Can Foreign Shoe Trading Platform Enter The Chinese Market?

According to the world clothing shoes and hats net, 2018 can be said to be

A big year in the two tier market, the rise of drugs, nice and other platforms in China has attracted a lot of attention and investment. At the beginning of the year, there was a merger of Flight Club and GOAT at the same time, and at the same time, it received $60 million in financing. At the end of the year, Farfetch bought us Stadium Goods for 260 million US dollars.

They are all big moves.

Eddy Lu, founder of GOAT, said: "now the scale of the two class shoes market has reached US $2 billion."

It is also expected that such a huge potential will attract the attention of the capital.

There were two symbolic time points in the initial formation of the market: the first was the creation of Flight Club in 2005, the first in the United States to sell sports shoes in the form of consignment, followed by the establishment of GOAT GOAT in 2015. This is the first platform dedicated to online selling.

The merger of these two companies has established the world's largest platform for trading shoes.

With 7 million members and two websites plus more than 15 million trips per month, GOAT and Flight Club have changed from "pioneers" to "industry leaders", quietly changing the way people buy sneakers.

China is the largest overseas company.

If you don't want to share a cup of cake, it must be a fake. We can see that Flight Club has opened Chinese micro-blog early and ready for entering China.

Recently, a heavy message about GOAT and Flight Club has been exposed on the Internet. The famous shoe retailer FOOT LOCKER invested 1 US $100 billion in capital for the combined company portfolio, setting the largest investment amount in the class two market of sports shoes so far.

In addition, we have recently learned a news that is closely related to us. GOAT is about to enter the Chinese market.

Last year, all the development in China seems to be a little more than you can imagine. Over the past year, a lot of companies and capital have been stationed in the two tier market of local sports shoes.

These platforms are rapidly rewriting the development rules of the two tier market for shoes (at least local). The simplest example is, now, "buying and selling" a pair of shoes, who will not first think of opening their APP to see the current price of shoes in the market?

about

In addition to being an astronomical market, they may face many problems and challenges. Before discussing this issue, we found the founder of Eddy Lu, GOAT, to see what he thought.

Eddy Lu

GOAT co founder and CEO

Let's introduce GOAT to you.

Eddy Lu:GOAT is the world's largest trading platform for genuine shoes, and over 10% of all sneakers on the line are fake. In order to solve this problem, we launched this platform in 2015 years. Now we have more than 12 million users, and more than 600 employees in Losangeles, New York and Asia.

We are the first technology company that uses "mail" to identify shoes. Let the seller send shoes to GOAT and identify and control the quality. We use our own technology to ensure that the product is absolutely authentic and in good condition, and then send it to the buyer.

How does GOAT ensure that the shoes are genuine?

Eddy Lu: we use AI intelligence and machine learning technology to ensure that shoes are in line with the description, but before that, manual inspection is necessary. This is the core of our testing phase. Our appraiser needs months of training before we can post.

Under what circumstances was GOAT born?

Eddy Lu: I used to play basketball every day when I was little, so I like sneakers very much.

My partner Daishin also likes sneakers very much. When he was ten years old, his father bought him the first pair of sneakers Jordan V Grapes, so 23 years later, when Grapes was re engraved, he said he must buy these shoes.

He went to eBay to buy it, but after receiving the shoes, he found that it was different from his old one, and we found it was fake. He was very angry.

We will discuss why we buy such expensive shoes online and worry about whether they are fake or not.

Now you see on eBay, about 10% of the products are fake, which is a big problem.

Nike is the most fake brand in the global market. When users want to buy hundreds or even thousands of knives to buy a pair of shoes, we must protect them.

What do you think of the second-hand shoe market? After all, shoes are a consumable, but nowadays more and more people regard it as a way of collecting and keeping value.

Eddy Lu: now people really collect more sneakers. We know that shoes are no longer just for basketball, but also for everyday collocation.

So many people start wearing sneakers because they are a daily necessities and want to show their personality through their shoes and their collocation.

In 2015, 9 million pairs of sports shoes worth $12 billion were resale. Until now, what kind of changes have you seen in this market?

Eddy Lu: the market is definitely bigger now than in 2015. Only Jordan was popular in 2015, and everyone would collect some.

Then you saw that Kanye West joined Adidas and opened the market at once.

For example, a Top Seller in 2017 sold us $2 million shoes, but many people have sold over $10 million in the 2018 year of the year November. We can see that the market for shoes is growing rapidly.

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Some time ago, you signed Kyle Kuzma. Why do you think GOAT will need spokesperson? After all, it is usually the sports brand that will sign the spokesperson.

Eddy Lu: we live in Losangeles and also like the Lakers.

Kyle mostly liked sneakers, but Kyle and Nike could only wear Nike shoes to wear, so he came to find GOAT.

We can help him find shoes that are hard to find, both on the floor and on the floor.

We want to help you understand that sneakers are part of everyday wear by signing Kyle, you can enhance your personality and your lifestyle through sneakers.

We used to have a very good relationship with Kyle. We have worked several times together, because he likes sneakers very much, so things happen naturally.

