Earning an additional $3 billion a week, "dark horse" On threatens to dethrone Nike and Adidas

(Dan Tri) - From a startup that attaches water pipes to shoe soles to a "running unicorn" worth nearly 20 billion USD, On - a Swiss brand is making two big sports companies wary.

While Nike and Adidas stocks have been in free fall since the start of the year, an upstart has been quietly gaining steam: Swiss running shoe brand On. In just one week, On’s market capitalization increased by $3 billion to a record $19.65 billion, making it the world’s third-most valuable listed shoe brand, behind only Nike and Adidas.

The $3 Billion Leap and the New Captain

In the first quarter, On reported a profit that exceeded expectations by 43% compared to the same period last year. For the second consecutive quarter, On has exceeded analysts' revenue expectations, an achievement that has given management confidence to raise its revenue and profit outlook for the full fiscal year.

This success has been fueled in no small part by smart and well-timed brand campaigns, most notably February’s blockbuster Super Bowl ad featuring tennis legend Roger Federer (who is also a major investor) and beloved cartoon character Elmo. With this growth momentum, the company remains steadfast in its long-term goal of doubling revenue between 2023 and 2026.

Ending a golden week of earnings, On's market capitalization hit a record $19.65 billion, a stunning jump from around $16 billion just a week earlier.

Investors seem to be going crazy and flocking to the stock of this Swiss running shoe brand. Currently, On has officially become the third most valuable listed sports shoe brand in the world, only behind the two "giants" Nike and Adidas.

On, a running shoe brand from Switzerland, has just "gently" pocketed an additional 3 billion USD in market capitalization, threatening to usurp Adidas and Nike (Photo: Getty).

Notably, On’s spectacular rise comes as the industry’s traditional giants are showing signs of slowing down. Nike’s stock has fallen more than 15% since the start of the year, while Adidas has seen its stock value fall more than 8%. On’s stock, on the other hand, has grown an impressive 8% over the same period.

Amid the explosive growth, On is preparing for a leadership transition. Martin Hoffmann, currently co-CEO and CFO, will officially take full control in July, after co-founder Marc Maurer leaves the company to start a "new chapter" in his career after 14 years with the company.

Hoffmann, a “financial wizard” who previously worked at the retail chain Valora, said he and Maurer have always run On as a team and have no “strategic blind spots.” The transfer of power will not change the company’s direction.

“On’s strength is not in the numbers, but in the people,” Hoffmann asserted. “I helped them reach their full potential. Now it’s just a matter of shifting the focus from finance to leadership.”

From water boots to a million-dollar brand for Gen Z

Few people expected that On's journey would start with a somewhat "weird" idea: attaching water pipes to the soles of traditional running shoes to increase elasticity. But thanks to its uniqueness and unexpected effectiveness, On quickly attracted young people who love innovation and style.

Instead of pouring money into massive advertising, On develops according to the word-of-mouth model, taking full advantage of the health care trend of young people, especially Gen Z - who "go to the gym more than to the bar".

“I think we’re benefiting a lot from the wellness trend that’s taking hold, where young people are going to the gym, yoga classes, or running trails instead of bars,” Coppetti said. The successful collaboration with actress Zendaya, a fashion icon and a huge influencer with Generation Z, has helped On score big with young consumers.

“We’re almost obsessed with raising brand awareness,” Coppetti readily admits. This positive obsession is evident in every strategic decision On makes, especially in how they approach retail.

On is moving from an online model to a highly selective physical expansion. It currently has 53 stores worldwide, each location carefully researched, even down to which street corner to open, to maintain its premium and exclusive feel.

In London, On's two stores are located in the posh Regent's Street and trendy Spitalfields areas, where up to 200 people join On's running clubs each week. On's team also often "disguise" themselves in large running groups to survey users.

“We go out on the streets, to the big races, and count what shoes and what brands of clothes people are wearing,” Coppetti said. “We do that even at sporting events.”

This “guerrilla” and hands-on approach is also applied by On at running events large and small. Currently, the Swiss brand has built a significant influence on athletes from short distance to half marathon.

The company hopes to reach even more long-distance marathoners when it officially launches its "super shoes" (high-performance running shoes, often equipped with carbon soles) later this year, a move that is expected to heat up the competition.

Challenge: Fad or Lasting Brand?

Of course, On’s path to the top has not been all roses. As a relatively new brand compared to the century-old names, On has not really had to face and prove its ability to withstand the possible decline in market demand during an economic recession. Concerns that this is just a “fad” still linger, like a lurking ghost.

Despite its strong expansion into the strategic US market, the Swiss brand is not immune to potential tariff risks, similar to other competitors.

Still, On plans to raise prices this year—a decision the company says is unrelated to tariffs. And new CEO Martin Hoffmann remains confident that customers will remain loyal to the brand, even if the journey ahead is bumpy and challenging.

“We want to be a global premium sports brand. The word ‘premium’ is at the core,” Hoffmann asserts. “When you have a North Star to aim for, you can’t get lost, even in uncertain times.”

Can On maintain its meteoric rise and truly disrupt the decades-long dominance of Nike and Adidas? Only time will tell. But one thing is for sure, the Swiss has written an inspiring new chapter of innovation, boldness and boundless ambition.

Source: https://dantri.com.vn/kinh-doanh/kiem-them-3-ty-usd-mot-tuan-ngua-o-on-de-doa-soan-ngoi-nike-va-adidas-20250518210904669.htm