Forget stocks, real estate, even cryptocurrencies -- China's hottest investment nowadays may be the Nike, Adidas, and Puma basketball shoes that "sneakerheads" fight to get their hands on.
Enthusiasts worldwide have fuelled an expanding bubble in high-priced sneakers, often limited-edition collaborations between big names in sportswear and fashion, rappers or athletes. But in China the craze is at fever pitch, with devotees driving soaring trading volumes on online "sneaker exchange" platforms, prompting warnings from authorities about dangerous speculation as resale profits approach 5,000 percent.
How did we get here?
The craze's appeal owes to two main factors. NBA stars like Michael Jordan have been idolised for years in China, where basketball is arguably the most followed sport, and the associated streetwear culture finds a huge and growing market. And with Chinese authorities limiting individual stock-market price movements to contain volatility, sneakers are embraced by younger investors seeking quick profits in a commodity they can relate to.
More than exchanges
The phenomenon is spurring quick growth in Chinese sneaker-trading platforms like Poizon, whose annual volume is around 15 billion yuan, according to Chinese tech consultancy iiMedia Research. That is more than triple the volume of StockX, a leading US platform
World takes notice
Platforms like Poizon and Nice also have attracted hundreds of millions of dollars in investment from foreign and domestic venture capital, according to Chinese media reports. The global market is taking notice. StockX rival GOAT launched an app-like mini-programme on leading Chinese messaging platform WeChat in July. StockX executives say they also are crafting China plans.
But watch out for the risks
The Shanghai branch of the central People's Bank of China issued a warning last month about the financial risks of excessive sneaker speculation, and government-controlled media portray the phenomenon negatively. "The stock market is risky and the property market is frothy, so investors are switching to speculation in the consumer sector," said Zhang Yi, chief analyst with iiMedia Research.