Swiss sportswear brand On Holding has grown from a niche running shoe upstart 16 years ago into the fastest-growing company in the space. It has no intention of resting easy now.
The Zurich-based company, currently about 10% the size of industry Goliath Nike, has big ambitions to fuel new growth, pushing beyond its roots into apparel and retail, leaning into new tech, landing major new influencer partnerships, and implementing artificial-intelligence-driven personalization that could upend customer interaction.
But On’s next chapter may depend on whether it can preserve its innovation-driven culture while becoming a global powerhouse. And that balancing act will come as the company also navigates a major leadership transition: Former CEO Martin Hoffmann officially stepped down May 1, while co-founders David Allemann and Caspar Coppetti stepped up as co-CEOs in a shift toward a more founder-led structure.
“It’s a lot of intensity,” Hoffmann said of On’s culture at a recent investor conference in New York before the leadership change was announced. “We like chaos, and so you need to appreciate that, and you need to thrive in that.”
After all, not many would have bet on On’s rise at the start.
‘No One Was Waiting for Another Sportswear Company’
According to the man who led the company through its IPO and a major international expansion, On’s success is only partially the result of offering great products.
It hasn’t hurt that top athletes like tennis legend Roger Federer and marathoner Hellen Obiri have embraced its wares. But Hoffmann said the company’s journey to a 2025 valuation of about $3.8 billion is the direct result of a culture relentlessly centered on innovation, design and premium positioning.
“When we started 15 years ago, certainly no one was waiting for another sportswear company,” he said. “But the world was ready for a challenger brand that just rethinks how that industry works.”
The rethinking continues to this day, thanks to an ethos made up of equal parts performance engineering and brand aspiration, along with a dash of swagger. On was founded with the sole objective of becoming “the most premium brand in the sportswear industry,” Hoffmann said, adding that for a Swiss-born company, there was never another alternative.
“If you are building a brand from Switzerland, you’re either building a premium brand or luxury brand,” he said. “Switzerland cannot build mass-market brands.”
From the very beginning, that has meant operating differently than rival brands and turning apparent disadvantages into competitive edges. On has steered away from aggressive discounting and mass distribution despite a crowded market increasingly blurred by the convergence of sportswear and fashion.
To the contrary, it has leaned into strategies most commonly associated with luxury brands – scarcity, design integrity and controlled growth. And core to its success, past and future, Hoffmann said, is product innovation.
“Our industry is unbelievably old-fashioned,” he said. “There was very little innovation that has happened in our industry for many, many years.”
‘A Manufacturing Revolution’
On has made it a mission to change that perception, first making its technological mark with the CloudTec cushioning system, hollow pod-like structures on the outsole of its shoes that became an instant hit among both runners and fashion-conscious consumers.
Its newest and most ambitious recent innovation is LightSpray, a technology Hoffmann described as both a “manufacturing revolution” and a “performance revolution.”
The process simplifies footwear production by robotically spraying a filament around a mold to create a shoe’s upper. Whereas traditional athletic shoes might pass through roughly 125 human hands during production, LightSpray technology gets the job done in just three minutes.
“So we are [now] producing shoes in Switzerland, one of the most expensive countries in the world,” Hoffmann said, adding that the ability to fabricate shoes domestically in On’s backyard is a notable development in an industry built around low-cost manufacturing hubs overseas.
The technology also addresses the sustainability concerns now shaping the apparel and footwear sectors, he said. LightSpray reduces carbon emissions by approximately 75% over traditional production methods and is easier to recycle because it uses a single-material construction.
The shoes gained major visibility during the Paris Olympics, where On-sponsored athletes competed wearing prototype versions. Obiri wore a pair late last year when she won her second New York City Marathon.
The company plans broader commercialization of the technology this year, but it is already pushing forward on other breakthroughs that could help On sidestep some of the pitfalls that have challenged larger competitors as they scaled.
AI is at the top of that list.
Hoffmann suggested its biggest impact would be in personalization and inventory management rather than pure cost-cutting. With approximately 40% of On’s sales already flowing through e-commerce, the company is keeping a sharp eye on how AI-driven search and shopping behavior might reshape consumer engagement.
