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Fashion

Sneakers Are An Emerging Alternative Asset Class

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Fashion

Sneakers Are An Emerging Alternative Asset Class

Sneaker collectors say they are drawn to the versatility of the footwear and its association with celebrities.

by Kamaldeen Batcha  /   September 8, 2021
sneakers investment

The Nike Dunks and Nike SB Dunks have been on every sneakerhead's radar for the past two years. Credit: Richard Xia

A pair of prototype Nike Air Yeezy 1 that rapper Kanye West wore to the 2008 Grammys fetched a staggering US$1.8 million (S$2.46 million) at a private sale hosted by auction house Sotheby’s in April. There is a reason for its astronomical price – West is among the most influential sneaker and clothing designers, and the Air Yeezy 1 is his first signature sneaker with Nike.

It is not the first time sneakers have been sold for eye-popping prices. In August last year, a pair of trainers worn by basketball legend Michael Jordan at an exhibition game in 1985 fetched £460,000 (S$860,000) at an online auction.

sneakers investment
Credit:New Balance

JoeFreshGoods x New Balance sneaker which launches on September 10 at Dover Street Market Singapore and its e-shop features a colourway inspired by dirt, grass and sky as an ode to the great outdoors.

Sneakers are a huge revenue spinner in the fashion industry. According to market and consumer data specialist Statista, total revenue for the global sneakers market was approximately US$70 billion last year and is expected to hit US$102 billion by 2025. Investment bank Cowen & Co describes sneakers as “an emerging alternative asset class”, one driven in part by multiple digital platforms and insatiable demand from millennials.

Sneaker collecting as a sub-culture started in the United States in the ’80s, fuelled in large part by basketball icon Jordan and his line of Air Jordans as well as the growing popularity of hip-hop. By the ’90s, it had gone global.

sneakers investment
Credit:Louis Vuitton

Expect demand for the Nike Air Force 1 sneaker collab with Louis Vuitton for Spring 2022 to be off the charts.

It was his love for sneakers that drove Singaporean Richard Xia, 30, to co-found Novelship – a marketplace to buy and sell sneakers – in 2017 with his friend Chris Xue.

He noticed that Singapore was not a prime location for the hottest drops from big players like Nike and Adidas. And sites like eBay charged high international shipping rates. On top of that, enthusiasts also have to grapple with unscrupulous dealers peddling fake goods. This led him to set up Novelship, which helps sneaker lovers navigate the minefield of the resale and secondary market.

READ MORE: Novelship Is The SG Online Marketplace Every Sneakerhead And Streetwear Collector Need To Know

Today, Novelship is Asia’s fastest-growing marketplace for authentic sneakers, apparel and collectables. The company employs about 60 people and has five processing centres and a presence in six markets. Its monthly revenue is north of $3 million. “The demand for high-end sneakers is growing in Singapore. The kids of 10 years ago have some money in their pockets now and they are buying what they like,” says Xia, who is chief executive of the company.

sneakers investment
Credit:Richard Xia

Nike Air Jordan 1 Retro High OG “UNC To Chicago”.

Novelship introduced a mobile app in July with a more intuitive interface and a better search experience. The app also has extra features such as “instant delivery”, which allows buyers to store their goods at Novelship’s premises so that they can resell the merchandise more conveniently.

Novelship also has a presence in Malaysia, Indonesia, Australia, New Zealand and Taiwan, but Xia says the surge in demand for hot sneakers is highest in Singapore, contributing to one-third of the company’s annual revenue. This, he believes, is due to the influence of the global hip-hop scene on young Singaporeans.

READ MORE: A Sneaker Enthusiast And Marketing Executive Shows Us Her Grail-Filled Collection

He says: “When you see your idols like Kanye West, Pharrell Williams and Travis Scott not only repping sneakers but also collaborating with huge brands like Nike and Adidas, it makes sense that you would want to buy them. “The sneakers are not only items you can use to express your individuality and fashion sense, but you also have a connection with the history and story behind them.”

The K-pop wave sweeping through the world has also fuelled demand. Xia says: “Hip-hop has also manifested itself in the K-pop scene. You see stars like G-Dragon and BTS tapping this sneaker culture and releasing collaborations of their own.”

Ahead, we get up close with some avid sneakerheads from Singapore.


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Louis Vuitton Just Showed A Nike Collaboration

Fashion Files Collectors Edition: A Sneaker Enthusiast And Marketing Executive Shows Us Her Grail-Filled Collection

https://www.femalemag.com.sg/gallery/fashion/sneakers-investment-asset-collectors-in-singapore/
Sneakers Are An Emerging Alternative Asset Class
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A self-professed “sneakerhead” – a colloquial term to describe sneaker enthusiasts – Richard Xia, 30, co-founder of online sneaker marketplace Novelship (pictured here with chief operating officer Chris Xue on his left), has more than 100 pairs in his collection. His passion for sneakers stemmed from his love of streetwear.

