Chinese Sneakerheads Turning to Li-Ning and Anta Amidst Nike Scandal
The current Nike boycott in China has left sneaker resellers in a lurch. Only weeks ago, they were making big bucks off of limited-edition Air Jordan’s, and now nobody wants them. Or maybe more correctly, nobody dares to get them for fear of appearing unpatriotic. Instead, almost overnight, Chinese sneakerheads have begun trading shoes from popular domestic brands like Li-Ning and Anta.
60% of Chinese Sneakerheads are GenZ
According to iiMedia’s “2019 Global and Chinese Sneakers Secondary Market Status Analysis and Market Outlook Analysis Report”, in 2019 the global second-hand sneaker market was 6 billion U.S. dollars, of which the Chinese second-hand sneaker resale market has exceeded 1 billion U.S. dollars.
CBNData’s “China’s Trend Consumption Development in 2019” white paper found that, compared with other consumption trends, there are more Gen Z consumers in the sneaker market. According to the report, post-95s and post-00s accounted for more than 60% of Chinese sneakerheads.
Why does this matter? Gen Z also happens to be the consumer group that is most patriotic. Unlike previous generations, they don’t automatically assume that because a brand is foreign, it is better. They are increasingly willing to purchase local Chinese brands and like items that incorporate Chinese design elements.
Resale Prices of Li-Ning and Anta Have Skyrocketed
Since the Xinjiang cotton scandal erupted two weeks ago, Chinese domestic shoe brands like Li-Ning and Anta have reported shortages of popular sneakers. People are lining up at Li-Ning stores to purchase the latest sneakers and basketball shoes, a scene usually seen in front of Nike store.
Online resell apps are also seeing prices of Li-Ning products surge. On China’s most popular sneaker resell platform DeWu (formerly known as Poizon), Li-Ning’s NBA superstar Dwyane Wade endorsed Wow4 sneakers in silver/white have been reaching prices as high as a whopping 48,889 RMB ($7,455 USD). That’s 31x the original selling price of 1,499 RMB.
Part of the same series, the Wow7 The Moment sneakers have been reaching prices of 29,999 RMB ($4,500 USD). That’s nearly 17 times higher than the original 1,699 RMB price tag. According to the app, 270 pairs sold within six days.
Originally priced at 499 RMB, Anta’s popular Doraemon co-branded sneakers shot up to 4,599 RMB on Dewu. While not quite the massive price increase of the Li-Ning shoes, they have been selling like crazy. Nearly 9,000 pairs have been purchased recently.
But Most Sneaker Resellers Are Suffering
On the surface it seems like this shift in consumer spending would be boosting the Chinese domestic brands and economy. However, for those whose livelihood depends on western brands like Nike and Adidas, the situation it’s quite different. Local sneaker store owner Lao Wan has been reselling limited edition sneakers in the secondary market for many years and has become one of the top ten resellers in the country. He said that there is only one word to describe the past few days: difficult! “I can’t eat or sleep, and I cry without tears looking at our full inventory of Nikes and other used-to-be-popular brands.”
Previously, Lao Wan’s store mostly sold Nike, Adidas and sneakers from other international brands. When the business was at its best, annual sales could exceed 100 million RMB. But now store visits and sales are declining sharply. Tens of millions of RMB of inventory is piled up in the warehouse. He conservatively estimates his business will lose a few million RMB in this anti-Nike wave.
Another sneaker reseller who has been in the sneaker industry for many years, said that sports brands generally use future-based ordering methods, and the volume is fixed. When they are sold out, they are gone. Now, shoe dealers are rushing to buy out inventory from domestic brands and holding onto it to drive up the price and demand so they can sell it at high profit.
Moreover, because it is uncertain how long this situation will last, and the market is unstable. Brands are reluctant to increase production and stores are reluctant to increase order volume for fear that demand will suddenly drop. This continued scarcity further fuels this buying frenzy.
