Sneakerheads and streetwear enthusiasts themselves, Richard Xia and Chris Xue founded Novelship in Singapore in 2018. Four years after its inception, the platform has become Asia’s fastest growing online marketplace for authentic, limited edition sneakers, apparel, and collectibles.
Retail in Asia had the pleasure to interview Richard Xia, CEO and Co-Founder of Novelship. Together we discussed Asia’s streetwear and sneaker culture, their thorough authentication process, their cross-border strategy and future plans.
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RiA: Why did you decide to launch Novelship?
Richard: Chris (my cofounder) and I have been long-time sneakerheads and streetwear enthusiasts, as market participants we understood that locally it was really difficult to buy and sell without worrying about fakes, encountering many ourselves. After previously starting a few companies together we settled on this as our passion project, selling our own sneaker and streetwear collections to raise our initial capital.
RiA: Can you elaborate on the streetwear and sneaker culture in Asia Pacific and especially in Singapore where you first launched Novelship?
Richard: Sneaker and streetwear culture in Singapore has been around a long time, only recently with the rise of social media and the internet in general has this culture become commonplace. A lot of local users are in the game to sell and earn a profit, oftentimes using their earnings to fund their sneaker collections. There is also the group of original collectors that are diehard enthusiasts and hate the whole culture of reselling. Compared to markets like the United States that matured alongside hip hop and basketball culture, Southeast Asia and APAC in general are perhaps a bit less developed, however it is rapidly catching up in terms of culture and value.
RiA: Can you tell us about your customer base?
Richard: Our customer base primarily consists of millennials and Gen Z consumers, generally capping out around 35 years old and going as low as 13 to 14. In this group, it’s primarily male, with the female segment growing quickly fuelled by strong female-focused releases by Nike and Air Jordan. In terms of markets, our users are spread out across Singapore, Malaysia, Indonesia, Taiwan, Australia, and New Zealand for the most part.
Within this group tends to be two sub groups, resellers looking to make money off the platform, and collectors, enthusiasts that are into sneaker culture and have been since the beginning. There is of course overlap between the two.
RiA: Novelship sells sneakers, streetwear and collectibles. What’s your best-selling product category?
Richard: Sneakers are our best-selling vertical by far, making up the vast majority of our market share across APAC. Apparel comes next with collectibles and others at a distant third. We have been sneaker-obsessed since day one, and we have spent the most time growing this market segment. Only recently have we begun diversifying into other verticals to fuel our growth and we are seeing success here. Apparel offers new users a great chance to join the culture at a more affordable price point.
RiA: Is there a difference in demand and design preference in the different APAC markets you are operating in?
Richard: Certainly, from our internal data we can easily view which brands and models sell best in each market, for example Air Jordans dominate Australia and New Zealand, whereas Taiwan is more focused on Nike offerings. Across all markets though it is clear that Nike and its subsidiary brands dominate in terms of market share, with New Balance gaining ground rapidly year over year.
RiA: What’s the average price of the items sold on Novelship? What are the most popular designs? How many items do you sell on average every month?
Richard: Our average order price floats between SGD 300 to 400 (US$222 to $297) depending on the month and what items have dropped. Air Jordan 1 Highs are the top selling silhouette by far, making up significant market share. Nike SB Dunk Lows are also resurgent over the past few years and command the highest retail premiums, meaning they are great for reselling. In terms of volume we are moving around more than 30,000 products on a monthly basis across APAC.
RiA: What sets Novelship apart from the other marketplaces?
Richard: Guaranteeing authenticity is what originally set us apart from other players in the region. Before our launch a lot of sneakerheads were using Carousell and Facebook groups to cop their kicks, and there were a lot of fakes circulating in the market leading to a huge amount of disappointment for buyers. We came in and assured buyers that everything they bought or sold on Novelship was authentic, the community appreciated it and we grew accordingly.
Globally, we have also had to adopt a cross-border mentality from the beginning, without the advantage of a massive domestic market such as the United States we started optimising for many different markets almost immediately. This has enabled us to serve traditionally neglected markets such as Malaysia and Taiwan, even Australia and New Zealand.
RiA: Can you elaborate on Novelship’s quality check and authentication process?
Richard: This gets asked a lot, and unfortunately we cannot go into too much detail regarding our process as it is all unique to our business. What I can say is that our team members are rigorously trained to ensure they are capable of spotting fakes, and we check details such as the inseam stitching, font placements, material quality, etc. to make these decisions. Our process has been honed over the past several years to ensure we do not circulate fakes throughout the market.
RiA: Let’s talk about Novelship app. How is it performing?
Richard: Today’s consumers are mobile first, we noticed for a long time before we had the app that over 80 percent of visits to our site were via mobile. With data like that it was patently clear we needed to release a mobile application. Beyond consumer preferences though, mobile apps give you more tools to keep users engaged and coming back for more, such as push notifications which generally perform much better than email direct messages.
Performance wise we are doing well, we’ve seen tremendous growth on the app and broken into some top ten charts around APAC.
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RiA: What’s next for Novelship?
Richard: Right now we are focused on developing our apparel and collectible verticals, as well as market expansion with sneakers. Our users have a big overlap with crypto enthusiasts. So we’re definitely exploring opportunities in the metaverse – do keep a lookout for things to come.