Why Australia is a player in global sneaker market and how China is driving the sales boom

On June 30 last year, chaos came to the backstreets behind Bondi Beach – not a pub brawl, but the world’s first pop-up store selling Louis Vuitton’s collaboration range with American skate and street wear brand Supreme. Hundreds queued to get their hands on the hotly-anticipated collection, hours before business hours started opening in the only other seven cities selected for similar pop-ups in Tokyo, Seoul, Beijing, Paris, London, Miami and LA. Resellers reportedly flipped items to those still waiting in line at a 100 per cent markup and stock sold out within an hour. Two months later, more than 6,000 sneaker heads descended on the Melbourne Convention & Exhibition Centre for the first Australian edition of Sneaker Con, the world’s biggest sneaker trade show – the American expo’s third international iteration after London and Hong Kong. Australia might not be on the way to or from any of the world’s major hubs, but it’s becoming increasingly important to the international street wear and sneaker industry. The story of Incu: how Hong Kong-born twins built a fashion empire in Australia “We have a place at the table,” says Rachel Muscat, an Australian who has been Adidas’ global collaborations director since 2009, overseeing the sports giant’s creative tie-ins with artists and designers such as Kanye West, Pharrell Williams, Raf Simons, Gosha Rubchinskiy and Alexander Wang, that have been instrumental in helping Adidas regain both street cred and market share in recent years. Due to its time zone, Australia is also the world’s first market where Adidas’ hottest products “drop” in store. “When there’s Paris Fashion Week or something like that, you’re at an event, you’ve got your Australian sneaker crew there among the best of the world in terms of sneaker owners and sneaker designers,” says Muscat. “I moved to Hong Kong when I was about 24 [to work for Adidas’ regional Asia Pacific office], I was pretty young and I think you always have this idea that the grass is greener [on the other side], but as I really delved into the sneaker culture overseas, it became evident that Melbourne and Australia in general has quite a thirst for sneaker culture. Looking at some of the pioneers that opened that door for us, like Sneaker Freaker magazine, I travel a lot and to go into any high-end sneaker boutique and you see that magazine with other magazines, you realise how much of an influence Australian culture has.” Launched by Melbourne-based Simon “Woody” Wood in 2002, Sneaker Freaker is published three times a year, with a circulation of 25,000 and distribution in 42 countries. The magazine is also sold over the counter at boutiques such as Bape, Supreme, NikeLab and Dover Street Market. Widely considered one of the world’s leading sneaker authorities, Wood often gets first look at the hottest new shoes. On close to 30 occasions these have also included Sneaker Freaker’s own collaborations with the major sneaker brands, sold on sneakerfreaker.com and via select international retailers. The 2013 Sneaker Freaker x Puma Blaze of Glory ‘Sharkbait’, of which only 40 pairs were produced, has sold for as much as US$2,500 on eBay. Since Sneaker Freaker launched, Australia has witnessed not only an e-commerce explosion – with the market often counted in the top five e-commerce markets of major online fashion and luxury retailers – but bricks-and-mortar retail as well. Australian luxury retail boom fuelled by Chinese shoppers and micro-influencers The past three years has seen a flurry of mergers and acquisitions in the A$2 billion (US$1.52 billion) local fitness and athletic clothing sector, as local players face off against new market arrivals such as JD Sports and notably, Amazon. There are a few independent stores angling to grab some of the market share from Rebel Sport and the Accent Group, big players that operate about 600 stores between them. These indie stores are often mentioned by influential street wear and youth culture sites such as Hypebeast and High Snobiety. Sneakerboy and Highs and Lows are the only two Adidas “consortium” level retailers in this market, which receive the most exclusive products. Other key sneaker retailers include Melbourne’s Up There, Brisbane’s Laced, and Supply in Sydney, which has a similar arrangement with Nike that Adidas does with its consortium retailers. Where the cool kids buy their sneakers in Hong Kong Sneakerboy caused excitement in the international retail industry when it was launched in Melbourne’s Little Bourke Street in late 2013 by Chris Kyvetos, the former creative director and buyer for Melbourne luxury emporium Harrolds. The store’s innovative concept featured a flexible/fluid set-up, offering luxury sneakers from brands such as Valentino, Balenciaga, Dior and Céline alongside limited-edition products from major sports brands. The store had a retro-futuristic design that was part inspired by the 1985 Luc Besson thriller Subway. Customers bought products via the Sneakerboy app on a store iPad or their own device and the product was shipped from Hong Kong within three days. There are now four Sneakerboy stores in Sydney, Melbourne and Queensland’s Gold Coast. “Sneakerboy really started a new way of thinking – this isolated environment that brought fashion and sneakers together,” says Muscat. “It played a part in the way that retail is shifting and changing. He [Kyvetos] has been recognised globally as a pioneer.” The rise in numbers of Chinese consumers has helped Sneakerboy’s success. According to IbisWorld tourists, Asians account for up to 30 per cent of luxury goods sales. The ugly sneaker trend: what’s so cool about them? “They [Chinese students] seem to have more money than just about anyone – they’re sustaining a level of shopping here that didn’t exist 15 years ago,” says Wood. “Sneakerboy tapped into that market. They’re the kids who are spending A$2,000 on a pair of Balenciaga shoes and not blinking. Your average kid from [outer Melbourne suburbs] Box Hill or Ringwood or Frankston is not buying Balenciaga Triple S. For starters they’d probably get bashed and have their shoes stolen, if they knew how much they were worth”. He adds, “These kids are not necessarily the most extroverted members of the sneaker community. But in terms of buying power, they’re unrivalled”.