On Running’s Ascent: Challenging Athletic Wear Giants
This video explores the remarkable rise of On Running, a Swiss sneaker company that has rapidly emerged as a formidable challenger to established giants like Nike and Adidas. Delving into its unique strategies, innovative products, and market positioning, the report highlights how On has carved out a significant niche in the highly competitive athletic wear industry.
Explosive Growth and Distinctive Design
Since its 2021 public offering, On Running has demonstrated explosive growth, with net sales soaring in 11 of the past 13 quarters, significantly outpacing its competitors. A key driver of this success is the brand’s unique aesthetic, particularly its main running shoe line featuring large hollow pads in the sole for enhanced cushioning. This distinctive design has not only attracted a loyal customer base but also differentiated On in a market where many running shoes previously shared similar appearances.
Performance, Premium Positioning, and Strategic Partnerships
Initially perceived as a lifestyle shoe, On strategically pivoted to emphasize high-end performance, a move that significantly elevated its brand image. Endorsements from Olympic athletes, such as Helen Oiri winning the Boston Marathon in On’s Lightray shoes, have solidified its credibility among serious runners. Furthermore, On targets wealthy shoppers with shoes typically priced at $150 or more, deliberately avoiding low-end price points and retail spaces. Partnerships with global icons like Roger Federer and celebrities such as Zendaya have further expanded its reach and appeal.
Market Dynamics, COVID-19, and Competitive Landscape
On’s rapid ascent was also serendipitously aided by broader market shifts. The COVID-19 lockdowns led to a boom in recreational running and athleisure, creating a fertile ground for growth. Concurrently, Nike’s decision to scale back retail partnerships, over-rotating towards direct-to-consumer sales, created a vacuum in prime retail spaces that On was quick to fill. While Nike still commands a substantial 40% of the global sports footwear market, On’s share, though smaller, has increased eightfold since 2019, indicating a significant shift in the competitive landscape.
Future Expansion and Tariff Headwinds
Looking ahead, On plans to double its store count and expand its apparel offerings, aiming for continued growth. However, the company faces potential challenges, notably proposed tariffs on goods manufactured in Vietnam and Indonesia, where approximately 90% of On’s products are made. Such tariffs could lead to price hikes for consumers. Despite these headwinds, analysts suggest On’s premium brand positioning and pricing power may enable it to pass on these costs and sustain its growth trajectory, with ambitions to become a $10 billion frank brand.
Final Thoughts
On Running’s journey from a startup to a significant player underscores the power of innovation, strategic branding, and market adaptability. While facing ongoing competition and economic pressures, its strong brand identity and loyal customer base position it well for continued influence in the global athletic wear market.
Vocabulary Table
| Term | Pronunciation | Definition | Used in sentence |
|---|---|---|---|
| gaining ground | /ˈɡeɪnɪŋ ɡraʊnd/ | To make progress or become more popular or accepted. | The brand on sells premiumbric athletic wear and is quickly gaining ground on legacy competitors. |
| legacy competitors | /ˈlɛɡəsi kəmˈpɛtɪtərz/ | Older, established companies in a market that have been around for a long time. | The brand on sells premiumbric athletic wear and is quickly gaining ground on legacy competitors. |
| stalling growth | /ˈstɔːlɪŋ ɡroʊθ/ | A situation where growth slows down or stops. | At the same time, AN’s biggest competitor, Nike, has faced stalling growth. |
| controversial partnership | /ˌkɒntrəˈvɜːrʃəl ˈpɑːrtnərˌʃɪp/ | A collaboration or agreement that causes a lot of public discussion, disagreement, or disapproval. | Adidas has also faced challenges in recent years and has ended its controversial partnership with Kanye West. |
| under pressure | /ˈʌndər ˈprɛʃər/ | Experiencing demanding or difficult circumstances. | But AN is also under pressure as tariffs proposed by the White House threatened to raise prices. |
| import duty | /ˈɪmpɔːrt ˈduːti/ | A tax imposed on goods brought into a country. | Vietnam, which President Trump has said could face a 46% import duty. |
