2024 JULY ISSUE
INTRODUCING ON
THE SWISS SPORTS BRAND
Written by Andrew Sia
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From the Desk of the Publisher
With all the multiple sports brands out there and to distinguish the up and coming ones is not an easy task. The brand has to have what we call “unique-selling-point” or USP. This requires unique ideas and intelligent marketing strategy to gain the acceptance from both the runners and the everyday people.
We have found the brand, On, who just achieved its goal. I like the brand’s attitude as quoted by one of its founder, David Allemann, “It’s a marathon and not a sprint.”
I am equally impressed to find that they are the only brand who take their running shoe “from cradle to cradle” which addresses what the industry has been struggling—sustainability. I must say, “Kudos to you, On.”
On, also known as On Running, is probably the world’s youngest sports shoes brand, was founded in 2010 by a three-time duathlon champion and multiple ironman winner, Olivier Bernhard, together with his friend, David Allemann, who worked in marketing, and Caspar Coppetti, who was a strategy consultant at McKinsey & Co.
Olivier Bernhard, better known as the Swiss Ironman champion went for hiking from the Alps with his two best friends, David and Caspar, came back with an idea to put their dream to work. They came up with the On shoes with its “cloud sole” which has large square holes in the foam sole that compress to provide cushioning without the need for thicker soles. It is their proprietary cushioning technology, known as CloudTec, that made them famous and unique. It is also considered as the world’s lightest trainers.
On is known as the shoes with holes in the soles, is becoming a multibillion-dollar unique-selling-point. Its futuristic look made it poplar among runners and well-received by those normal pedestrians.
In 2021, On raised $746 million in its IPO and since then it has seen the shares rise 57% in 2023. The market situation has been tough with too many players. Sales of athletic footwear in the U.S. increased just 2% in the year to November 2023 as it was reported. it was the drive from revenues with price increase rather than a growth in the number of shoes being sold. Amer Sports raised less money in its February IPO. Allbirds revenue was down 21% in the third quarter of 2023. Nike’s overall sales, encompassing all its sports categories, rose 10% to $51 billion. The company is not confident for its performance in 2024 and expected low percentage increase. UnderArmour is still struggling to become known in the footwear sector. We have seen the same attempt by Lululemon.
On’s CEO and CFO, Martin Hoffmann, is expecting the brand to double its sales by 2026 to $4 billion. The brand is moving into other sports categories. On has 23 dedicated running styles currently but has the 10-15% of footwear sales in specialty running stores. So that we know, Nike has 115 different styles of running shoes.
In 2023, Kenyan Olympian Hellen Obiri won the Boston marathon wearing On’s carbon-plated race show, known as CloudTri 1.
In its On Lab based in Zurich, it views its technological innovation as a means of creating a new generation of environmentally friendly shoes. On has one of the main differences with its competitors like Nike or Adidas, who are using materials from recycled plastic bottles for their sustainable practices. Currently, 30% of On’s shoes are made free of fossil fuel materials and 100% of the products will be in recycled materials by 2025.
In its headquarters in Zurich, an on-site lab as mentioned before, is also an incubator hub. The lab team spent fulltime in making shoes and apparels from captured carbon emissions and turned them into pellets, then into yarns and soles. It also breaks down its bio-based Cloudneo sneakers and turn them into brand new shoes. It has partnerships with three external firms in the research and development.
It has a pioneering subscription service known as Cyclon which allows runners to rent a pair of Cloudneos for $29.99 a month and return them once they are worn out to be swapped for a new pair. It is so far the only sportswear company to take ownership of products at their end of life and thus addressing runner’s waste problem. So that we know a running shoes generally wear out after 300 miles.
Currently On has 22 stores in China, two stores in London and two in New York. It is going to open shops in Paris, Miami, Portland and Austin. It is only available in sports specialty stores, such as Runners Need, Achilles Heel, Foot Lockers and even department store like Bloomingdale’s
David Allemann said, “It’s a marathon and not a sprint.” Its investors are keeping an eye of the podiums and the pavements, but the founders are looking skyward, towards the clouds.
We look forward to see On’s success in all sports arena.