From $300 bucket hats to $900 sneakers and $700 t-shirts, the high-flying luxury sector is fretting over the appetite among financially stretched Gen Z consumers for such "aspirational" purchases.Executives are troubled in particular by a hit to young Chinese shoppers, not only because mainland China has been a major driver of the industry's growth in recent years, but also because high end consumers in the world's second-largest economy are a decade younger than the global average of 38. Young adults around the world have been "a very strong factor of luxury growth over the past decade," said Gregory Boutte, chief client and digital officer at Gucci-owner Kering. Advt Data this week showed China's economy slowed unexpectedly, prompting a central bank rate cut, while macroeconomic trends are disproportionately impacting the extra funds that those born between 1996 and 2012 might use to enter the world of luxury. Whereas in North America and Europe, inflation and a rising cost-of-living are hitting discretionary incomes of young consumers especially hard, China's problem is different."In the U.S., inflation is a huge issue, the major focus of a lot of luxury companies ... In China, it's the youth unemployment rate that's alarming right now," Kenneth Chow, principal at consultancy Oliver Wyman said.
Ask anyone who’s into sneaker culture, and they’ll all agree on where it was born: New York. It started in the 1970s, when NBA scouts were turning their attention to street basketball players, and street style was coming into focus as a result. Breakdancing and hip-hop were budding forms of art. It was a moment undoubtedly driven by Black culture in America. “All of this intertwining of basketball, hip-hop and sneakers really started in the 1970s, and it’s also there that Black culture is infusing sneakers with a desirable sense of cool that starts to get capitalized on,” says Elizabeth Semmelhack, director and senior curator of the Bata Shoe Museum in Toronto. Meet Canada’s star sneaker resellers Today, sneaker reselling has become a US$6-billion industry globally, according to the financial services and investment bank Cowen. The most sought after limited-edition shoes command six-figure price tags in the reselling market and can be found on auction alongside designer goods at Sotheby’s, the New York-based auction house better known for dealing fine art and jewellery. The largest shoe brands like Adidas and Nike collaborate with major celebrities like Drake and Pharrell Williams in the quest to make the next iconic shoe.
From crude rubber-soled inventions, the footwear industry has evolved into a multi-level hydra where hip-hop, luxury, and sports all come together and control the cultural zeitgeist. The market has grown substantially over the last five years, progressing at a compound annual growth rate (CAGR) of 5.1%. But the industry owes its success to the hype and culture that was marketed around its products. We take a trip to the ’90s to learn how one of the most popular cultural phenomenons came into being. The tale has a perfect mixture of media, celebrity endorsement, and rebellion. The history behind the sole The year was 1984 and American apparel company, Nike was looking at breaking into the somewhat untapped Basketball footwear market. The brand had made a splash earlier with 1982’s Air Force 1, but the majority of superstars sported Converse instead. Around the same time, a young Michael Jordan was drafted into the NBA and was looking for an opportunity to seal his name in sports history. Nike set their eyes on the young player and decided to give him the deal of a lifetime, which involved a big contract and a shoe designed just for him. Thus the Air Jordan 1 was introduced in 1984 and gave rise to the culture of sneaker obsession. Everything was going as planned. Nike gave the product a massive marketing push with multiple TV spots, limited production numbers, and leverage of Jordan’s personality to its fullest extent. That is until one fateful day in October of 1984 when Jordan took the court in an exhibition game against the Knicks wearing sneakers that were predominantly red and black. During those days, the NBA had a strict code when it came to uniforms and it was mandatory to have footwear that was 51% white. So the NBA banned Jordan from playing in those sneakers. But the irony was that Jordan wasn’t wearing the Air Jordan 1. He was wearing a percussor model, the Nike Air Ship that had been made up in the Air Jordan’s black-and-red color scheme. Nike responded by doing two things: They created a version of the shoe that added white panels to the black and red upper, that met uniform regulations. And then they turned the ban into a famous TV commercial. Rumors even flooded around that Jordan had worn the banned shoes during games and that Nike picked up the fine.