We said, "Hey, now that you don't need to match the color shoes in the NBA shirt, why don't we cooperate and let you shock the NBA with the first player to sell the platform?"

On the GOAT website, there is a column called "Greatest", and you are publishing your own magazine. For a shoe trading website, these are not what you have to do.

Eddy Lu:GOAT is not just a trading platform, we do not want to buy and sell shoes, we should pay more attention to culture, and let the shoes return to their original culture and lifestyle.

Of course, trading and trading are definitely part of sneakers and two level shoes, but we want to raise your awareness so that everyone can know how they can wear and what pants can match your sneakers.

To educate everyone in the market.

The final result will certainly help your business.

What did you think of Flight Club before merging? What was the situation that led to the merger? After all, you were still a competitor before the cooperation.

Eddy Lu:Flight Club was founded in 2005, 13 years ago, and they were founded 10 years earlier than GOAT.

Flight Club is the first company to start consignment in the United States. They are the gold standard of physical retail in the shoe industry, so we worshipped them very much.

Then when GOAT started, we said that GOAT had to make online Flight Club, dominate the online App experience, and then compete with Flight, Club, and so on.

Then in February of last year, we decided to merge with the entity giant, because Flight Club also wanted to go digital, and GOAT wanted to integrate the experience of both sides.

We want to set up a physical store. Shoes are a thing to feel. You need to touch, dress, feel, or even smell the shoes.

This is a good "marriage" because Flight Club has 13 years of retail experience, and they can teach us how to operate a physical store.

GOAT has just set up 3 years, we have many places to learn from them, and we also help them in the aspect of technology.

When you talked about the rapid development of mobile phone terminals, did you feel that you need some more interesting things to stimulate the market?

Eddy Lu: we have been creating something new. Every year, black five will do special activities. You can buy the hottest shoes this year, the original price or lower than the original price.

GOAT's core is "innovation". We can grow up to the present because we bring new changes to the market and "disrupt" the market.

For last year's black five, you can unlock the purchase rights of your sneakers from the designated locations around the world through the AR mobile phone function, such as the first store in Nike history, the Kanye West mother's teaching university in Nanjing, etc.

What do you think of the traditional retail market? What do you expect of the new retail mode when you mention that you want to replace the traditional retail mode?

Eddy Lu: if you go to a ball store now, for example, Finish Line, there will be more than 200 pairs of shoes on the wall, but there are only the new models this year, and they are all sold out.

But if you go to Flight Club, there are more than 35000 pairs of unique shoes available for you to purchase. We can create unique experience for each user, and you can buy the shoes you want.

You can only see Air Jordan XXXIII when you go to Finish Line, but if you want to buy Air Jordan V, two years ago, you can't buy it. This is the biggest advantage that we think GOAT has. We are not just trying to replace traditional retail, but "disrupting" the order of traditional retailing.

GOAT was founded in 2015, but it can be side by side with Flight Club, founded in 2005. Does this also indicate that the consumption direction of the sports shoes market is now moving towards digitization?

Eddy Lu: Nowadays online shopping is so popular because consumers are more educated and more proficient in the use of the Internet.

When you use App, you can communicate with the whole world instead of going to the designated stores, which is why we can develop rapidly.

But I think the actual experience is still very important. Without Flight Club, the market will not be so large. Physical retail is a very important part of the industry. We will open more stores next, so we can feel the shoes ourselves.

In the rapid expansion of the sports shoes market, a lot of capital want to get market share with a lavish gesture. But I see you said in the interview that they will not expand the stores, only open a few stores. Why?

Eddy Lu: we know that a "brand image" is very important, Flight Club is a symbol of culture.

People visit the Flight Club store from New York and Losangeles all over the world, because this is a place to experience the culture of sneakers. If you have more than 1000 stores, it will dilute the feelings.

If you go to a traditional shoe store, there won't be too many people in it, but if you go to Flight Club, you will see many people inside, looking at shoes and experiencing culture, so the physical store is an important part of strategy.

Why do you think Flight Club will become a shoe punching card destination?

Eddy Lu: people go to Flight Club because there are the most choices there, with more than 4500 pairs of shoes hanging on the wall. This is the largest in the world.

They have a Grail Case, which has more than 1 million dollars worth of shoes and a box.

Flight Club New York has more than 60% customers who come from all over the world. You may not hear English there, but Chinese, French, Italian, Japanese and so on.

Do you think there are any problems in the market?

Eddy Lu: I think the biggest problem in the market is that maybe sneakers are too paction oriented, so we only focus on buying and selling, which is why we want to let you learn the culture of sneakers.

We are going to create content to tell you why sneakers are valuable.

One more thing, I heard that you are going to enter the Chinese market? Do you know the Chinese market?

Eddy Lu: now GOAT has more than 15% orders from overseas, China is the top five, and among the non English speaking countries, China's market is the biggest, because there are more basketball spectators than the United States.

We think China is a great opportunity, and there will be more orders coming from China later than in the US.

Entering the Chinese market also means that you will face more challenges from fake products. How do you plan to deal with this situation?

Eddy Lu: we have received a lot of fakes now, and a large part of them are from China, so we are also very good at identifying these fakes.

