Chinese office worker Fan remembers when she carried both high heels and sneakers to work, how much her feet hurt after a long day of work on the heels and how her beloved sneakers saved the day.
Fan works as an HR Consultant in a tech firm in Beijing, she said she now wears sneakers in the office. “I can’t remember when it first started, but (wearing sneakers at work) definitely become more popular in recent years.”
Fan said fashion bloggers influence her choice of fashionable sneakers the most, and she shares the styles on her WeChat account. As she became more comfortable wearing sneakers inside and outside of work, Fan became more willing to spend upwards of $200 on each pair of shoes.
A report by Chinese consulting firm Zhi Yan, Industry Analysis and investment prediction of Chinese footwear market from 2018-2024, pinpoints the start of the great sneaker boom to be as early as 2014, predicting that by 2020, the sports-inspired footwear and apparel market will grow to 246.7 billion yuan ($38.6 billion). The sales of sneakers are predicted to outgrow sports apparel by almost 3% by 2020.
The stylish sneaker trend is starting to have an impact on the sales of footwear from traditional luxury brands. Analysts from investment bank RBC Europe wrote in a recent report that, “The casualization trend is benefiting categories like sneakers and down jackets at the expense of formal wear/formal shoes.” Last year Euromonitor pointed out that the high-end athleisure market is forecast to overtake China’s luxury market by 2020.
On luxury e-commerce platform OFashion, there is very little difference between the price of sneakers by luxury brands, and sneakers by traditional sportswear labels. For example, a pair of Adidas Yeezy Desert Rat 500 is marked at 3149 yuan ($492.8), Gucci’s Ace embroidered sneaker sells for 3880 yuan ($607.28), Air Vapormax Off White is 5090 yuan ($796.66), and Balenciaga’s Speed Signature Mesh Sock Sneaker can be purchased for 4980 yuan ($779.39).
Although this competition may not be good news for luxury brands, the impact it has brought on the sportswear industry is positive, allowing sneakers to be sold at a higher price and with a higher product margin than ever before. According to Erwan Rambourg from HSBC, this is, “the luxurization of sneakers”.
Gildo Zegna, CEO of Italian luxury fashion house Ermenegildo Zegna, attributed the rising price of sportswear sneakers to their rise in emotional value, “If there is one product today that is impulse driven and creates emotions among consumers, it is the sneaker (…) you are talking about people spending $100 to $700 on a single pair.”
Higher pricing has enabled sports brands to share the driving seat with luxury brands. Yet more alarming for luxury brands is a new culture of sneaker exchange – partially driven by emotions and impulse. Young consumers are viewing purchasing of limited edition sneakers in a similar way to that of a Birkin bag – many hold immediate investment value and can be auctioned for much higher prices.
Stock X, a trading platform designed to make sneaker exchange easier, allows buyers to put their sneakers up for auction, and others to buy in real time just like exchanging stocks. Users get their own sneaker portfolio, and track the value of their collection over time, comparing it to others. Two years since the platform was founded, Stock X regularly exceeds as high as $2 million sales a day – approximately 12,000 transactions. On Stock X, the option of shipping to China is now available, and as Fashion Network reported early this year, the company is moving towards further expansion in China.
It’s hard to say how much crossover there is between sneakerheads and luxury buyers, but the healthy growth of both industries are being heavily fueled by young millennials. As the growth of streetwear consumption in China surpasses other fashion industries, the increasing exposure to urban clothing will make consumers open to the option of investing in a pair of higher-priced sneakers.
Meanwhile, the changing structure has led brands to think twice about their production strategies. Paul Andrew, the creative director of Italian brand Salvatore Ferragamo, said in an interview with W magazine: “People wear sneakers so much now that the architecture of the foot has really changed. Italian shoemakers often use casts that are 30 years old, but feet today have become more spread out.” Now he adds a pad made out of memory foam to all of his shoes.
By Ruonan Zheng
This article was originally published on Jing Daily, a content partner of TheCurrentDaily: Upscaling of Sneaker Brands Threatens Luxury Fashion