The global secondary market for athletic footwear is booming, valued at a staggering $10.6 billion, with a trajectory set to skyrocket to $51.2 billion by 2032. Despite these projections, recent trends point to a slowdown, with eBay’s sneaker sales plummeting by over 30% and average prices dropping by 16% in just a year. This slowdown is reshaping the industry, pushing businesses to diversify and signaling a potential market correction. Will this herald the end of the golden era for sneaker resales, or is it merely a bump in the road?
The Rise and Stall of Sneaker Resales
Once a niche market, sneaker reselling has evolved into a multi-billion dollar industry. Sneakers, in the not-so-distant past, outperformed traditional assets, providing lucrative returns for investors and aficionados alike. However, the market has hit a snag. Despite an impressive Compound Annual Growth Rate (CAGR) forecasted at 16.4% leading up to 2032, the recent slowdown has sent ripples of concern through the market. Resellers and investors alike have seen returns dwindle, with the average investment return on over 100 popular sneaker models dipping into the negatives, a stark contrast to the buoyant profits of the previous year.
Industry Hurdles in a Post-Pandemic World
The industry faces new challenges in the post-pandemic landscape, with the cost of living on the rise and discretionary spending on apparel taking a hit. Additionally, manufacturers like Nike are intensifying their battle against bots that facilitate bulk buying, blocking billions of attack attempts monthly. This crackdown is reshaping the sneaker buying experience and impacting the resell market’s dynamics. As a result, intermediary companies are re-strategizing, broadening their services to mitigate the impact of these market shifts.
The Evolving Sneaker Culture and Economy
Despite the market’s current volatility, the sneaker culture remains robust, with a massive global following. Air Jordans, for instance, still account for a significant portion of Nike’s revenue, even as their market share shows signs of decline. Moreover, the sneaker market’s influence extends across continents, with strongholds in the USA and Europe, and a rapidly growing presence in Asia. The value of sneakers continues to be defined by rarity and brand collaborations, such as the highly coveted Nike x Travis Scott releases.
Moments That Define the Sneaker Resale Market
Key historical moments have shaped the sneaker resale scene, such as the release of the limited-edition Nike “NYC Pigeon” by Jeff Staple. This release, limited to a mere 150 pairs, incited chaos in New York, capturing media attention and skyrocketing in value overnight. Such events have contributed to the sneaker market’s speculative nature, which now appears to be undergoing a correction, posing risks for newcomers and signaling a potential end to the market’s explosive growth.