| turnaround | /ˈtɜːrnˌaʊnd/ | A sudden and unexpected improvement or change in fortune. | Nike is also undergoing a turnaround under its new CEO, Elliot Hill. |
| market share | /ˈmɑːrkɪt ʃɛr/ | The portion of a market controlled by a particular company or product. | The company is aiming to win back market share it lost during the past few years. |
| propelled | /prəˈpɛld/ | Driven, pushed, or caused to move in a particular direction. | But analysts say what has propelled the brand is the unique design of its main running shoe line… |
| high-end performance | /ˈhaɪ ˈɛnd pərˈfɔːrməns/ | Referring to products or services that are of superior quality and often more expensive, designed for optimal functionality. | On shoes weren’t always taken seriously as high-end performance products. |
| doubled down | /ˌdʌbəld ˈdaʊn/ | Increased one’s commitment to a particular strategy or course of action. | To elevate its brand image, on doubled down on performance and company-owned stores… |
| serendipitous | /ˌsɛrənˈdɪpɪtəs/ | Occurring or discovered by chance in a happy or beneficial way. | So it happened to be very serendipitous for them to be able to get that retail space… |
| overrotated | /ˌoʊvərˈroʊˌteɪtɪd/ | To have gone too far in one direction, often leading to an imbalance or negative outcome. | It does appear, according to analysts, that Nike overrotated toward the direct to consumer. |
| headwind | /ˈhɛdˌwɪnd/ | A factor or force that makes progress more difficult or slower. | Any additional cost could be a significant headwind for the sportsear industry. |
| pricing power | /ˈpraɪsɪŋ ˈpaʊər/ | A company’s ability to increase its prices without suffering a significant loss in demand. | On has pricing power in the market and so most likely what you will see in the industry is that tariffs will just be passed on to the consumers over time. |
Vocabulary Flashcards
Lexical Focus: Collocations & Chunks
Don’t just learn isolated words—learn chunks of language. These patterns will help you speak more naturally.
-
gaining ground
Verb + Noun Collocation
The brand on sells premiumbric athletic wear and is quickly gaining ground on legacy competitors. -
stalling growth
Adjective + Noun Collocation
At the same time, AN’s biggest competitor, Nike, has faced stalling growth. -
under pressure
Fixed Expression
But AN is also under pressure as tariffs proposed by the White House threatened to raise prices. -
win back market share
Verb + Noun Phrase
The company is aiming to win back market share it lost during the past few years. -
soared ahead of
Phrasal Verb + Preposition
And on stock price has soared ahead of its competitors. -
doubled down on
Phrasal Verb
To elevate its brand image, on doubled down on performance and company-owned stores… -
played a key role
Verb + Noun Collocation
Analysts say that timing played a key role in rapid rise during co lockdowns. -
scaled back retail partnerships
Verb + Noun Phrase
Nike also aggressively scaled back retail partnerships with Macy’s, Foot Locker, and Dick Sporting Goods. -
overrotated toward
Verb + Preposition
It does appear, according to analysts, that Nike overrotated toward the direct to consumer. -
significant headwind
Adjective + Noun Collocation
Any additional cost could be a significant headwind for the sportsear industry.
De-Chunking: Complete the Expressions
Select the correct phrase from the box below to complete the sentences.
under pressure
played a key role
scaled back retail partnerships
significant headwind
1. The brand on sells premiumbric athletic wear and is quickly on legacy competitors.
2. But AN is also as tariffs proposed by the White House threatened to raise prices.
3. Analysts say that timing in rapid rise during co lockdowns.
4. Nike also aggressively with Macy’s, Foot Locker, and Dick Sporting Goods.
5. Any additional cost could be a for the sportsear industry.
While-viewing Tasks
Complete these tasks while watching the video to enhance your comprehension and focus:
Guided Notes
Fill in the key information as you watch the video:
- On Running’s origin city:
- Year On Running went public:
- Percentage of On’s revenue from the US in 2024:
- Location where 90% of On’s products are manufactured:
- Time it takes to make one shoe with spray-on technology:
- Athlete who won Boston Marathon in On shoes:
- Typical price range for On running shoes:
- Nike’s global sports footwear market share:
- On’s global sports footwear market share (approx.):
Questions to Answer
- True/False: On Running’s initial running shoes were immediately embraced as high-performance products.
