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How sneaker seller GOAT thrived amid global supply chain issues

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GOAT Group Co-Founder & CEO Eddy Lu joins Yahoo Finance Live to discuss how the sneaker market is recovering after a pandemic slump, supply chain disruptions, the top sneaker per market, and the possibility of entering the NFT space.

Video Transcript

- Well, the sneaker industry was on shaky ground last year dealing with release dates and constant flux to brands suffering from shutdowns and factories across Asia. But despite those slowdowns, the race is on as sneaker sales are expected to accelerate in the coming years. Here with more and to talk about that and trends in the industry is Eddy Lu, GOAT Group's co-founder and CEO, along with Yahoo Finance's Dani Romero. Thanks so much to you both for being here.

Eddy, I want to start with you. So you have multiple locations. Many across the globe-- something like 13. What has the last year been like for you as far as sales and being able to navigate all of the supply chain issues that have come up because sneaker brands were hit hard?

EDDY LU: Hey, great to be here. Thanks for having me. And the great thing about GOAT is that we don't just have one seller where we depend on supply. We have over 700,000 sellers around the world that have supply on hand. So you're always going to find what you want on GOAT.

And it's not just this year's styles that are impacted by some of the supply chain issues. We have styles from this year plus past catalogs. And so, you know, if you want the sneaker from five years ago, 10 years ago, we have that on GOAT. And so that's-- it's been a record-breaking year for GOAT.

DANI ROMERO: And Eddy, it's Dani. So from the data that you collected, you know, Nike was one of your top-selling brands. But Nike was one of those brands that also suffered from supply chain disruptions. Do you think those brands will rethink or reconsider doing business somewhere else? Do you see that in the future?

EDDY LU: In terms of supply chain, like I mentioned, I mean, given that we sell in so many different countries, we didn't see as much of a supply chain impact as some other companies. And given that international is such a big part of our growth, there were so many different kind of-- and every country had its own top sneaker. And what we saw was it wasn't just Nike. I mean, yes, Nike was a big hit in English-speaking countries, like the US, in Canada, the UK.

But in the Middle East, for example, Yeezys were the top sneaker of the year. And so in Saudi Arabia and the Emirates, Yeezys were really sought after. In Japan, our top-selling sneaker was a New Balance. So I think you're starting to see trends where it's not just being Nike dominated. But, of course, Nike is a very important part of the ecosystem.

DANI ROMERO: And also another thing is we're seeing that the secondary market is now becoming the primary market. Can you talk to us a little bit about how that is the evolution of that?

EDDY LU: So, of course, with sneakers and apparel, in general, you have primary sales. But once those products sell out in store, they're just where does the consumer go to buy products? And now that there are companies like GOAT out there, we're seeing that GOAT's just becoming kind of the best place to buy sneakers and fashion on the internet because it's the first place you go to.

You don't want to deal with kind of not being able to you're going to a store and not being able to find product or going to manufacturer's site and it being sold out. So we're seeing that our customers are just coming to us directly. And you mentioned the primary site as well.

We're starting to work with some of the best brands in the industry to sell directly on GOAT right next to our network of 700,000 sellers. So, for example, Balenciaga, Versace, Alexander McQueen all sell directly on GOATs. So the consumer gets the best of both worlds both from the primary and the secondary markets.

ALEXIS CHRISTOFOROUS: You know, Eddy, good to see you again. I'm wondering if you are looking at getting into the NFT market there at GOAT when it comes to sneakers. I know StockX is doing it already. Shaquille O'Neal is looking at the possibility. And how would that work since sneakers-- you either want to wear them. They're very tangible, right? So how would a digital asset of sneakers work into the equation?

EDDY LU: Hey, Alexis. Well, our digital lives are being increasingly important. And it's definitely something that we look at. We actually started this kind of cross section between the digital and physical with our Black Friday campaign. We called it Spaces where our consumers were dropped into virtually themed worlds where they could access our products in different settings. So we're already on the kind of digital physical train and definitely stay tuned for more.

- And Eddy, just touch on the fact that there has been such a huge rise in luxury brands getting into the sneaker market. You name the brand-- top brand-- Chanel, Balenciaga-- as you mentioned. They all have a sneaker. And that's attracting like, my daughters to wear sneakers more than they have before. So I'm wondering, are more and more women coming into the sneaker house, as well, if you will?

EDDY LU: Great question. And definitely, I mean, when we started seven years ago in 2015, we were primarily a limited edition, kind of Jordan and Yeezy marketplace where it was predominantly males as we've incorporated luxury and fashion. And like you mentioned, a lot of the luxury houses have amazing sneakers and collaborations with some of the top sneaker companies such as Nike and Adidas. So we're seeing that the female demographic represents 40% of our consumer base now and growing.

ALEXIS CHRISTOFOROUS: I want to step away from sneakers for a moment and ask you about these so-called hype bags that seem to have become even bigger than sneakers for some folks, these crossbody bags that guys are wearing. I mean, they're pretty high end. Gucci or Mezz has theirs. What's that market looking like for GOAT?

EDDY LU: Definitely on the accessory side. It's one of our fastest growing markets. Apparel and accessories have grown so much year over year. And we're continuing to invest time and product into giving these options to our consumers.

So we're excited. I mean, fashion spans. All genders, it spans. We say that a lot of our products are unisex these days. So continue to be excited about the options for our female and male consumers.

- OK, Eddy Lu. GOAT Group co-founder and CEO. Thanks so much for stopping by along with Yahoo Finance's Dani Romero.

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