GOAT appraisers are the best in the world. We put most of our energy into the appraisal. When we open stores elsewhere, we will identify new warehouses for identification and ensure that our appraisal teams are professionally trained.

Of course, people always make mistakes.

If such a thing happens, we will refund it in full, then apologize and deal with it, but it doesn't happen very often. I can assure you.

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Can foreign shoe trading platform enter the Chinese market?

As the first online consignment platform, after several years of development, GOAT already has a relatively perfect experience and system of consignment, which has relatively certain advantages.

As a technology company, founder Eddy Lu is also a computer science student. It may bring some difference to users in the whole purchase process experience and form innovation.

If you have used the APP of GOAT, you should be able to feel certain difference. This is also the most proud thing for GOAT. It is to use the advantage of science and technology to provide more perfect service.

In the identification, quality inspection and other professional areas, it also used various "black technology", such as Eddy mentioned AI, machine learning, and then with manual detection, as far as possible to reduce the error rate.

And after entering China, it will set up a warehouse in China, which means that some trainers will also be matched in the warehouse.

At the same time, the entry of foreign platforms will give local consumers more choices.

There are always some "jet lag" problems in the sale of sports shoes nowadays. For example, foreign countries sell them earlier than domestic ones, and even some shoes do not sell at home. At this time, foreign suppliers can make up for this shortcoming, allowing domestic consumers to buy shoes they want.

Of course, the issue of postage, tariff and so on should also be considered.

In today's rapidly spreading information society, the speed of absorption and forgetting of information is directly proportional to the speed of the Internet. Every day, more attention is paid to sneakers, such as the price of the shoes, and whether the shoes are closed.

We often ignore the things behind the shoes culture, which is what we have been discussing with you all the time.

In addition to providing consignment services, GOAT has launched its own cultural magazine, Greatest, to build and build a cultural community of shoes, and to build a trading terminal. It keeps circulating from creating demand to meeting demand. This closed loop mode is relatively rare in China.

Magazines, special events, signing stars and so on are all helping fans understand this culture better.

Eddy also reveals to us that GOAT will be able to sign more stars or singers, actors and so on in the future, which is the most efficient way of publicity for the platform.

After merging with Flight Club, GOAT can supplement the retail experience of physical stores theoretically. Although the physical store is not the main way of revenue, it is the most important link to communicate with consumers directly. Consumers can feel the experience that digital network can not bring in the shop. This is why Flight Club can become a tennis shoe lovers' hit spot.

As Eddy said in the interview, the physical store is also an essential part of the shoe culture. If you have the experience of running a physical shop, you may develop more possibilities for the brand and the market.

Superiority does exist, but it does not mean "invincible".

It does not mean that foreign platforms will be able to crush China by relying on more experienced technology, and the problems they will face will be equally difficult.

The first is the domestic competitive atmosphere. From the various examples of life, we can sum up a law. No matter what aspects, the competition of the same type of products in China usually does not focus on how to improve service and better quality. It depends on capital confrontation such as "price war".

Takeaway, taxi software and so on all use the "lower price" to fight against competitors, so as to create a unique situation.

Under such circumstances, the higher cost of foreign platforms may cause greater pressure. In the price of foreign platforms, there will often be 10% to 20% yuan intermediary fees. Compared to the domestic platform, the intermediary fee is lower, and even for many new platforms, they will not take the form of intermediary fees to attract new users.

Excessive intermediary fees will increase the threshold for sellers to enter, and even if they are settled, high spillover costs will be allocated to buyers, resulting in price increases.

In such a "price war", how to adjust foreign platforms and break the domestic competitive atmosphere to attract Reseller is perhaps the first challenge to stand in this market.

Because...

If China's Reseller can not be attracted, the supply of goods will also be a big problem.

This is like a vicious circle. Without goods, there will be no users. Without users, there will be no source of goods.

China, as one of the largest fake production places in the world, can not afford to underestimate the power of counterfeit goods.

In terms of quantity or fidelity, China's fake products and American counterfeits are two levels.

For example, some time ago, Nike announced a new technology to combat counterfeit goods: adding anti-counterfeiting chips and two-dimensional code to shoes, sounds like a lot of reassurance. But a few days later, there was news on the Internet that counterfeit manufacturers in Putian had cracked the chip of Nike.

This kind of efficiency and technology may only be achieved by such a Chinese family. Therefore, the experience gained from overseas platforms may need to be constantly improved to cope with rampant fake products in China. Training will also spend more time, energy and money. How to adapt to the fake environment in China will be a big problem.

Finally, since the local platform has been developed over the past year, it has accumulated many users, such as poison, nice and so on.

At the same time, with the competition of Taobao's e-commerce platform, China's two class shoes market has almost been set up, and the share of the platform that can be left overseas has been very few.

This competitive pressure should be bigger than just starting a business.

Even though there are many advantaged advantages, there are still many problems for overseas shoe selling platform to enter China. In terms of price, fakes and market familiarity, they need to be studied.

At the beginning, I spoke with you. GOAT will enter China in the near future.

After entering China, can we bring some changes to China's two class shoes market? Let's wait and see.

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