Secondhand Sneakers: A Subculture and a Business You'd Never Expect | QDaily Anthropology

Nike spent 29 years building this secondary market. Now it is changing fast.

David, a Hong Kong man, spent the whole afternoon of August 26 running a stall on a patch of bare floor. He was drenched in sweat, dressed as if he were about to run onto a basketball court and play a full 48 minutes. Around him sat a dozen or so shoeboxes, limited-edition Air Jordans he had collected over the years and was waiting to resell. On one box lay a sheet of paper with a line in English: "Looking for a pair of AJ1s, the 2015 OG retro — call me! I'm David-zai."

Sneaker Con, the biggest sneaker-trading show in the United States, was making its first appearance in Asia, at AsiaWorld-Expo near Hong Kong International Airport. By the organizers' rough count, about 6,500 people came — 40% from Hong Kong, 30% from mainland China, the rest from elsewhere in Asia.

More would probably have come had Typhoon Hato not hit Hong Kong two days earlier — the city's first No. 10 signal in five years, which grounded flights across the board.

For a HK$233 ticket you could spend the show's seven hours looking at the rarest shoes in the scene, any pair of which would sell out the instant it was restocked. Even without a formal table, which cost HK$1,500, you could bring your own collection and, like David, set up for free on the floor of the Trading Pit and swap with other collectors.

Sneaker fans, or sneakerheads, have their own code for talking to each other; recognizing a shoe on sight and knowing its backstory is basic homework. Xiao Yunfu came to cover the gathering for the Beijing sneaker outlet Ulsum. He told QDaily: "That Ray Allen player exclusive over there is amazing, and the Chris Paul one, and the dark blue Nike Zoom Kobe V 'Laker Scoring Title' — they're all One of One [the only pair in the world]."

"This show is badass — it's the Paris Fashion Week of the business." Su Xinyu, a 21-year-old sneakerhead, ran a one-man sneaker media account called Beijing-Sneakerhead before joining the Taobao store Delong Sports. "I sold a Kryptonian today, about 13,000 yuan. An Indonesian guy got in somehow while we were setting up this morning and haggled with me for hours."

The "Kryptonian" is Nike's 2009 limited-edition player exclusive made for the NBA guard Nate Robinson. It retailed for 1,750 yuan, and only 80 pairs were released nationwide; the resale price has since risen eightfold. Delong Sports had five of the fluorescent green Kryptonians on its table, including a pair signed by Nate Robinson that was for display only. "The boss picked them up one at a time," Su said.

Most sneakerheads fell in the way Su did: "I became a sneakerhead because I started playing basketball at school, and that's how I got to basketball shoes." Zhang Long, editor-in-chief of the sneaker outlet Long7, once described the bond among sneakerheads to QDaily this way: "I think of it as a channel — like those classes where housewives learn to bake a cake. Is it really about teaching you to bake a cake? Not really. It's about getting you to meet people."

A few of them go on from enthusiast and collector to reseller or sneaker-media figure, and they usually believe they are helping shape the culture.

As Apple fans are to Apple, sneakerheads willing to pay several times retail for a limited pair are the core customers of the sportswear brands, and the new Jordans that drop every Saturday at 9 a.m. are the currency the scene runs on. Thousands of pairs go on sale and turn up at once on the shelves of private sneaker shops, on eBay and on Taobao, marked up by anything from a few hundred yuan to several times retail, depending on how far demand outruns supply.

In the United States alone, according to 2015 figures from the resale site StockX.com, this huge secondary market was worth as much as $1.2 billion: about 9 million pairs resold a year, producing $380 million in profit. Starting with the iconic Air Jordan 3 Black Cement, Nike spent 29 years writing the rules of this group's game. In the words of StockX.com chief executive Josh Luber: "It's all supply and demand."

Sneaker Con was built for exactly this subculture. Buyers here far outnumber sellers, and the crowd is overwhelmingly male — a sharp contrast with the crowds of young women queuing next door on August 28 for a G-Dragon concert.

In 2009, the Russian-American brothers Alan Vinogradov and Barris Vinogradov, who grew up in the United States, joined with Yu-Ming Wu, a Chinese-American whose family comes from Taishan, Guangdong, to hold the first Sneaker Con at an arts center on Times Square in New York. A ticket cost $10, a table $100, and more than 1,000 people came in from Westchester, Long Island, New Jersey and elsewhere.

Before the idea came up, the Vinogradov brothers ran a limited-edition sneaker site in New York, osenaker.com, and Yu-Ming had founded the well-known sneaker outlet SneakerNews, whose Instagram account now has 6.5 million followers. A mistaken link on one of the sites was what made them realize their offices stood three blocks apart.

In an interview with QDaily, Alan said he does not really agree with Josh Luber's comparison between the sneaker world and the stock market. "Gold is gold, you know it's expensive. Gas is gas, you put it in your tank. But sneakers are a culture, not a commodity."

