Novelship Co-Founder, Richard Xia
Over the past decade, sneakers have seen a shift from being an item of sportswear to an acceptable standard of footwear, worn to everything from running daily errands to special events and even the workplace.
According to Statista, the global sneaker market was valued at approximately 70 billion U.S. dollars in 2020 and is forecast to reach 102 billion U.S. dollars by 2025, proving exactly how stable and bankable the industry is.
Zooming in on Southeast Asia, it is apparent how fast the sneaker culture is growing. Novelship, a Singapore-based marketplace for buyers and sellers to trade authentic sneakers, limited edition apparel, and exclusive collectables have seen considerable growth since its launch in 2018. Using proprietary technology and brand expertise, the platform ensures authenticity and quality using a system of meticulous product checks.
Since its introduction to the Malaysian market in 2019, Novelship has seen a 2,400% increase in the number of users. We talk its co-founder, Richard Xia about the success of the business.
Hi Richard, can you share the concept of Novelship and the inspiration behind it?
“Basically, we are the fastest-growing platform for limited-edition sneakers and streetwear. The reason why we set up this platform to serve the apex within the China region in the first place is that my co-founder and I have been huge sneakerheads for more than 10 years. So, as consumers of such products in this region, we saw several major issues at that point in time before the existence of Novelship. Number one is that the demand for such products is developing very, very fast among the youth, much faster than actual supplies. Many times, you’ll find it extremely hard to have direct access to authentic limited-edition products, even if you have the income, because up to 85% of the counterfeits also come from this region. This is a very serious issue. So this is where we come in. Our platform allows buyers and sellers to trade in a very safe environment. Every single item that gets traded on Novelship has to be shipped to one of our five processing centres around the region for physical authentication by our brand experts before it’s shipped up to the buyer.”
Can you describe your business model?
“It’s very simple. Based on a successful transaction, we charge a platform fee and a processing fee to our seller. On the other hand, we also charge delivery and shipping fees respectively to the seller and the buyer. On top of that, there are also additional value-added services like insurance and priority processing, so all of these are the different ways that we create a business model out of this transaction platform.”
In the early stages of establishment, what was the hardest or most challenging part of the business?
“Almost every area is hard. As you know, we are a two-sided marketplace; we have buyers and we have sellers. In the early stages, it was very difficult for us to attract both of them at the same time. Because if you go to the buyers, it becomes a question of ‘you don’t have that many sellers’ or ‘you don’t have that many supplies and products.” Then if you go to sellers, it’s the same thing – ‘why should we come on board when you don’t have that many buyers?’ So, I think that was the most challenging part for us at the beginning.”
Can you take us through the authentication processes for each item?
“Right now, we are present in six markets: Singapore, Malaysia, Indonesia, Australia, New Zealand, as well as Taiwan, with it being our newest. We currently have five processing centres located in Malaysia, Singapore, Indonesia, Japan, as well as Taiwan serving our regional markets. What goes behind the scenes as once a transaction happens, the seller is then notified to ship to one of the processing centres, depending on the more efficient shipping route for them. So let’s say if they’re in Taiwan, they’d ship to the Taiwan processing centre. That typically takes one or two days as we give them 48 hours to ship the item over. Once the shipping process begins, it takes one to two days to reach our processing centre in Taiwan. Within the processing centre itself, we have our authentication expert to look at the product, assess the quality and look for any signs of usage and identify whether the product is authentic or not. The entire process happens within a day is then shipped to where our buyer is. We have a lot of buyers buying products from different countries.”
What should a person look out for when he or she intends to resell?
“I think first and foremost when you procure sneakers with the intention to trade or resell them at some point in time, please ensure that you keep your shoes in proper condition. Make sure you find a clean, cool area to store your items. Also, I think a lot of buyers and sellers see an item that’s released many years ago and get put off by the yellowing but do note that’s actually normal. Even if you store your sneakers in perfect condition, there is still going to be a degree of yellowing because of oxidisation.”
As a sneakerhead, what do you think of the local streetwear culture both in Singapore and in Malaysia?
“I think that there’s huge growth in the sneaker-trading culture, especially into the mainstream, even though it has been a process in the making for more than 10 years. When we first started this platform in 2017, we spoke to a lot of investors, advisors, friends, and all of them were asking, ‘What are you doing? What’s this platform for shoes? Who would use it?’. It was very hard to explain to them at that point in time, but we knew that there was a very large underground trading market already in this region. Fast forward to today, you see what the young people are wearing? It has become very easy to explain why sneaker culture is going to take over the world.”
You’ve achieved quite the success in a short period of time. What would you advise for those who are looking to start up their own company?
“First of all, I don’t think we’re at the success point yet, I think there’s a lot of things to be done. But just based on my two cents and what we have done so far, I think the most important thing that I learned is to never take anything for granted. Always verify and do in-depth market research, whether there is even a market for work, service or whatever idea that you have in mind. That’s the most important thing. Because if you don’t, all of these ideas are just imaginary in your mind. If there isn’t a big enough market for you, then whatever you do subsequently doesn’t matter. Because you will hit your cap very soon, and you’ll realise that you can’t grow the business anymore. Additionally, if you think you don’t have as much information or knowledge, always make it a point to go to industry conferences or Zoom meetings and try to get connected with some of the industry people. Talk to them about it and supplement that with your own research.”
For more on Novelship, click here.
