No one would’ve ever guessed footwear would become as big as it is today.
What was just something to wear on your feet for protection has become a worldwide commodity, with thousands of budding entrepreneurs making bank in the resale market. With the prices that some of these items are going for these days, it would be an understatement to say that sneakers are a hot ticket to invest in.
The growth of the streetwear and sneaker market
The demand for hot releases can only be explained in a single word: mania.
From camping out for days to staying up late nights to ensure they are able to purchase the newest buys online, people are on the hunt for sneakers. As the surge of supply continues and the demand grows, young people are beginning to look at sneakers as more than just something to wear, but as an investment in itself.
With the streetwear and sneaker industry valued in the billions, people are scrambling to find the right options to throw their money into in hopes of a return. Brands like Nike and Adidas are only pushing this narrative, as they continue to pump out more items out, increasing the overall market share of the industry
To put things in perspective, the estimated total value of the streetwear industry saw a 157% increase in 2017. By 2019, just two years alone, the industry was valued at US$309 billion. This growth is evident with sneakers as well, as the athletic footwear market was estimated to be worth US$95 billion by 2025.
How sneakers are becoming an alternative asset
These days, the value of sneakers is not inherent in their design and material alone. Today, the demand comes from their value in the marketplace. Sneakerheads are willing to pay a lot more than retail, and often times, hot releases are worth buying for their resale value. In other words, sneakers have become a form of social currency.
In fact, analysts at Cowen Equity Research believe that sneakers are turning into an alternative asset class. In their report, Ahead of the Curve Series, they looked at how digital growth and shift of dynamics of distribution have played a major part in the huge growth spurt of sneakers.
“We propose the idea that sneakers are now an emerging alternative asset class that for one, earns illiquidity premiums; provides diversification – non-correlated with traditional asset classes; and finally earns favorable risk-reward characteristics.” — Cowen Equity Research analyst
In modern marketplaces, it is common for sneakers to reach a price point of US$500 in an open market with a bidding option. This means that collectors, especially young adults, are choosing to forgo their collection’s pieces as a status symbol, and willing to let them go for the cash.
The theme of resale has scaled across the retail ecosystem. Furthermore, the international secondary market expansion also illustrates another reason for the vast market growth. All of this, along with increased spending by Millenials and Gen X — the primary consumers of sneakers — have created new markets and opportunities for growth. This has pushed the estimated value of the sneaker market to US$30 billion or more by 2030.
The future of the sneaker community
The most fundamental characteristic of what defines a free market is competition. Whenever new competitors step into the ring, there is an increase in overall quality, demand, and capitalization of the industry.
This is exactly what is happening with Nike and Adidas.
As one gets released, the other throws out another. Involving athletes, musicians, and pop culture stars into the mix is evidence that the sneaker industry is on a continued rise. Examples like Michael Jordan’s Nike deals or Kanye West’s Yeezy line landing both into the billionaire spot is proof alone that there is an insanely huge pool of wealth to dive into when it comes to sneakers.
As this persists into the future, we can expect to see the community change, with platforms like Novelship playing a huge part in helping the market grow. With more than 200+ satisfied customers, we help new and existing sneakerheads buy and sell sneakers with ease, connecting the culture.