“In the future, I can send a different newsletter to each and every one of you,” he said. “The question is, are you still coming to the website? Or are you asking your agent to search around and find the product?”
At the same time, AI could also help On avoid excess inventory, which he called “the worst thing that a premium brand can have” because it leads to discounting.
It’s a concern that highlights one of the most obvious ways On is attempting to differentiate itself from industry giants like Nike. Rather than compete directly for the middle market, it’s pursuing narrower territory centered on premium positioning, controlled distribution and brand heat.
“On has not been successful because Nike wasn’t,” Hoffmannn said. “We became successful because we have grown the overall market.”
‘Audacious dreams’
Yet innovation alone is not enough, Hoffmann said. Execution discipline also matters.
“One of the core non-negotiables in the culture of On is innovation and excellence,” he said. “Those audacious dreams only come to life when you have discipline.”
That discipline shows up in hiring: Prospective employees often go through seven or eight interviews, with heavy emphasis on cultural fit. The company now employs roughly 4,000 people globally and reviewed about 200,000 applications last year.
On’s culture-first philosophy extends to its athlete and celebrity partnerships. Hoffmann said these linkages are an increasingly important component of its growth strategy, underscoring the credibility of its products to very different markets.
The company positions its collaborators as active participants in product creation and brand development rather than mimicking the transactional sponsorship route of its competitors. Federer, for one, is both an investor and partner in the company, working closely with product teams on the Roger footwear line. Actress Zendaya and musician Burna Boy are extending the brand’s cultural reach to fashion and lifestyle audiences with multiyear brand partnerships.
“You need athletes to validate this,” Hoffmann said. “People don’t believe you if you simply say it’s a great running shoe … And when you think more about lifestyle, of course, you can say, ‘This is a good-looking shoe,’ ‘This is a cool shoe.’ But the authenticity comes from who is wearing that, who is showing up in public.”
The combination of performance legitimacy and cultural cachet will be key to helping On expand beyond core running into broader lifestyle markets without abandoning its performance-first identity, Hoffmann said. And it’s just one of several pillars underpinning its long-term expansion plans.
On is aggressively eyeing geographic expansion. Although it operates in roughly 60 countries, it still believes awareness remains relatively low. About 75% of consumers in On’s current markets are unfamiliar with the brand, Hoffmann said.
Retail expansion presents another major opportunity. On did not operate its own stores until 2020, though it now has roughly 60 global locations, serving as both sales channels and curated brand showcases to reinforce the company’s premium positioning.
But On’s most significant long-term opening could lie in apparel. While footwear still dominates the revenue mix, apparel is a fast-growing segment, already operating as something of “a company within the company,” Hoffmann said.
Apparel now makes up only 8% of On’s revenue, and Hoffmann acknowledged that the company will have to build entirely different sourcing, merchandising and design capabilities to grow market share. Yet the upside could be significant.
“I mean, [Lululemon] is a $10 billion apparel company, so it’s a lot of opportunity,” he said.
Still, there could be challenges ahead. With its founders back in operational control and the man who grew On into a multibillion-dollar enterprise stepping aside, the company is entering a new phase. It is facing scrutiny on whether its signature culture of innovation can continue scaling without losing authenticity, and some analysts have questioned how it will combat intensifying competition and a consumer base growing more selective amid a shakier economy.
The company’s share price dropped 11% the day it announced Hoffmann’s departure, though it has since bounced back and then some. On beat Wall Street expectations in its latest quarter, posting revenue growth of 16.4% even as Nike showed signs of struggle, especially in the Chinese market.
Hoffman predicted as much on his way out the door, explaining that On’s premium positioning would insulate it from the discount-driven cycles that pressure mass-market brands. He was similarly bullish that On’s way forward was expanding the market, not stealing share from others.
“We are not winning if we are trying to play a zero-sum game,” Hoffmann said. “Our focus needs to be to become a bigger part of our customers’ lives.”
