KUALA LUMPUR, June 14 — One fateful day back in 2013, Calen Leong, who was 18 at the time, got a proper scolding from his mother over his apparent obsession with sneakers.
He had around 20 pairs of various New Balance and other models with prices ranging from RM500 to RM899, which of course, for a kid studying in an expensive private college financed completely by his parents and earning no income whatsoever, was rather excessive by any standards.
“She said buying sneakers was a waste of money you pay a lot for it but then after a while it gets worn out, then you throw it away,” the bespectacled Leong, now 22, said in an interview at his parents’ penthouse here.
But being young meant being rebellious and the younger and brasher accounting student was having none of it.
Annoyed by the constant nagging, Leong immediately set on a mission to show his mother that there was more to those colourful rubber-soled shoes than mere youthful fad and looking the part to get girls: they were a goldmine waiting to be exploited.
Today, Leong earns a six-digit yearly income just from reselling a mixture of general and limited release sneakers through his online company “Street Lavida”, which he founded in 2013 and operates from his parents’ home.
His once sceptical mother now gives him business advice. The table has, apparently, turned.
“I wanted to show her that I could make money from loving sneakers so in 2013, with a capital of RM1,000 which I got from the allowance my parents gave me, I bought 10 pairs of Vans from the UK for £15 each (around RM90 at the time),” he explained.
“They were mostly colabs (sneaker-slang for collaborations between the sneaker company and other designers, labels or celebrities) that weren’t available here and I resold them to make a RM100 profit each. So my first profit was RM1,000.”
Forbes Magazine, citing leading sports goods consultancy firm SportsOneSource, wrote last year that growing millennial demand for sneakers have fuelled a global secondary market worth US$1 billion (RM4.3 billion), while the primary market was estimated to be worth US$55 billion as sneaker sales grew by more than 40 per cent since 2004.
It further noted that just among the three major players — Adidas, Nike and Under Armour — sales increased more than US$25 billion in 2013, a close to 47 per cent jump from 2009.
Research firm Transparency Market Research said it expects the global footwear market to reach US$220.2 billion in value and 10.974 million units by 2020.
Build the hype and they will come
Helping drive the growth, analysts noted, is a combination of smart marketing strategy that often involves keeping supplies of the most popular sneakers low, and building up hype in the run-up to their releases; a job made easier thanks to the powerful outreach of social media.
Combine this with the traditional endorsements of celebrities with cult statuses, sporting companies like Adidas and Nike have managed to create demand so ridiculously high that sneakerheads are willing to do anything in order to “cop” their favourite pairs.
Thankfully, violence is not part of the sneaker frenzy in Malaysia. But it has manifested in the form of online scams.
Counterfeit sneakers or streetwears are all over the Internet, including legitimate online selling platforms that claim to sell only authentic products, and testimonies of buyers falling prey to scammers are aplenty.
The involvement of outlaw syndicates and the widespread sales of counterfeit products are testament to the enormous value of the sneaker market today.
There is no data to estimate just how much the Malaysian primary and secondary sneaker markets are worth, but Leong’s profit alone should provide a rough idea; Leong said in the first year of his business in 2013, his annual turnover was RM10,000. By 2014 it had increased to RM50,000.
Leong was hesitant to share details of his profit the year after but said it was in the six digits.
“The demand is always there at one point my buyers were mostly young kids, like 15 to 25 now even older people want to follow the trend so they come to me and buy Yeezys,” he explained.
Yeezy is the name of a sneaker produced by German sports giant Adidas in collaboration with African-American rap megastar and fashion icon Kanye West.
The sneakers were simply named after the New Yorker’s hip hop epithet, “Yeezy”. The first Yeezys, the Yeezy 750 Boost, a suede above-ankle boot with a frontal strap across the foot, was released in February 2015. Adidas has since come up with various models.
In the streetwear market, Yeezys are the Rolex of sneakers. These sneakers can fetch up to RM10,000 in resale value depending on the models and condition, which explains why Leong and other streetwear resellers often stock up Yeezys in their inventories.