He went on: "Reselling is part of sneaker culture. Anyone who denies that doesn't understand sneaker culture. Like Instagram, like retail stores, reselling is a very important tool. Resellers are the left and right arms of the sportswear brands' marketing."

"As long as they're not selling fakes, I have no problem with it."

Alan has been reselling sneakers since 2003. Back then, he said, Americans still thought it was a bit shady; today a reseller in America is cool. "You're the boss."

As he said this, the show's invited guest, the retired NBA star Ray Allen — "Gentleman Ray" to Chinese fans — was meeting fans a few steps away, setting off waves of cheers.

Besides Ray, Alan had invited several popular YouTube sneaker vloggers, Qias Omar among them. He described his secret for running Sneaker Con as "a network of relationships nobody else has."

Access — to special channels and special shoes — is also how rank is settled among sneakerheads.

At Sneaker Con the priciest shoes, the ones their owners guarded most closely, were usually samples that had leaked out of the factory through illegitimate channels. At the table of the Mong Kok store Kix Dreams you could find one of only three AJ11 "Cool Grey Low" samples in the world; Michael Jordan holds the other two. At SoleAddictt UNDS you could see a Nike Dunk Low SB "Freddy Krueger," a shoe never officially released. The most expensive sample in the hall was a Nike LeBron 6 Stewie Griffin Sample PE, priced at $35,000.

The Off-White x Nike AJ1, announced on August 23 and not yet on sale, had drawn wide attention, and it turned up at the table of the Taobao store Liaoyuan Sports. Plenty of people asked the seller where it came from and what it cost. The answer was: "Not for sale."

Alan's reading is that people are paying for the thing "somebody else can get and I can't." A limited pair stands for access, and for authority.

Anyone who can get shoes before they officially go on sale is called a "channel king" in the trade. It is hard to call that praise, because such shoes usually come from theft inside the brand itself.

The worst case came in April 2014. FBI agents raided the home of Tung Ho, a former product-promotion manager in Nike's basketball division, and seized 1,941 sample pairs and several hundred thousand dollars in cash. For the eight years before the investigation, Tung Ho and Kyle Yamaguchi, who had held the same job before him, had used their positions to order sample shoes from Nike's factories in China, ship them to Nike headquarters in Oregon, and sell them on to resellers.

"2012 to 2014 was a peak for Nike. Everybody played and played until they reached the top tier, which is these samples — the highest prices and the rarest shoes."

The man telling us this story is Wu Mingdanyang, born in 1993, who uses his English name, Jerry, more often than his Chinese one. Jerry went to the United States to study in high school and was shaped by sneaker culture there. Since college he has been to nearly every Sneaker Con, either selling or buying. "I'd pick up a lot every time, 80 pairs, 100 pairs. That's how I got to know Alan." Now Jerry is part of the Sneaker Con team, sitting in the "free authentication" area in the middle of the hall, telling buyers whether their shoes are real.

"A lot of the time you have to have seen the fakes to know what they look like." Jerry, in a Supreme cap, was going over a pair of Yeezy 350s, first pressing hard on the Boost sole, then folding back the tongue to check the label. "On fakes the label usually sits a little crooked."

The pair had been brought in by a Korean boy who looked no older than 16, with a group of friends around him. Told the shoes were real, he looked very pleased and shouted at Jerry: "Can you say legit for me?" The word, which means lawful, means genuine in the sneaker world.

Jerry thinks Nike's red-hot secondary market has been sliding since 2014. When samples that resell for 20,000 yuan are everywhere, a newcomer has little chance of becoming a top collector quickly. According to figures from Josh Luber, Nike held a startling 96% of the secondary market as of January 2015, against 1% for Adidas; two and a half years later, Adidas was at 45%.

Deon Point, creative director of the American streetwear store Concepts, said in a recent interview that Yeezy's run is still at an "early stage": it has yet to make big changes to its surfaces, materials or colors, so there is a great deal of room to grow.

One thing was plain at Sneaker Con: sneakerheads under 20 tended to walk past the Jordans in the glass cases without a glance. Yeezys were what they crowded around. One table selling nothing but Yeezys was run by a few Hong Kong kids born after 2000, under a bold sign reading "We buy all Yeezy." The boss in charge was 15.

Yeezy gave newcomers a way in, and with new money on the table the market grew bigger and wilder. Allen Kuo, a Chinese-American "supply king" who went viral on American social media this year, got hold of 80 pairs of Yeezy 350s before release. In a media interview he said he was not a sneakerhead who loved sneakers at all; he just wanted to make money. Another outfit, Yeezy Mafia, says it is made up of "sneaker resellers with computer skills." They always seem to know Yeezy release stock in advance and to land large supplies; their site shows a padlock and the words "members only."