- Multiple Choice: Which factor did NOT significantly contribute to On’s early success?
a) Unique shoe design
b) Aggressive low-price strategy
c) Performance focus
d) Serendipitous market timing (COVID-19, Nike’s strategy)
Answer: - Short Answer: How did Nike’s “over-rotation” to direct-to-consumer sales benefit On Running?
Checklist: Key Events & Facts
Check off these points as you encounter them in the video:
- On Running’s sales growth in recent quarters.
- Discussion of On’s spray-on technology for shoe manufacturing.
- The “hollow pads” design feature of On shoes.
- Mention of celebrity endorsements (e.g., Roger Federer, Zendaya).
- Impact of potential US tariffs on On’s production in Asia.
- Nike’s market share compared to On’s.
- On’s plans for expanding into apparel.
Embedded Video:
Fill in the Blanks Exercise
1. On Running, a Swiss sneaker company, is quickly on legacy competitors.
2. Since going public in , On’s net sales have grown in 11 out of the past 13 quarters.
3. Nike has faced and Adidas ended its with Kanye West.
4. On is also under pressure from proposed by the White House.
5. In 2024, the US accounted for almost of On’s revenue.
6. Around of On’s products are manufactured in Vietnam and Indonesia.
7. Nike is undergoing a under its new CEO, Elliot Hill.
8. On’s new can make a pair of sneakers in just minutes.
9. One shoe is made in just with the new technology.
10. On shoes weren’t always taken seriously as products initially.
11. To elevate its brand image, On on performance.
12. Olympic medalist Helen Obiri won the Boston Marathon in On’s shoes.
13. On products are geared towards with typical shoes selling for $150 or more.
14. Nike’s decision to created an opportunity for On.
15. On’s market share has increased since 2019.
Vocabulary Quiz
Fact or Fiction Quiz
Extension Activities
Choose from these activities to extend your learning and explore the topics discussed in the video further:
Research & Report: On Running’s Marketing Strategy
Research specific marketing campaigns or partnership details of On Running (e.g., Roger Federer’s involvement, celebrity endorsements). Prepare a short report (200-300 words) summarizing their key marketing tactics and how they differ from Nike or Adidas.
Medium
Comparative Analysis: Shoe Technology
Investigate the unique shoe technologies of On Running (e.g., CloudTec, spray-on manufacturing) and compare them with a specific technology from Nike (e.g., Air Max, Flyknit) or Adidas (e.g., Boost, Primeknit). Write a brief comparison highlighting pros and cons.
Hard
Debate: Tariffs and Global Production
With a partner, debate the potential impact of tariffs on global supply chains for athletic wear companies like On Running. One partner argues for the benefits of domestic production, and the other for the challenges and costs.
Medium
Discussion: Brand Image vs. Performance
Discuss with a partner how On Running successfully shifted its brand perception from a “lifestyle shoe” to a “performance shoe.” What specific actions or strategies do you think were most effective?
Easy
Market Strategy Simulation
In a small group, imagine you are consultants for a new athletic shoe brand. Based on On Running’s success, develop a hypothetical market entry strategy focusing on product differentiation, target audience, and initial marketing tactics. Present your strategy to the class.
Hard
Industry Trend Analysis
As a group, research current trends in the athletic wear industry (e.g., sustainability, smart footwear, customization). Analyze how these trends might impact On Running’s future growth and competitive position.
Medium