US sneaker dealer discovers niche market in China via online platform

NEW YORK - Buying limited edition sneakers has never been this easy for Chinese basketball fans.

"I don't have to ask friends who travel to the United States and Europe to look for rare sneakers for me anymore. All I have to do is to go on Stadium Goods' Tmall store and buy whichever pair I like," said Pan Fei, a sneaker collector for years.

Sneaker collecting is a subculture involving a minority group of people, dubbed "sneakerhead," who are fans of basketball or other sports. The culture first emerged in the United States in the 1980s, and has gradually spread to other parts of the world, with an annual trade value of $6 billion.

Stadium Goods, the store that Pan referred to, is a New York City-based marketplace that sells the most sought after footwear, apparel and other hard-to-find items on behalf of their owners both online and in its retail store.

Major brands the company sells include Nike, Adidas, Supreme, and ASICS. Currently, the most expensive pair of sneakers is an Air Jordan 11 Jeter, which is selling at $40,000.

Opened for a little more than two years, the marketplace is well recognized not only in sneaker collecting circle in the United States, but also in the Chinese market, thanks to China's booming e-commerce business.

In August 2016, the company opened a store on Tmall, China's largest B2C online platform, and has since seen fast market expansion.

"I think the product breadth and authenticity assurance are what makes it popular among Chinese consumers," said Pan.

The Stadium Goods has a proprietary 10-point verification system to ensure that all items are authentic, while also examining the wear and condition. All products are checked multiple times against a cache of product images, live product, and information to ensure validity of goods coming in. Items are hand checked a second time on the way out.

Pan added that convenience is also a big advantage Stadium Goods has.

All shoes sold on Tmall are shipped directly from the United States, and the company also takes care of tax on imported goods. So it only takes seven to ten days for the shoes to reach Chinese customers, according to John McPheters, co-founder and CEO of Stadium Goods.

McPheters did not know how big China market could be until a Chinese customer bought 50 pairs of Air Jordan worth $10,000 by cash in its SOHO store in New York.

Learning that few of the limited edition sneakers were readily available in the Chinese market at the time and enthusiastic Chinese sneaker collectors had been flying around the globe to buy what they longed for, McPheters and his team sought online channels to reach out to Chinese consumers.

The marketplace joined the Singles Day sales event on Tmall last year, and saw the sales volume surging approximately 200 percent.

"We hadn't spread our wings at the time, we were still new," said John McPheters, adding that the company will join this year's sales event with many promotions to offer.

"It will be our blockbuster day ever, and I expect to see $3 million of sales that day," he said.

McPheters will fly to Shanghai during this year's Singles Day sales event, to tell Chinese customers more about the company.

Over the past year, Stadium Goods has learned a lot about consumer habits in China.

McPheters said certain products such as Nike basketball styles that are popular in China may not be that popular in the United States now.

Looking forward, Stadium Goods wants to further expand Chinese market. It will offer more products that are more appealing to Chinese consumers and also more expensive and hard-to-find styles.