Forget NFT, this 31-year-old sneak-head says shoes are a better investment – Wired PR Lifestyle Story

31-year-old Richard Xia enters a room and the first thing he notices is his shoes.

This avid fan of streetwear loves to collect branded pieces like BAPE and Supreme. In 2018, Hwa Chong Institution and a graduate of Singapore National University decided to start a Novelship sneaker and streetwear business with his longtime friend and classmate Chris Xue.

“The idea to start a novelship came from mutual interest in sneakers and streetwear. As enthusiastic sneakers enthusiasts, we saw a huge market opportunity in the Asia Pacific region, and we wanted to solve our problems with buying and selling sneakers and streetwear, namely the usability and authenticity of the products. ”

The company currently employs about 70 people, has five processing centers and a presence in six markets including Japan, Taiwan and Malaysia.

$ 2 million in funding from the Carousell store

The founders started selling Carousell shoes in 2017 with a savings of $ 9,000. “In the beginning, Chris and I were listing things every day. I think we probably came up with a few hundred lists a week trying to get more exposure. It was a good start for us to build our user base and some of them are regular users of Novelship to this day. “

The business then expanded to its marketplace website. The aim was to optimize the process of buying street clothes so that street clothes enthusiasts could easily buy and sell authentic and exclusive fashion products online.

Novelship’s interface is designed to look like the market for sneakerheads that would be popular with sneakerheads, where offers (offers) and lists (sales) are displayed to facilitate transactions.

The most popular brands on the site are Nike, Air Jordan, Adidas Yeezy, Fear of God, Supreme and Bearbrick. In addition to sneakers and street clothes, collectors are also sold.

In 2019, it raised about $ 2 million in a seed round led by Global Founders Capital, pushing the total capital raised to $ 2.3 million. The plan was then to expand into major growth markets across Asia.

The business has yet to make a profit, Richard shared, as his main focus today is to expand rapidly to serve more customers in the region. “We’re fast approaching the nine-digit annual execution rate,” Richard said.

Sneakers as an investment

Packaging these products may not always be for personal consumption. Novelship shoes and streetwear offer users unique investment opportunities, Richard said.

“They help sneakers and streetwear as an ‘alternative asset’ to those looking for extra income, and they offer great business opportunities to sneakerheads or first-time shoppers locally and regionally.

“Personally, what makes sneakers one of the hottest commercial assets is that sneakers are all-around: they have a great aesthetic, they’re very comfortable to wear and flexible.”

Richard thought he was also a collector. In 2021, it brought together nearly 50 couples. “I’ve sold a few things I don’t use, so I now have about 30-40 pairs of shoes.”

However, there is a note that interested parties should know before entering this space. “The reality is that some sneakers do very well and some don’t, but most sneakers don’t completely fail, which means it’s pretty safe as an asset.”

So what’s the best brand if I want to invest in my first pair of shoes? Richard said that for the first time to dare to sell or invest in sneakers, it is best to use a classic pair, such as the Nike Air Jordan 1 Retro High OG.

“Whatever the silhouette, color or pattern, Air Jordan 1 High maintains its value very well and is likely to raise the price. Another type of sneaker worth investing in would be a Nike SB dunk or a sneaker partnership with a designer or celebrity,” he said. yours.

“One of the most valuable versions we had last year was the Nike x G Dragon PEACEMINUSONE 2.0, which was the Air Force One version with the Peace Minus One G Dragon.”

In terms of profitability? Richard said they study retail premiums to calculate how profitable certain brands and models are. The retail prize is deducted from the retail price above the retail price.

Shoes like the Nike SB Dunks get the highest average retail price of 121 percent, Richard shared. Air Jordans, meanwhile, accounts for half of all sales in Singapore and Malaysia.

Identify fakes and keep them real

At Novelship, its goal is to serve consumers in the ASEAN region and fulfill all product transactions appropriately. Its average fulfillment time is five working days.

Asked how he guarantees the authenticity of the goods in the market, the founder said that the authenticity of the products is taken very seriously by the business.

“Our primary duty is to ensure that users access only real and authentic sneakers / street clothing through our platform. to ensure that every element of the trade is 100 percent real. “

“If we determine that a product is counterfeit or used, we will return it to the buyer, return the item to the seller and, if necessary, take action against the seller to remove it from Novelship,” he added.

Based on the experience of Novelship, the usual two fakes are Yeezy and Air Jordan 1 for popularity. “In terms of special fakes, we’ve seen some very realistic and good quality sneakers because of the materials they’re using or the hand-sewn ones. However, special counterfeits are not as common as production would be and could be purchased at almost a retail price or even higher. “

How to save shoes as “active”

To ensure that these “goods” are valued in value, the way to do so may be to open their eyes to some.

“Preservation is important, so it’s important to never wear it if you plan to maximize resale value! Keep your limited edition sneakers in your shoe box for as long as you can and store them in a relatively cool, humidity-controlled climate.”

“Avoid touching the sneakers too much and don’t stack them on top of each other when storing them over time, as the box may bend and the shoe may break. Invest in a good storage rack and store them away from dirt or dust,” he added.

“The most important thing that kills spills is moisture. Moisture in some cases causes the pleasure or skin to get wet and then crack. This cracking process is very difficult to begin with because it can cause oxidation (white soles turn yellow over time).

Richard recommends putting your shoes in a good storage box, such as glass or plastic. “However, there is no 100 percent guarantee that the sneakers will remain in good condition. made ”.

Asked why investors should consider sneakers instead of cryptocurrencies and other assets such as Fungible Tokens (NFT), which have been gaining momentum in recent years, Richard commented: “Digital currencies are not for everyone. Because of their technicality, most people find it difficult. “Because of the unnecessary complexity of cryptocurrency, it was deliberate to avoid regulations.”

He added that a significant way to accumulate wealth is through limited edition sneakers. “For some investors, collecting rare and beautiful objects makes more sense as an investment tool.”

“I would ask the same question to people who collect expensive art, how would they pay millions of dollars for something that will be wasted over time? I think the logic is the same. There are more sneakerheads and collectors who would make and store their collections in a glass case to store as much quality as they can. It’s a way for them to express their creative identity. “

Endemic Covid-19 and future plans

By 2022, the brand business is focused on growing even more with the recent launch of its Android app (Novelship already has the iOS app) and is looking to establish drop-off sites in its major markets for consumer convenience. Novelship is now fully online.

We plan to work with celebrities and agents to provide a selection of products and organize exclusive publications on the website.

If Covid-19 has taught the company anything, it has to be light to change. “Like many other businesses, we were badly affected when COVID-19 crashed. Our logistics channels were cut off and we could not be reliably shipped from Singapore. This led to delays in receiving customers for their products. more were interrupted, ”Richard shared.

“However, the whole team was more serious about creating multiple security processes while implementing multiple security processes at the same time to ensure that we could continue to run our business.”

Richard added that the pandemic has also pushed for a more innovative approach to business.

“Despite the challenges and setbacks I have experienced, it has helped me focus on achieving my milestones; it helps me control things, celebrate victories and gain visibility as a place where we are a business. navigating this time.

Featured Image Credit: Novelship