released October 23, 2020
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A detailed view of the Nike Air Jordan 1 sneakers. [Photo/VCG]
Zhang Xinyu has been in the sneaker business for seven years. Calling himself a sneaker aficionado, he is not only enthusiastic about buying sports shoes on the secondary market, but is also keen on selling them.
"I do this because I love it," Zhang said. "Also, I can get those limited-edition sneakers for low prices through special channels.
"In the beginning, I could earn 30,000 to 40,000 yuan ($5,670) a month through the sneaker trade. When business is good, making a monthly profit of 100,000 yuan is not impossible."
Zhang is among an increasing number of people who are making a fortune through the online sneaker trade. Most of them are people in their 20s or even younger.
The difficulty of buying limited-edition sneakers in stores has given rise to the birth of an online secondary market, in which sneakerheads can get what they long for through secondary trading.
However, the business has now gone far beyond just trade among sneakerheads. It has turned into a kind of speculation that contains financial risks.
The Shanghai branch of the People's Bank of China, or the central bank, issued a briefing earlier this month, saying illicit acts including illegal fundraising, absorbing public deposits, financial fraud and pyramid sales could exist behind the scenes.
The bank warned that: the business is showing features of securitization, with a vast daily volume; some third-party payment organizations are providing installment and other leveraging services for the business, increasing financial risks; and as operations of the business are opaque, mass disturbance may occur if sneaker trade platform operators make off with money.
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