A partnership between Tmall Global, an extension of Alibaba's B2C operation, and New York-based retail and consignment store Stadium Goods is set to give Chinese consumers access to popular and hard-to-find sneakers in the country, according to an article published by businessinsider.com.
The U.S. store, one of the biggest players in the U.S. sneaker resale market, has started earlier this month and will be launching low-priced products, followed by trophy case items later.
"As a leader in the sneaker marketplace, we're excited to be partnering with China's most premiere destination for selling and buying," John McPheters, Stadium Goods co-founder and CEO, said in a statement. "We believe together, Tmall Global and Stadium Goods will offer sneaker enthusiasts throughout China the most premium level of customer experience and authenticity for the Chinese consumer."
With the growing popularity of professional basketball and the rising interest in fitness among the emerging middle class, more Chinese consumers are now spending on sportswear.
In the past, sneaker enthusiasts in China buy authentic shoes in two ways. One was to ask friends to buy the shoes for them and send or bring them to China. The other way was to buy them online at Taobao.
Although sneakers bought at Taobao may not be guaranteed an original one, still sneakers fans buy them online.
Last October, when the Stadium Goods Retail Store opened in Soho, New York, a Chinese dealer came and bought 50 pair of Nike Air Jordans for about $10,000 to be resold back in China, McPheters said. He added that Chinese shoppers came to the store since then.
McPheters said that the growth potential in China has prompted the company to partner with Tmall as he found that both Chinese and U.S. consumers are interested in exactly the same specific styles.
"People estimate that [the sneaker resale market] is a billion dollar business," McPheters said. "In my mind, all those estimates are really based around the United States alone... and the majority of that is online transactions."
"If you think about China, the e-commerce market is almost double the size of the U.S... So I think it could be a $1 billion business in China," he added.
According to the U.S. retail store, it sold 83 pair of sneakers in its first three weeks on Tmall, with the Adidas NMD_R1 - S79166 and Adidas NMD R1 - S31510 as the top sellers.
The store said it has placed 1,500 of their total 5,000 styles of sneakers on Tmall, with prices that reach RMB 2,000 (about $300 US dollars, before tax and shipping).
Based on the adjusted China parcel tax policy for cross border e-commerce, Chinese consumers will pay
an additional 30 percent tax when they buy sports goods at more than RMB 2,000 from non-Chinese sellers. It usually takes two weeks to ship sneakers to China, with the shipping of RMB 60 ($9).
Danielle Bailey, research director at the data analytics firm, L2, said that Stadium Goods to adapt to Chinese consumers who are highly price-sensitive as well to the country's digital ecosystem, which is interconnected and also fragmented.
In addition to this, other brands also pose challenge to Stadium Goods in the Chinese market.
"All the major global sportswear brands - Adidas, New Balance, Nike, The North Face, and Under Armor already have an official presence on Tmall," Bailey said. "The hugely popular BAPE and brands like EVISU and Y-3 are also there."
"The Chinese consumer is a very sophisticated and knowledgeable consumer," the analyst added, "they have moved beyond the flashy logo stage of new luxury and are looking for niche brands to differentiate themselves and communicate that they are in the know."
On the other hand, McPheters remain optimistic about the Chinese market. "Getting it together and launching on Tmall is a huge amount of work and a lot of blood, sweat and tears. Now it's live, it's breathing, it's transacting. It's a very exciting time for us," McPheters said.