HYP CEO Hayoung Park says brands are leaving money on the table, particularly when it comes to how they treat the “tainted” secondary resale markets.
The New York-based founder backs up his claims with key lessons learned from building a 300-pair shoe collection over the course of four years.
“I bought and sold apparel based entirely on what Kanye West, A$AP Rocky, and Playboi Carti would wear,” he explains, adding that prominent socialites’ fashion pieces would increase in value exponentially when their pictures would circulate on social media. Frontrunning the resale markets allowed Park to capture hundreds of percent of profit.
“The brands were not participating in the data collection or this profit,” he adds. This led him to draft the idea of HYP.
Park spoke with executives at Supreme, Louis Vuitton, and Prada; he fine-tuned HYP, making it what it is today: an auction house with social and dynamic pricing layers.
Maximizing Validation Per Dollar
HYP claims to yield thousands of percent or more in profit for brands while generating millions more in media impressions without a single dollar spent on advertising. The auction house partners with brands to launch and auction exclusive releases. Naturally, the brands’ engagement and turnover on general releases increase, too.
“On our last seven auctions, we spent $0,” Park says on social media helping elevate the clout of the bidders and clothing, accordingly. “The auctions generated over 13 million impressions and about $900,000 in inbound bids. That was possible because HYP maximizes for the consumer and validation per dollar.”
Users connect their social media to HYP accounts. When users bid or purchase apparel, they are able to see more information about each other, and that generates engagement; prices are more so the result of cultural signaling and clout, rather than the quality of the apparel.
“Traditionally, when you spend $50,000 on Louis Vuitton, you are flexing on your immediate follower group,” Park explains. “When you’re spending $50,000 on HYP, you’re getting impressions from millions of people who may not know you. Often, we see bidders getting hundreds of thousands of impressions on their Instagram, too, and it’s part of the reason why these resale markets continue to perform well while the general economy may be a bit shakier.”
Dollars, Influence, And Exposure
“Your incentives for bidding are completely different than they are on eBay, Sotheby’s, or Christie’s,” Park says. “On those platforms, everyone bids in the last couple of minutes. On HYP, most of the bidding activity happens in the first 36 hours because people are flexing, and they are incentivized to raise the price on themselves. Its social validation on a much grander scale.”
Park, a college dropout, was able to raise over $1.3 million at a $12 million valuation from the likes of Jake Paul’s Anti Fund, the Palm Tree Crew originally founded by Kygo, among brand executives from VF, the company behind Vans, The North Face, Timberland, and Supreme.
“Brands recognize that we are an inflection point for virality and elevation of status because price serves as a reference point to tell users how much to care about something,” Park explains. “From the start, we thought about how to get the masses to care about the general release products that come after. It boils down to dollars, influence, and exposure.”
Life After Proof Of Concept
Park says he went against his parent’s wishes and left school to pursue HYP full-time. The proof of concept was well received, and he is confident that HYP will become mainstream.
Park remains focused on involving more brands and building tools to elevate legitimacy, something the likes of StockX, Sotheby’s, and Christie’s still struggle with.
“Generally speaking, the factories making goods for luxury brands do not pay employees that well,” Park alleges, citing a 2012 story where one Chanel factory had its serial numbers stolen. “Often, you’ll see backdoor relationships form, and factory employees will sell units marked as defective, burned, or discarded. These units will end up on the resale market, and it decreases the value of the brands significantly.”
HYP can claim legitimacy because apparel comes directly from the brands; HYP never touches the inventory. To solidify and elevate its position in the market, Park adds that he is working on new solutions such as embedding chips into products and linking back to a digital ownership certificate or users’ social media profiles.
“We could let you transfer this digital legitimacy and ownership, instead of just the physical ownership,” he says. “The clout is the utility and the utility only matters when it is social.”
Produced in association with Benzinga