollars. In the Chinese market, besides poison App, nice, bullfight, get and other platforms are also eyeing this cake. Nice completed tens of millions of dollars in D round of financing at the end of June, and said that in the 5 months time, the target of monthly GMV billion was achieved.

Over the past year, the sports shoe trading has become a fast growing market. According to the statistics of Aurora data, the overall penetration of App, identification, nice and bullfight, the 4 tidal brand authentication providers, has increased significantly in the past year, especially among young users aged 25 and below. The total penetration rate of App is the highest. As of April 2019, the overall penetration rate of the 4 tidal brand certification providers App was 25 in users aged 25 and below, an increase of 3 times over the same period last year. In May 8, 2019, the second-hand trading platform turned to the "tide Ke" App trading platform, and a new player was added to the domestic shoe market.

The model of sneakers trading platform originated from an American application called StockX, which was also invested by App, an investor of poison App. In June 27th, it acquired $110 million in financing and became a new unicorn. It is easy to see from the name that the idea is to buy shoes with stocks. When a pair of sneakers flow into the two tier market (shoes monopoly market), it is no longer a commodity, but more like a stock. All participants are buyers and sellers. The premium depends on the scarcity of the shoes in the primary market and the recognition of the shoes culture itself.

"Every sneakers can become traders. The premium can not only satisfy his interest in sports shoes, but also make money. Zhang Laixian, chief executive of cheek project, said to "first finance" YiMagazine.

With the trend of the concept being pursued by more and more young people, the expansion of demand aggravates the imbalance between supply and demand, and prices rise naturally. The premium logic of sneakers is similar to that of concert tickets. The difference is that sneakers can be repeatedly traded in the life cycle. In the two tier market, the average number of shoes sold at least 3 times. Every shoe lover who has changed hands due to incorrect number or other reasons has pushed up the price of shoes with the shoemakers who saw business opportunities.

It is worth noting that the two transaction does not mean that sneakers are second-hand goods. Most young people who pursue the trend do not want to spend a high price on buying a pair of second-hand shoes. This also makes the platform for shoes trading different from that of electric providers and second-hand electric providers. Therefore, in the identification system of toxic App, whether it is a new product is also one of the indicators of whether a pair of shoes can be put on the shelves.

Wu Ming is such a young man. When he was in grade six, he had his first pair of basketball shoes - Adidas's signature for basketball star Maddie. The joy of having the same sneakers with the idols is the initial driving force of Wu Ming's collectors. After going to university in 2011, Wu Ming put all the extra living expenses into buying shoes. From that year on, he first came into contact with the concept of "fried shoes".

"Before 2011, AirJordan's shoes were placed in stores or even sold at a discount, but the AJ11 black and red engraving that year turned into a hot demand." Wu Ming told the first finance and economics YiMagazine.

The pair of basketball shoes that Jordan wore at the time of the NBA1994-1995 season, which was announced to be repeated, attracted a wave of fans' attention. When the official sale was taken, the number of ballots was drawn to make it short supply in short supply. Soon, these shoes entered the two tier market and sold at a higher price.

AJ11 black and red engraving, selling high prices in the two tier market.

With the increase in the number of people participating in the sale of sports shoes, every time the classic market is repeated and limited, and the stars and KOL marketing will start a bigger wave in the two tier market. "People who buy shoes will buy all the low priced shoes that can be bought and sell them at a higher price. If others see the lowest price of these shoes, they will follow suit, just like buying stocks and futures." Wu Ming said. He joined a WeChat group. Every day people share how to make money through fried shoes.

In a sense, the second-hand shoe market has changed from a transaction originally from interest to a market of capital, manpower and technology. "Professional shoe dealers will use lots of ballot to grab shoes, but retail dealers will not be able to fight them at all."

However, just as stocks are risky, they will inevitably fail.

