Exorbitantly priced sneakers are China’s hottest investment

Surprising as it may seem, China's hottest investment nowadays is turning out to be Nike, Adidas, and Puma basketball shoes that obsessed sneaker lovers are fighting to get their hands on. No longer do people seem to be interested in stocks, real estate, and even cryptocurrencies for that matter. Sneaker fanatics worldwide have fuelled an expanding bubble in high-priced sneakers, often limited-edition collaborations between big names in sportswear and fashion, rappers or athletes.

But in China the craze is at fever pitch, with devotees driving soaring trading volumes on online "sneaker exchange" platforms, prompting warnings from authorities about dangerous speculation as resale profits approach 5,000 percent. According to Hu, who travelled 300 kilometres (187 miles) to Shanghai for the chance to buy the latest Nike Air Jordans, the sneaker market is no longer just a game for enthusiasts. Speculators are flocking into the business now.

The craze is due to two main factors. NBA stars like Michael Jordan have been idolised for years in China, where basketball is arguably the most followed sport, and the associated streetwear culture finds a huge and growing market. And with Chinese authorities limiting individual stock-market price movements to contain volatility, sneakers are embraced by younger investors seeking quick profits in a commodity they can relate to.

The phenomenon is spurring quick growth in Chinese sneaker-trading platforms like Poizon, whose annual volume is around 15 billion yuan, according to Chinese tech consultancy iiMedia Research, which is more than triple the volume of StockX, a leading US platform. Platforms like Poizon and Nice also have attracted hundreds of millions of dollars in investment from foreign and domestic venture capital, according to Chinese media reports.

The global market is taking notice. StockX rival GOAT launched an app-like mini-programme on leading Chinese messaging platform WeChat in July. StockX executives say they also are crafting China plans. The Shanghai branch of the central People's Bank of China issued a warning last month about the financial risks of excessive sneaker speculation, and government-controlled media portray the phenomenon negatively. However, that is not acting as a deterrent for these sneaker enthusiasts.

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