Speculative trading of second-hand sneakers is nothing new in China. The resale market is so extensive that it has turned Dewu, a shoe trading platform, into a tech unicorn (see WiC451; the company was previously called Poizon). But shoe scalpers now have to navigate the political row over cotton production in Xinjiang, which has seen Chinese consumers ditch shoes from brands such as Nike and Adidas. While profits on limited edition shoes from sub-brands like Air Jordan and Yeezy have become less predictable, resale value on sneakers from some of the homegrown brands are rising sharply.
As an example, a pair of Li Ning’s Way of Wade 4 sneakers, named after former NBA star Dwyane Wade, is now available for Rmb48,889 ($7,459) on Dewu. That’s almost 32 times the original sales price.
It’s not just the resales of limited edition ranges that are reporting higher prices.
Newer designs are also seeing rapid price hikes on the second-hand platforms.
One netizen took screenshots of a pair of Li Ning’s Counterflow sneakers she purchased two weeks ago, noting that the style has gone up in price from Rmb469 to Rmb699 on Dewu.
“Bought these sneakers two weeks ago for my boyfriend and in less than half a month they have increased Rmb200. Maybe I should go into sneaker trading,” she joked.
TMT Post is doubtful about the longer term prospects for profits, wondering whether scalpers are increasing their mark-ups as part of an effort to drive up prices artificially across the resell platforms. Some of the highest-priced items haven’t found buyers, either. The Way of Wade 4 sneakers at Rmb48,889 have had no takers so far and the most recent sale of Wow7 The Moment, another limited edition design in Wade’s name, were sold for Rmb8,989, much lower than the asking price of Rmb30,000.
The surge in prices for shoes from Li Ning and Anta has still attracted interest from the country’s state-run media, however.
Xinhua warns that rampant speculation on sneaker prices could result in customers losing trust in homegrown brands and the People’s Daily is calling for a crackdown, saying that shoes are for wearing, and not for speculating on their future value.
“A large number of internet users are choosing to support domestic brands, which is normal,” the newspaper noted. “But some scalpers think they have caught onto a business opportunity, as if they smelled blood.”
An industry insider told Securities Times that local distributors of some of the sneaker brands were profiteering from the ‘buy China’ trend by charging more and increasing supply. On the other hand, some of the main distributors for Nike and Adidas are sitting on hundreds of millions of yuan in inventory waiting to be marked down.
“[Life is] difficult! I can’t eat or sleep. I look at all the stock in the warehouse and I feel like crying,” one distributor complained to the newspaper.
In response to the state media warnings, Dewu released a statement last week explaining that it was removing some of the most overpriced shoes from its site due to their “high price fluctuations”. It also explained that the prices are set by the sellers and not by the platform.
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