The failure of fried shoes in the circle is called "failure". A sudden increase in the sale of a brand, a shoe appeared fakes or sellers did not seize the opportunity to collapse. Some sellers do not even have goods to sell or sell links. Once someone pays, they ask for goods in circles. All these factors increase the risk of second-hand shoe trading. The emergence of trading platform is to minimize the risk of uncontrollable risks, such as avoiding the seller's unsold or the buyer's reversion by paying the deposit.

True and false sneakers

The latest valuation of the App is one billion dollars, which is much higher than other services or commodity trading platforms in the same period. The high value of App is largely due to the optimistic prediction of the development of China's shoe market. Nelson data show that between 2015 and 2017, the consumption scale of China's tide brand market increased by 62%. The US $6 billion estimated by the trend media website Highsnobiety, 1 billion of the global second hand sneakers market comes from China.

The high premium of second hand shoes promotes sales, assuming that the average price of a shoe in a store is 8000 yuan, even if the sales volume is only 200 pairs, the sales volume will reach 1 million 600 thousand yuan. According to Lin Hong, in the electric shoes business, annual sales volume of over 100 million shops is not uncommon.

The trend consumption of sports shoes is a kind of extremely non-standard category. Users' dependence on content will be stronger. The rise of App is due to the support of the largest sports community in China. The platform with 75.2% male users gathered the first group of sneakers in China. Lin Hong, Wu Ming and grant Qi are senior users of tiger pads, and a group of appraisers also set up fame on tiger forum.

At the beginning of 2015, the function of poison App was only information exchange and shoes identification. Until 2017, the virus App saw the potential value of the trading market and improved the trading function so that buyers and sellers could directly trade on the platform. As a result, tiger users have almost no obstacle to transform into toxic consumers.

As a platform, poison App does not interfere with the links of shoes trading. The revenue comes mainly from the rate. The rate of poison App is 3% to 9.5% of the transaction price, depending on the category. Chuck promises that the rate will not exceed 5%.

Unlike some C2C platforms that match transactions, the shoe trading platform does not seem to worry about the private transactions between buyers and sellers. "The poison will not be self operated, the platform will not participate in the pricing, and the core of the business is the genuine product protection." Poison App, director of external communication, told Zhaoyang first finance YiMagazine.

"Chuck firmly resolutely does not touch the goods, creates a store through the platform, and buyers and sellers can trade shoes on the platform, and standardize the quality inspection of sneakers." Huang Wei CEO said to "first finance" YiMagazine. In order to improve the accuracy of identification, Chek worked with the trend community get. Each pair of shoes must be identified by two platforms for sale.

Chuck is not the first platform to provide accreditation services. In fact, everyone is a buyer and everyone is a seller's second-hand shoe market. Identification is the link that almost every trading platform can't get around. Whether it is a professional platform like poison App or Taobao, it has been controversial because of fake goods.

Li Zhongzhe, the owner of Taobao, has experienced a round of strict control measures against Taobao players in 2016. Li Zhongzhe's shop is mainly profitable by selling AJ. "In that year, hundreds of stores were checked, as long as a pair of shoes were found, whether or not you are all genuine products." Li Zhongzhe told the first finance and economics YiMagazine.

This is almost the biggest difficulty for all Taobao shopkeepers of the same type. After the poison App was launched, a group of Taobao sellers settled in the platform and put some of the shoes with high price and less amount on the poison App. Taobao stores can easily price each other, but they are more likely to sell high prices in toxic App - the reason is the identification mechanism of poison App.

Generally speaking, the identification of sneakers is based on pictures. The seller sends photos of key parts such as tongue, shoes, shoes and so on to the appraiser, and the result of identification often depends on the experience of the appraiser. In fact, the resources of appraisers in China have been in short supply. Most of them are sports shoes enthusiasts. They have a formal career. The price of identifying a pair of shoes on poison App is around 5 yuan. The earlier identification of sneakers is in the post bar or forum, after the discussion of netizens, the majority of people accepted the judgment to decide whether the shoes are genuine or false. In other words, the appraiser is the KOL (opinion leader) in the sports shoes forum.

