As people become increasingly health-conscious and active, the athletic footwear market continues to grow. Swiss performance apparel brand, ON, designs, manufactures, markets, and sells its own sports clothing and running shoes, and has carved out a unique premium niche by creating shoes that enhance the running and training experience.
ON’s core product line includes a variety of running shoes that utilize innovative technology to reduce impact and increase comfort. The brand offers a range of unique technology systems and materials providing everything from advanced shock absorbing capabilities, powerful take-offs, and smoother, effortless runs, to enhanced traction and grip whatever the terrain. The company even offers an innovative subscription service.
With a customer base made up of runners and fitness enthusiasts from around the world, the company has already built a strong presence in Europe and the United States, and is now also expanding into Asia and other emerging markets.
Currently in a high-growth stage, focused on broadening its global reach, ON continues to invest heavily in research and development, marketing, and new product offerings, as its growth strategy includes increasing brand awareness, expanding distribution channels, and developing new products that cater to the needs of its performance-seeking customers.
The ON story all started in the Swiss alps when retired athlete, Olivier Bernhard, wanted to create a running shoe with a totally new feel. Teaming up with Caspar Coppetti and David Allemann, also former professional athletes, their goal was to create the most high-performance shoe ever.
They had a vision to create a new type of running shoe that combined the benefits of natural running with the protection and comfort of traditional shoes. The trio inspired by their own experiences and needs as runners to create a product that would help reduce injuries and enhance performance, came up with the experience of “running on clouds” with cushioned landings and power take-offs.
ON’s first product was the CloudTec running shoe, which was launched in 2010. The shoe was an instant success, receiving positive reviews from runners and industry experts alike. The company quickly gained a following and began to expand its product range, introducing new models and styles of running shoes, as well as apparel and accessories.
In addition to expanding its product range, ON has also expanded its geographic reach, establishing offices in several countries, including the United States, Japan, and Australia, to support its international growth. It has also built a network of retail partners and distributors around the world.
Olivier Bernhard, a former three-time world duathlon champion and professional triathlete, brought his expertise as an athlete and engineer to ON. His experience in product development and design has been instrumental in the company’s success, as he was responsible for the initial shoe design.
With a background in branding and design, Caspar Coppetti, a former professional snowboarder and graphic designer, helped to create the company’s iconic logo, which features three curved lines representing the company’s core values of design, functionality, and technology. Coppetti also oversees ON’s marketing and brand strategy, working to build the company’s global presence and connect with customers around the world.
While David Allemann, a former professional footballer, has brought his experience in business and marketing to ON. He was responsible for securing the initial funding for the company and has played a key role in developing ON’s business strategy and building its international distribution network. Allemann is known for his innovative approach to business and his commitment to sustainability, which has helped the company establish itself as a leader in the global running shoe market.
Since its founding in 2010, ON has become one of the fastest-growing running shoe companies in the world, with its success due in large part to the vision and leadership of its co-founders, who continue to drive ON’s growth and innovation today.
ON offers a range of innovative and high-performance footwear, apparel, and accessories for athletes and people with an active lifestyle. Their products are designed to help users to perform at their best and to prevent injuries. With a focus on innovation and sustainability, the company has developed a strong following of fitness enthusiasts around the world.
One of ON’s most popular product lines is its running shoes. With a variety of styles and colors, the shoes are designed to provide the perfect balance of cushioning and support for runners of all levels. Every ON shoe includes CloudTec technology, which consists of individual “clouds” that cushion the foot, absorbing impact, reducing strain, and providing a smooth and stable ride.
Their shoe lines also feature a range of unique proprietary technologies including:
– Speedboard – which bends and flexes, converting the kinetic energy of each landing into a powerful take-off with more speed, for the same effort.
– Helion – a super foam for superior performance and smoother and more effortless runs
– Missiongrip – which gives enhanced traction with a carefully crafted grip-rubber compound that helps runners stick to the ground
While the company’s range of Cyclon recyclable running products uses bio-based, high-quality, and renewable materials to create a line of shoes and apparel designed to be recycled and transformed into new products. In September, the brand unveiled the first shoe made from carbon emissions, called Cloudprime, which was seen as a huge milestone, not only for ON, but for the whole sports industry as a move away from petroleum-based resources.
