Does On have what it takes in China?

On Holding AG has had a fruitful 2024, fueled in part by a star-studded partnership with Zendaya and a fifth sizzling collaboration with Loewe. The Cloudtilt Loewe II, for example, saw a 308% spike in searches this year, according to Lyst — a testament to the brand’s growing cultural clout and business success. The Swiss performance sportswear brand reported solid growth in its third-quarter results for 2024, with net sales reaching 635.8 million Swiss francs ($714.2 million), up 33.2% YoY on a constant currency basis. For the first nine months of 2024, the company’s total net sales totaled 1.7 billion Swiss francs ($1.9 billion), a 30.7% YoY rise. The Asia-Pacific market, including China, performed exceptionally well, with sales surging by 86.3% in constant currencies to 186.2 million Swiss francs ($209 million) for the period ending September 30, 2024. But it isn’t the Challengers actress or the Loewe association that has singlehandedly fueled its popularity in the Asia-Pacific region, and more specifically, mainland China, since its entry in 2018. Rather, it’s the company’s refreshing, high-tech yet affordable designs, such as the high-tech LightSpray spray-on marathon sneaker, that have contributed to its prominence in the global running movement. Founder of East Goes Global Andrew Spalter says, “China’s running market is unique due to its rapid growth, strong government support through government initiatives like ‘Healthy China 2030,’ and a vibrant marathon culture. It blends fitness with lifestyle as younger generations embrace running as both a sport and a form of self-expression.” The new-era powerhouse is not without competition, though. Chinese competitors Anta, Li-Ning, and Xtep have also benefited from the country’s growing interest in fitness. Anta’s revenue rose 13.8% to RMB 33.7 billion in the first half of 2024. Meanwhile, Li-Ning reported a turnover of RMB 14.35 billion, and Xtep achieved RMB 7.2 billion in revenue for the same period. Though these Chinese players have not reached the global revenue height of On, their presence dominates the local market. For context, #On (昂跑) has 30.8 million reads on Xiaohongshu, while #Anta (安踏) has more than 660 million. Despite On achieving global net sales of 1.08 billion Swiss francs (approximately 8.72 billion RMB) in H2, Anta remains more deeply engaged with Chinese consumers. Eyeing IRL opportunities On launched its Tmall store back in 2019. Building on increased local consumer loyalty, the company has made physical retail expansion a core focus, opening 10 new China stores in 2023 (out of a total of 15 new stores globally). From Spring 2023 to 2024, On opened a new store in China nearly every month, a pace more than 10 times faster than its first five years in the market. Between 2018 and 2022, the brand only launched 12 stores in China. "The brand has invested in offline retail experiences, which have become key to building deeper connections with Chinese audiences and fostering communities for new and seasoned runners,” explains Arnold Ma, CEO of China-focused digital marketing agency Qumin. He highlights the brand’s ability to connect with communities that its target consumers are already a part of, through initiatives like running clubs and shoe rental services. “Providing meaningful brand experiences in physical retail and encouraging the social and community aspect of exercise has helped elevate the Swiss brand in the eyes of local consumers,” Ma says. The crucial adoption of Xiaohongshu and WeChat marketing, along with organizing city walks, running groups, and tennis meet-ups, all produce a phygital opportunity that has fostered brand loyalty. “These activities resonate with China's socially driven young consumers seeking connection and shared purpose, aligning the brand well with their values,” Ma adds. China’s wellness movement Currently the world’s second-largest wellness market, China offers fertile ground for sportswear. Those capitalizing on specific sports through performance-driven technicality are bound to reap the benefits. “While cutting back on other expenses, Chinese consumers stand out as particularly willing to invest in their health and wellness, which includes paying a premium for high-quality athletic footwear,” says Ma. The agency founder highlights the growing cultural influence of marathons in China, describing them as the new “sport for the elite,” with the number of races skyrocketing from 22 in 2011 to 622 in 2023. “These events attract Chinese consumers with high incomes, education, and corporate roles for whom running and niche sports have become the latest craze,” he says. Along with younger consumers spending more on their health and well-being, the aforementioned “Healthy China 2030” government initiative is a key driver of sportswear growth in the region. President Xi Jinping has made health a central focus of China’s policy agenda, making it a key element in all governmental decision-making. “The ‘Healthy China 2030’ initiative aligns perfectly with On Running’s campaigns, emphasizing health as a lifestyle priority,” says East Goes Global’s Spalter. The nation’s heightened focus on the health of its citizens creates a perfect environment for On to thrive. In contrast, luxury brands face challenges from the government’s anti-wealth display policies. Partnerships Compared to other sportswear giants from the West, such as Hoka or Saucony, On takes a more selective approach to its collaboration strategy. As a newer sportswear brand founded in 2010 — in contrast to Nike (1964) or Adidas (1949) — On has managed to assert its brand identity without diluting it with a conveyor belt of collaborators. Since 2022, the ongoing tie-up with Loewe has allowed On to connect with the style set, a key factor in its popularity among younger generations and style-conscious consumers. The company's also further resonated with its East Asian consumer-base through fashion collaborations, launching collections with Tokyo's Beams, and South Korean menswear label Post Archive Faction this year. Over the past five editions of On x Loewe, China has been a standout fan of the releases. The very first WeChat livestream to promote the collaboration garnered 2.5 million views in its first 10 days, starring Chinese fashion influencers Fil Xiaobai (@Fil小白) and Cici Xiang. This deep understanding of national taste and marketing culture in China has allowed On to thrive, with an October 2024 event in Shanghai featuring Swiss tennis legend Roger Federer, an investor and partner of On, further exemplifying this. The event highlighted a partnership with the Yunnan Wild Elephants Tennis Club, which nurtures tennis players of tomorrow from ethnic minority groups in Southwest China’s Yunnan Province. In addition to local strategies, global partnerships with superstars such as FKA Twigs and Zendaya have nurtured the company’s connection to Gen Zers tuned into popular culture. Although Zendaya’s Challengers film did not air in China, the actress has a lot of Chinese fans; #Zendaya has over 80 million reads on the youth-dominated platform Xiaohongshu. Her popularity in China was also proven during the 2024 Met Gala, when the dedicated hashtag #ZendayatheGodofMetGala topped 29 million views on Weibo, ranking 15th on the platform’s “top searched” list at the time. On’s aggressive physical retail growth in China sets the stage for an exciting 2025. Moving forward, it will be interesting to see if the company expands its partnership strategy beyond influencer marketing and community-led events to include brand collaborations and ambassadors. Though still a young sportswear brand in comparison to its competitors, further connections with local talent in both sports and fashion will help the maverick capitalize on China’s lucrative wellness industry. At the same time, its global cultural influence — in comparison to domestic players such as Anta and Li-Ning — is undeniably strengthening its position in the market.

Does On have what it takes in China?

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Published December 13, 2024

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Does On have what it takes in China?