Since the beginning of the University, he began to study the authenticity of his shoes, and gradually established his reputation in various forums. At most, he identified nearly a thousand pairs of sneakers in a day. "Every brand of each brand, especially the explosive money, has unique design techniques, including identification, line and even smell. Top grade shoes appraisers usually have to accumulate for at least four or five years, and the credibility in the circle is very important." Grant Ji said to "first finance" YiMagazine.

The identification of shoes is highly dependent on the subjective judgment of the appraiser and lacks the third party guarantee. This is a risk to both the surveyor and the buyer. Buyers need to bear losses, and appraisers are likely to lose credibility because of a pair of shoes. In the view of grant Qi, there is a lack of uniform standards for the identification of shoes. The appraisers either work alone or scatter on different platforms, though they have communication but hardly form an organization.

After chick was online, he signed the contract and became a full-time appraiser of the platform. The reason is that chuck tried to professionalism the appraiser and set up a set of industry standards.

"The relationship between many platforms and appraisers is relatively loose, and the access standards are also uneven." Zhang Laixian said.

If the core business of the trading platform is genuine service, the appraiser is the core resource. At present, App is also taking measures to integrate hundreds of appraisers on the platform to make the identification service more standardized. In addition to manual identification, poison App set up a discriminating team to specialize in the distinction between genuine and fake shoes, and use professional instruments to test the details of materials and manufacturing processes that are hard to identify. In addition, App is trying to establish a partnership with the brand, inviting the brand to enter the platform directly.

Do sports shoes really make money?

Apart from the appraisal service, the base of the two tier market is the primary market (brand retail market).

Li Zhongzhe describes himself as a brand porter. "How to develop secondary sports shoes market depends on the planning of the brand itself. Once the brand is not limited, or the sale is not allowed, there is no way to do business." But at least for now, Li Zhongzhe's worry is not going to happen for the time being. After all, a pair of expensive shoes appears, the brand is the most direct beneficiary.

When capital enters the market, block trading reduces the profit margin of the traditional sellers. For some "retail investors" who are frying their shoes in the stock market mentality, the bet is bigger. Second hand sports shoes are often priced by sellers. High prices and low prices are all possible. Once someone hoarding goods and mastering pricing power and selling them collectively, then retail investors will lose money.

The fact is that neither sellers nor buyers want to see any single trading platform. Platform pumping means that the seller earns less money and the buyer spends more money, and only competition can reduce the platform rate.

Wu Ming sometimes trades the shoes identified by poisonous App through the free fish trade, so that not only does the price seem more favorable and the profit is higher, but the corresponding risk is also higher. The seller is worried that the buyer needs to pay more communication costs for the return and bargaining of the buyer. Wu Ming is not willing to sell shoes that he really likes. He gathered Maddie's signature shoes from 1 to 6 generations, and Maddie's signature. In order to buy shoes that like, even if the price is fired higher, he will "scratch his head".

Although the premium of sneakers is far higher than their own value, Huang Wei believes that there is no bubble in the market at present because the market is expanding. "It is precisely because more and more people enter the market that there will be no bubble." Huang Wei said. There are people who really love sneakers in this market, people who are coerced by brand marketing, and people who want to get a lot of money, but anyway, as long as the brand is still offering limited money, fried shoes will not stop.

The popularity of the second-hand shoe market in China has also attracted foreign platforms. Stock X co founder and CEO JoshLuber has said that it is looking for China's strategic partners, and another overseas platform, Stadium Goods, has already cooperated with Tmall.

Lin Hong collected a number of DunkSB from abroad before, and was about to resell the price difference. He just hit the Jingdong "618" shoes promotion. The original price of 799 yuan shoes, Jingdong sold only 649 yuan after the discount, so that his plan fell empty. He is prepared to wait for the first half of the year to play again, but no one can afford to make money.