In addition to running shoes, ON also offers a range of apparel and accessories. Their apparel is designed to be comfortable and functional, with features such as moisture-wicking fabric and breathable materials. While accessories such as hats, gloves, and socks aim to help athletes stay comfortable and perform at their best.
ON’s products are used by a wide range of customers, including professional athletes and fitness enthusiasts. They are quickly becoming a brand favorite in the running and triathlon communities, and many high-profile athletes and teams including the Swiss Olympics and Red Bull Skydive teams, among many others, are choosing ON for their superior performance and innovative design. Their products are also popular among everyday athletes and people who are simply looking for comfortable and high-performance gear.
ON now has a global presence, with customers in over 60 countries around the world thanks to a strong e-commerce presence. The company’s online store features its full product offering and provides the ability to build valuable intelligence through direct conversations with customers. In addition, a network of retail partners includes sporting goods stores, specialty retailers, and department stores. While flagship stores are in major cities such as New York, Zurich, and Tokyo.
With innovative technology and strong brand positioning, ON has been proving itself a formidable challenger against incumbent giants like Nike and Adidas, not only attracting a loyal following, but experiencing significant top-line growth in the past few years. And the company is persevering with several strategies in place to continue this growth, including expanding its product line, investing in marketing and sales, and expanding into new markets.
New product lines are continuing to target shoes for a wider range of activities across trail running and outdoor endeavors, allowing ON to reach a broader audience and appeal to runners with different needs and preferences. While heavy investment in marketing and sales to expand its customer base, has seen the company partnering with influencers and high-profile athletes to promote its brand and products.
For expansion into new markets, ON has been growing its retail presence in key territories such as the US and China. There has been a particular focus on expanding its direct-to-consumer sales channels, specifically, investing in its e-commerce capabilities, and launching new online platforms such as a partnership with the WeChat e-commerce mini program in China. These initiatives are aiming to make it easier for customers to purchase its products directly from ON, while also making its products available to customers in new regions.
In addition, ON has been partnering with distributors and retailers to expand its touchpoints and reach new customer segments. Retail partners are carefully selected across wholesale channels including select third-party online-only platforms, based on their compatibility with ON’s premium brand, positioning in the market, and industry expertise.
Going forward, ON also plans to open a limited number of additional retail flagship stores in major metropolitan centers as well as athletic destinations, where it believes it can operate profitably and create further brand momentum.
Appealing to serious athletes, ON has experienced rapid success and impressive top-line revenue growth in recent years. The company’s net sales for the first nine months of 2022 reached CHF 855.4 million, up 60.3% compared to the same period in 2021, This performance was driven by strong growth in the wholesale channel of 55.6%, well supported by new product launches in 2022. While direct-to-consumer sales rose over 40%, and exceptional growth of 85.2% was achieved thanks to new accounts in the Asia-Pacific region.
In its latest quarter, ON also delivered a gross profit margin of 57.1%, and despite foreign exchange headwinds and temporary supply chain constraints, the company recorded a net income of CHF 20.6 million.
ON is raising its previous guidance by CHF 25 million and now expects net sales of CHF 1.125 billion for the full year 2022, marginally lower than consensus expectations which have the company hitting $1.22 billion in the year, for an impressive 57% year-over-year increase. While full-year earnings per share are forecasted to come in at $0.33, an enormous 126% improvement, up from $0.15 in 2021.
Operating in a market with fierce competition, ON is up against well-established global players like Nike, Adidas, Under Armour, Puma, and Reebok, which benefit from significant resources, mature supply chains, and ubiquitous brand recognition. However, the company’s strong focus on creating unique practical technology coupled with superior performance and quality have provided key competitive differentiators against the incumbents.
Furthermore, a key market development in recent years is a significantly increased importance of sustainability and eco-friendliness in consumer buying habits, for which its recycled lines and unique materials have specifically targeted.
ON has experienced significant success and rapid revenue growth in recent years due to its unique product offering and strong brand positioning evolving from its Swiss home. With the company continuing to expand its product line, customer segments, and geographic footprint, it appears well-placed to continue its rapid growth trajectory.