“My first Yeezy was the turtle dove,” Leong recounted. “I queued for them like everyone else outside the Adidas Originals store in Pavilion (Mall). After I got them I resold them on the same day for around RM3,000 I bought them at retail for around RM800.”
It’s a market on steroids
Making RM2,200 profit with a capital of RM800. Sounds like quite the profit there, right? No. Leong later said if he had kept the shoes longer, he could have made a profit of up to RM9,000. The Yeezy 350 Boost in “turtle dove” colourway is valued at around RM10,000 today or US$1,571.
Today, Leong’s inventory boasts around 20 pairs of Yeezy sneakers in various colourways, including the most coveted “Zebra V2” colourway (a black and white striped knit that actually does resemble a zebra) which can fetch up to RM9,000.
He has more than 200 pairs of assorted sneakers in his collection, most of which are just “stored” in the living room of his parents’ penthouse.
But while Yeezys and Adidas may be the today’s buzzword in the streetwear market, US-based sportswear giant, Nike, remains ahead of the game in terms of producing sneakers with the highest resale value; the self-lacing Nike MAG that was featured in the movie Back to The Future and reproduced in 2016 was valued at US$30,568 while the Nike Air Yeezy 2 “Red October” (West was a Nike star for some years before he defected to Adidas) was valued at US$5,000 (RM21,500), according to hip hop magazine Highsnobiety.
So why are people willing to pay so much silly money for a pair of sneakers? A founder of Sneaker-Lah, a festival gathering for sneaker enthusiasts and vendors from all over the country, and editor of online streetwear magazine massesmy.com, Bryan Chin, explains that it’s about status:
“They want you to see they got money, man some of them paid RM8,000 for a pair of Jordans so just like with other luxury items, they want to show that they got money,” Chin, a sneaker enthusiast himself, told Malay Mail Online.
This need to attain social status has pushed sneaker-collecting beyond merely being the hobby of a small group of hip-hop scenesters to become a huge mainstream fad, fueling the growth of a secondary sneaker market with the spawning of thousands of online resellers, young and old.
Where it would have been weird five years ago to see a middle-aged man on Facebook attempting to sell a pair of Yeezy or Air Jordan sneakers, it is now common.
“It’s a market on steroids everybody wants to have a piece of it,” Chin said.
And for Chin at least, business has been good. His Sneaker-Lah event has garnered a huge gathering. The first year, transactions were estimated to generate RM200,000 in cash profit. Its second edition last year recorded more than double the profit.
The positive response is pushing Chin to go bigger and this year he is planning to hold Sneaker-Lah at the Kuala Lumpur Convention Centre.
“I don’t think there has been a bigger sneaker event we’re expecting more than 500,000 to come,” he said.
From sneakers to T-shirts
For 32-year-old communications professional Abdul Razak Abdul Rahim, the exponential growth of the sneaker market has inspired many like him to get into the reselling business for extra income.
Abdul Razak may not have a collection as big as Leong’s or other bigger players, but he did manage to turn a few thousand ringgit from selling Yeezys and Air Jordans.
“Actually I do it for fun. I have a steady job but who doesn’t want extra income?”
And he doesn’t only sell sneakers. His products have now stretched to include streetwear clothing like T-shirts from Supreme, a New York-based skateboard label that has attained an-almost mythical status among streetwear and hip-hop scenesters for reasons unexplained until today.
“Like a boxed Supreme T-shirt alone can be resold for RM500 or more if it is used but in good condition. The retail is only around RM250,” Abdul Razak explained. (This refers to a T-shirt with just a Supreme logo in a read box measuring around five inches printed across the chest.)
Leong too has ventured into streetwear apparel, but has bigger ambitions. From reselling Japanese streetwear gear from Bathing Ape, the ambitious young man is now producing his own streetwear clothing line “Street Lavida.”
“I hope to produce T-shirts, caps and stuff one day I’m not a good designer so I’ll need to hire one,” he said laughingly.
With a six-digit income earned just from reselling sneakers from his parents home, it won’t be surprising to see Leong’s clothing line on the runaway soon.