Branded and high-fashion footwear has become more popular among the young population. Sneakers are shoes designed for sports; however, it does not stop young people from wearing them daily. In 2019, the global sneakers market size exceeded $60 billion; and it is still growing. The leading brands in the sneakers market are Nike Inc., Adidas AG, and PUMA SE. The largest share in the global sneakers market is accounted to North America, primarily the USA.
Primary Market
What started as a fitness craze is now a top-fashion footwear product that is most popular among post-90s young consumers. The decision to spend money on a new pair of sneakers is usually driven by several factors. The most important component influencing young people’s decisions is product price, brand, and product design and style. Some consumers further consider product materials, innovation, and processing technology (Chu 481). Price stays the primary factor due to the age of the consumers. Most of the consumers are post-90s young people who have just entered society with limited financial capacity (the Chu, 483). The brand’s image greatly affects consumers’ choices in purchasing footwear. A company’s positive reputation and high-quality service can greatly boost the brand’s sales.
One of the leading brands in the primary market for sneakers is Nike Inc. It is an American multinational corporation that focuses on the design, development, and manufacturing of not only footwear but also equipment, accessories, and clothing. The annual sales of Nike Inc. exceed the amount of $20 billion (Childs and Byoungho 80). Due to the company’s heavy international promotion, more than half of the annual sales are attributed to international markets. Initially, the brand exclusively targeted serious athletes, investing in and expanding innovation labs and sophisticated research into human movement and physiology (Childs and Byoungho 82). After realizing the potential of fashion markets, Nike began to target mass-market consumers. To help Nike position itself as a fashion brand, it initiated various collaborations with fashion models, designers, fashion brands, and celebrities.
Secondary Market
When Nike, Adidas, or other popular footwear brand releases new sneakers, a crowd of people waiting for the stores to open can be noticed. The newly released sneakers disappear from the counters within the first hours to then emerge on the resale market. This phenomenon appeared during the last century and gradually attracted public attention. Such events, such as the limited release of “Nike Air Mag” from Back to The Future II and Kanye West’s collaboration with Nike and then Adidas, significantly increased the significance of the resale market (BoPing 1). With the increased sales of sneakers both in the primary and secondary markets, the initial reason for people to buy this footwear changed. Originally, young people purchased the product to pursue fashion and comfort. Nowadays, sneakers serve less practical use; instead, they become a luxury, collection, or profitable investment (BoPing 6). The sneaker resale market can be considered similar to the stock market, where professional resellers work together, aiming at one popular model every time. After much money is spent, resulting in full storages of newly released sneakers, the resellers can manipulate the price on the resale market.
The market can be considered risky and unstable due to a possible change of taste and preference along with the age of the consumers. The price of sneakers on the primary market can also change due to the higher demand. However, because the product is primarily a piece of footwear, its initial function of it will not disappear. The public force and government prevent the price of sneakers from increasing drastically on the primary market. As such, the sellers seeking to take advantage and profit off of the resale market would most likely continue with releasing complementary products, new technology, styles, and design, preventing the resale market from crashing in the short term.
Works Cited
BoPing, Zhang. “Analysis on the Current Situation and Future Development of Sneaker Resale Market.” Atlantis Press, vol. 166, 2021, pp. 150-156.
Childs, Michelle, and Byoungho Jin. “Nike: An Innovation Journey.” Product Innovation in the Global Fashion Industry, 2018. 79-111.
Chu, Jiayue. “Factors Affecting the Purchase Decision of Sneakers in Post-90s Consumer Groups.” Springer, 2020, pp. 480-487.