Money flowing into fast-growing sneaker resale market

South Korea-based online fashion platform Musinsa has spun off its sneaker resale platform SoldOut to create a subsidiary named SLDT, alongside securing 10 billion won ($89.5 million) from investment firm Dunamu, according to the company on May 25.

SoldOut is a sneaker resale app that offers listings of limited-edition sneakers as well as content that covers a wide range of fashion items. It reached over 250,000 downloads in just two months after its launch in July 2020. Since last November, the app has expanded its offerings to include street fashion items.

Recently, the growing resale market for limited-edition sneakers has attracted investors, as major resale platforms are logging strong growth in terms of transaction volume.

For example, limited-edition sneakers have seen their prices skyrocket on resale platforms. In 2020, a pair of Air Dior sneakers, co-created by French luxury brand Dior and Nike earlier that year, saw its price tag reach 15 million won ($13,400) — almost fivefold the original retail price of around 3 million won. Meanwhile, a pair of Nike Air Force 1 Para-Noise sneakers, a collaboration between Nike and Korean singer and fashion icon G-Dragon, recently jumped to 13 million won from the original 219,000 won selling price in 2019.

Platform operator Naver Corp. also launched online sneaker resale platform Kream, which raised 40 billion won from SoftBank Ventures and Altos Ventures in March. Last year, Kream logged 270 billion won in transaction volume and is aiming to reach 700 billion won this year.

Large business groups are also entering the resale market. Domestic telecom giant KT rolled out its own limited-edition sneakers resale platform REPLE, while Lotte Shopping joined forces with the country's first sneaker resale platform, Out of Stock, to venture into the sneaker resale business.

Before the appearance of online resale platforms such as SoldOut and Kream, the domestic resale market had experienced stagnant growth due to issues such as the selling of knockoffs. But SoldOut and Kream boosted credibility by hiring professional inspectors to spot fakes and verify products' authenticity.

Also, the types of products sold on these resale platforms are becoming increasingly diverse in line with the growing market. In addition to sneakers, pre-owned luxury goods and electronic devices such as PlayStations are available.

"We're going to see competition heat up between platforms that are hoping to become the frontrunner in this new market," said an industry official.

Write to Jeong-cheol Bae at bjc@hankyung.com
Danbee Lee edited this article.