He says: “Back in 2010, I really liked the look of Bape clothing. Rappers like Kanye West and LilWayne were also huge ambassadors of streetwear and even repped the label.” But then, it was extremely tough to find Bape clothing in Singapore.

He went to Tokyo during winter and queued at a store in Shibuya from 5am in an attempt to buy a piece. “I think I waited almost 20 hours. But when I reached the front, I was told that the pieces were sold out,” he recalls. “This just made me more desperate to buy its clothes. So the next time I queued, I went at 4am.”

He then wanted the shoes to complement his streetwear. So he invested in his first pair of sneakers, the much sought-after Air Force 1s by Nike. Although it was launched more than 35 years ago, it is among the best-selling shoes of all time, its popularity fuelled by the versatility of its plain white on white colourway and silhouette.

Novelship
image

Collector Lim Rui Ming, 25, was one of the lucky few who snagged a highly coveted Nike Dunk release last year. This was before the label collaborated with hip-hop superstar Travis Scott on the Nike SB Dunk Low Cactus Jack in February last year.

The graphic designer has been a sneakerhead since his days as a basketball player in secondary school. “In those days, the crazier your shoes, the more serious a player you appeared to be. Wearing my Kobes made me feel more natural when shooting the ball,” he says.

He got his Off-White x Nike Dunk Low, nicknamed Michigan, last year. Released in December 2019, the collaboration paid homage to the Dunk’s origins, taking its cue from the Be True To Your School release. Its gold leather colourway with midnight navy overlays was inspired by the colours of University of Michigan, one of the original seven colleges that were represented in the Dunk lines in 1985. Its retail price was US$170 in 2019, but by the time Lim got them last year, they were going for $800 on the sneaker market.

He says: “My friends called me crazy for dropping that much money onto these shoes. But the price was irrelevant to me. “Everything about it spoke to me. It is the highlight of my collection. From the second set of bright orange laces on top of the main laces to the classic Off White labelling, everything screams legendary. “So I knew I had to splurge.”

Lim says: “Nike’s Dunks and SB Dunks have seen a shift from regular street shoes to works of art over the years. “For instance, quite recently, a pair of Nike SB Dunk Lows named Paris became the highest-selling sneaker in online reselling market StockX. I think it sold for more than US$50,000.

“Its rarity, aesthetics and story made it a work of art you can wear on your feet. So, the price slowly starts to make sense right?”

Lim Rui Ming
image

While the culture, design and history are key reasons for many young Singaporeans to get into sneakers, Fariz Abdul Hamid says it is the camaraderie of the community that reeled him in.

The Singapore Institute of Management undergraduate says: “Initially when I wanted to get some regular pairs, such as my first pair, an Adidas NMDs in black, I did some research. “That is when I found huge communities in Reddit, WhatsApp, YouTube and group chatting platform Discord that centred on copping sneakers.

“Nowadays, I find myself most active on Discord. The people are extremely accommodating to requests and questions as sneakers can be very confusing with model names, naming conventions and collaborations.

Fariz Abdul Hamid
image

Yeo Yong Lun, 26, has been interested in sneakers since he was young due to his love of basketball and hip-hop.

In 2017, he entered an online raffle by Swedish sneaker and streetwear retailer SNS (Sneakersnstuff) hoping to score himself a limited-edition collaboration – an Air Presto called The Ten, which was a collab between Nike and luxury fashion label Off-White. Off-White is founded by American designer Virgil Abloh. Yeo won the raffle.

Because of the shoe’s limited numbers and link to Abloh, its price in the secondary market prices went up to more than five times its retail price of US$160 (S$218). So Yeo sold his pair and took part in more raffles. Today, the Nanyang Technological University graduate has a collection of almost 30 pairs of shoes that he wears in rotation.

He says: “What attracts me to these sneakers is their mix of utility and novelty. At their core, they are still pieces of wearables. This is why I keep a small collection and rotate my shoes daily so that I can wear every pair at some point.”

Now, to help other young sneaker enthusiasts, Yeo coruns CookBeast, a Discord-based community that provides reliable information on releases, and cyber tools like shop monitors and other cyber tools. It is a “cook group” – slang for sneakerhead cyber communities – that simplifies the buying and selling process.

Some of the more premium cook groups, such as CookBeast, offer their services and features for a subscription fee. Their customers are informed of upcoming premium releases and get a foothold in securing the hottest drops.

A version of this article first appeared in The Straits Times 

Yeo Yong Lun
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