StockX co-founder and COO Greg Schwartz expects the move to further accelerate transactions on the site in Australia, where StockX grew 250 per cent year over year last year, faster than its international business overall, which grew 130 per cent year over year. The company is based in Detroit, US.
“We’ve already seen exciting organic growth in Australia, but we think this will further accelerate it,” Schwartz told Inside Retail.
The opening of the authentic centre in Melbourne comes just two days after eBay Australia launched an authenticity guarantee program for new and pre-owned luxury sneakers purchased on its site in partnership with Sneaker Con, an established sneaker event and digital platform for sneakerheads to buy, sell and trade kicks.
“The sneaker authentication wars have begun with two major players battling for Aussie attention,” Saskia Fairfull, brand experience consultant and founding member of the Independent Fashion Advisory Board (IFAB), told Inside Retail.
While Australia represents a small slice of the estimated US$10 billion global sneaker market, its rapid growth suggests there’s still a significant opportunity for global marketplaces to tap into. Fairfull believes StockX’s success or failure will come down to brand credibility and community.
“StockX will need to ensure they have a solid marketing strategy targeting locals or else sneakerheads will go to who they know, eBay and Sneaker Con,” she said.
Not just sneakers
StockX was founded in 2016 as an online marketplace to buy and sell rare and highly coveted limited-edition sneakers from the likes of Jordan and Yeezy, but in recent years, it has expanded into premium streetwear, luxury handbags, electronics and collectibles.
Today, it has more than 125,000 listings across 500 brands. While sneakers still make up the bulk of its listings, new categories are growing rapidly. Sales of trading cards increased more than 4,000 per cent last year, according to Schwartz, and the two top-selling products on the platform last were PlayStation and Xbox consoles.
“It’s [providing] access to these high-demand items that aren’t always sitting on retail shelves,” Schwartz explained.
As StockX expands into more categories, it’s increasingly competing with the likes of eBay, Vestiaire Collective and Idle Fish, a second-hand marketplace in China. Its main obstacle to growth in the APAC region will be diverting traffic away from other resale sites, according to Fairfull.
But unlike those sites, StockX only trades in products that are in ‘new, in-the-box’ condition, and it caters to customers buying sneakers as a collector’s item to put on the shelf, or as an asset for their investment portfolio, as much as to actually wear.
“The whole approach is quite interesting,” Danny Lattouf, chief strategy officer, at The General Store, told Inside Retail.
“Those in the know try to buy in a certain way: one to stock (keep), one to rock (wear) and, where possible, one to sell. In many cases, you can pay for at least two of them when selling the third in the resale market. And depending on how hot they are, you could potentially pay for all three with the sale of the first one.”
The elevation of sneakers from footwear to financial investment is the result of clever production and marketing tactics on the part of brands.
“This idea that brands release products with scarcity in mind goes back over 30 years to the original Air Jordan sneakers,” Schwartz said.
“They really started this trend of having a unique colourway for each release [and] more demand than there was supply [to] help create a halo effect of hype around the product that helps drive their general release product. But we’re seeing more and more brands taking this approach to releasing products.”
According to Lattouf, StockX has helped further elevate the value of products to the point where “sales are almost automatic at launch”.
“I think it’s impacting brands in a positive way,” he said. ‘
As the sneaker market grows, it’s attracting new customers. While the sweet spot is still Gen Z, according to Schwartz, it’s no longer so male dominated. The number of female customers on StockX doubled in 2020.
“Our female audience is one of our fastest growing segments,” he said, adding that the over-45 demographic has also seen significant growth.
A sneaker unicorn
StockX is now valued at US$3.8 billion, following the conclusion of a US$195 million secondary tender offering as well as an additional US$60 million in Series E-1 primary shares in April. It is rumoured to be pursuing an IPO later this year.
“Our focus right now is on global expansion and category diversification, while continuing to grow our core business,” Schwartz said. “There are massive opportunities ahead, and our mission right now is to execute.”