When NMD releases were at their hottest, a fair number of resellers made real money. "I remember it clearly. I had someone in Korea grab a few dozen pairs in the Tokyo colorway for me — bought at 1,800 yuan, flipped at the market price of 2,100," said Guan Molong, who had come up from Shenzhen to see the show. "The ones who made the most were a few Korean buyers. There was an exchange student there who bought a Maserati in three months."

Guan Molong, 32, now runs his own resale business on WeChat. He has a members' group of about a hundred agents; pay 188 yuan to join and you may buy stock from him.

Before this, Guan was a PE teacher, and he came to sneakers the way most fans do. Last year a friend introduced him to a "channel" — the man in charge of restocking at a Hong Kong sportswear retailer — which let him buy shoes very cheaply. "Early this year a Nike clearance store opened near my place. There are only five in the whole country." With his family's logistics company warehouse to hand, he can hold about 2,000 pairs in stock, and at peak his sales have reached 1 million yuan a month, close to a Nike retail store.

"Nike and Adidas have been at war these two years. A lot of products used to take three to six months to get pushed down to the discount stores; now it's basically a month. They can't clear the shelves. A pair of running shoes at two or three hundred yuan is about the same price as Li-Ning or Peak, but you're wearing Nike."

Every time the seasonal discounts come, Guan buys in bulk. He posts about 20 "new arrivals" a day to WeChat Moments, and claims the lowest prices online, lower than Taobao.

Changes on the internet have hit these resellers harder than you would think. As Taobao's traffic concentrates in the big stores, the small ones have less and less room to breathe. Jerry has decided to close his Taobao store. "Take the red-and-black 11. I list it at 2,900 yuan and a big store sells it at 4,000 — and still sells it. There's nothing you can do."

In the extreme case, many high-traffic Taobao stores need no physical stock at all: once a customer shows up, they can pull the shoes quickly from smaller shops. Such a store is called a "koufanzi," a mouth dealer, and the goods it pulls in are "kouhuo," mouth goods.

The risk of sourcing this way is that the supply chain is opaque, and fakes slip in all the time.

"If those big bulk orders were real inventory, you'd be dead," Guan said, and did the arithmetic. Two thousand pairs of a common model at 300 yuan each is 600,000 yuan. "Think how many styles Jordan has. Would you dare stock them? The market is bad now. Every big store is run like a listed company. Multiple shareholders."

Mak Chun Nam, who owns Kickscrew, the show's biggest sponsor with ten tables, said business had been poor. "Jordans used to sell a few hundred or a thousand yuan above retail the moment they dropped. Now everything goes out at a discount." Kickscrew, nearly five years old, sells through Taobao, Tmall Global and its own site. "We're just waiting for Double 11 and Double 12. We've got forty or fifty thousand pairs still unsold."

When Jordans are slow and get marked down again and again, resellers have nothing to compete on but price, and out of that they have worked out a sales method that looks like gambling.

Take a shoe that has just gone up on Nike's official site. A reseller will sell it at 30% off immediately. "You put the money in first, then when the official site drops to 40% off you place another order, and return the full-price one under the 30-day return policy."

Some analysts believe Nike must now slow the pace of Jordan retro releases if it is to stop the slide in the secondary market. Its recently announced Off-White collaboration is widely read as a shot in the arm.

"Nike's sales rely so heavily on the influence of NBA stars. Tying itself to a designer who has a hot fashion label right now is a great move," said Adam Padilla, co-founder of the brand consultancy Brandfire, in a recent interview with the streetwear outlet Hypebeast.

But look closely at the thinking behind the collaboration and you can still feel that the ten pairs Virgil Abloh rebuilt lean on the technology and design system the sportswear brand already has, rather than creating a wholly new style the way Yeezy did.

The sneaker world is expanding fast, and reacting violently as it does. Newcomers and old hands differ in taste, in how they dress, in where they get their information. Song Qian, who owns a property-management company and has collected more than 50 vintage pairs, told QDaily he had come purely to show his collection. "The most expensive pair cost 16,000 euros." He had hoped to find people who shared his tastes. He did not.

Alan Vinogradov said they are planning to take Sneaker Con to more markets abroad, because compared with eight years ago, "the biggest difference is that the borders of sneaker culture are gone." New York is no longer the center of the world; a pair worn by a Chinese celebrity can be bid up on the secondary market overnight. "Today when people think about sneakers, they say the United States and China are the biggest markets." Last year Sneaker Con went to London for the first time. Next year Beijing, Shanghai, Guangzhou and Cologne are all under consideration.

As the show wound down, David said he had sold one pair, a Russell Westbrook Why Not, for HK$2,000. Counting the ticket, the day had not made him much, but he still looked happy — whether because his floor stall had drawn a crowd of onlookers, or because he had met far more fellow enthusiasts than usual. With luck, somebody might still call him.

Cover image from SneakerNews