The Chinese millennials making a killing trading Air Jordans, Adidas’ Yeezy trainers online

One of the hottest commodities in China right now is a pair of trainers.

The SoleFly x Air Jordan 1 in black patent leather rocketed in value by 6,600 per cent to a high of 75,999 yuan (US$10,740) on the online marketplace Nice after its release in December. Only 223 pairs of Nike’s retro high-top were made for sale, according to online magazine Sneaker Files.

The model is among the most profitable trainers traded on the exchange created by Beijing-based Nice App Mobile Technology. Such outsize returns are hard to come by, but they’ve nonetheless caught the attention of trainer-fans like Lei Xiaoming, 20, a mechanical engineering student in Huangshi.

Lei has collected limited-edition shoes for years but only started investing in them in April.

“Prices were surging so much I thought it would be a better choice to sell them rather than wear them,” he said. “It’s more exciting than trading stocks.”

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Since then, he’s spent about 200,000 yuan buying more than 200 pairs – mostly Air Jordans and Adidas’ Yeezy line, a collaboration with rapper Kanye West. He’s earned profits of about 100,000 yuan by reselling some, he said.

Across China, more than 10 million monthly active users frequent online-resale apps, such as Poizon, Nice and DoNew, according to Chinese data-mining company QuestMobile. While many products suffer from the effects of the trade war, pairs of collectible trainers are flying off the shelves, and that’s attracting the attention of US sneaker exchanges like StockX and GOAT.

Most of what’s traded on these platforms are basketball trainers – a testament to China’s love of the sport, even as the NBA faces backlash for a Houston Rockets executive’s tweet appearing to support Hong Kong’s protests.

The buzz over shoe reselling made a unicorn out of Poizon, developed by Shanghai Shizhuang Information Technology. In April, funding from Digital Sky Technologies vaulted its valuation to US$1 billion, according to CB Insights. 

China’s trainer-resale market exceeds US$1 billion in value, said Scott Cutler, chief executive officer of Detroit-based trainer exchange SoleTrade, known as StockX.

Chinese investors have long speculated in alternative assets, including cryptocurrencies, fiery liquor from Kweichow Moutai, and garlic.

Now, trainers – known as sneakers in the US – have their attention. Unlike Chinese stocks, which can only move 10 per cent in either direction, there’s no cap on shoe returns.

“As with all frothy assets, there’s no telling where the peak is,’’ said Yu Yingbo, investment director at Shenzhen Qianhai United Fortune Fund Management. “As long as there are high returns, there is going to be money chasing them.”

Trainer collecting went mainstream in the US after Nike launched Air Jordans in the 1980s, and the trade went digital with eBay about a decade later.

Today’s technology makes the trade more sophisticated. Apps collect bid and ask prices, chart costs and volume in real time, and allow users to share investment advice. Some also let customers buy coupons that can be traded for shoes before coveted models arrive – in effect selling trainer futures.

Now more-established trading sites in the US want a piece of the action in China.

StockX plans to introduce local payment and language support this year, said Cutler, previously the head of global listings at the New York Stock Exchange. China already comprises about 10 per cent of StockX’s transaction volume.

Culver City, California-based 1661’s GOAT launched a mini-app on WeChat in July after receiving US$100 million in funding from Foot Locker.

“China will soon become the sneaker capital of the world,” said Henek Lo, general manager of GOAT China. The demand from Chinese millennials is “something we haven’t seen anywhere else.”

Significant rewards are typically accompanied by significant risks, and trading in trainers is no different. Of more than 2,600 collectible models sold on Nice, 56 per cent lost value, according to company data. Only 0.4 per cent of footwear saw returns of more than 1,000 per cent on the app.

But Tian Hao, 27, is convinced he’s cracked the code. These days, his 90-square-metre (969-square-foot) Beijing apartment mostly serves as storage space for his inventory, which he estimates to be worth hundreds of thousands of dollars. 

There’s hardly any space to walk around in his living room, where hundreds of shoeboxes are stacked up on the sofa, TV console and coffee table.

As Tian runs low on space, he’s stashing trainers with a friend. In return, Tian helped him invest 260,000 yuan in sneakers. After splitting the profits, they each cleared 90,000 yuan in two months.

“This is one of my luckiest investments this year,” Tian said. “My friend can’t stop admiring me.”