“Archaeopteryx jacket, Lululemon yoga pants, Ralph Lauren Baseball Cap” is considered a middle-class accessory. Today, brands such as “Salomon, Hoka One One and On Running” are the new middle-class male harvesters.
Their emergence has changed the way Nike and Adidas have dominated the global sportswear industry for years. Last year they accounted for 35 per cent and 16 per cent of the $146bn in net sales generated by the top 15 sportswear brands, according to a Morgan Stanley Report. But that is down from 63% in 2018.
Among them, Ongo has been hailed as a potential new lululemon star. Founded in Switzerland in 2010 by triathlon world champion Olivier Bernhard, running enthusiasts David Allemann and Caspar Coppetti, Ongo is a brand of running shoes. With its mid-to-high-end brand positioning and celebrity marketing, Ongo quickly became synonymous with middle-class meritocracy, achieving a $1 billion revenue milestone with Lululemon in just a decade.
But from the market share point of view, the n market is the main battleground, in recent years the asia-pacific region gradually rising momentum, and China market performance is very prominent. In this year’s Tmall Double 11, October 21, the official opening night, high-speed running turnover increased 66.8% year-on-year, let us once again see the explosive power of outdoor sports upstart. So how did high-speed running become the new love of the middle class? How Do Salomon, Hoka One and others capture the market? What are the traffic passwords behind the crazy sales growth?
1
Running shoes made by professional athletes,
how exactly do you take a man’s shoe cabinet?
This is the story of a professional athlete who makes shoes.
Prior to the founding of running high, Olivier Bernhard was a professional triathlete with a high profile in Switzerland. Instead of coaching, he decided to start his own business and get into running shoes. That’s because, as an athlete, he found it difficult to find a pair of sneakers that would ease the pain of his inflamed Achilles tendon, even if he had received sponsorship from a number of brands. So he brought in two running enthusiasts, David Allemann and Caspar Coppetti, to set up On Aung in Zurich.
Do a pair of running shoes threshold is not low, the first competition is the technical strength. Technological innovation behind a pair of shoes can affect the tone of a sports brand. According to the structure of the running shoes, the part next to the sole is the insole, the bottom of the insole is the midsole, the bottom of the midsole is the outsole touching the ground. Visible, the midsole should be a pair of running shoes the most important, the most science and technology content of the part, determines the lightness of the shoe material, resilience and durability.
When designing the shoes, the startup team did a lot of research and found that all the shoes on the market looked like“Wide-body sports cars.”. They have also struggled with shock absorption and comfort at the expense of a certain speed v s speed but reduced foot comfort. In the end, Bernhard decided, from the point of view of a professional athlete, that the shoe should be light and comfortable, with the emphasis on shock absorption.
Its first product, the cloudtec, quickly gained a reputation among sports enthusiasts for its innovative midsole design and superior cushioning. Cloudtec is also the best example of the strength and uniqueness of high-speed running technology. The design was inspired by Bernhard’s accidental discovery while watering the garden that if you cut the rubber hose in sections and stick it to the sole of your shoe, it would both absorb the shock and provide power when your foot is off the ground.
Based on the design inspiration, high-running shoes have this row of special holes in the bottom of the design, has become the shoe’s most iconic symbol. In addition, the core of upstart CloudTec’s technology is the innovation of running shoes’ traditional integrated midsole into multiple independent Cloud modules, each of which can effectively respond to multi-directional pressures and give back energy. These modules act like tiny smart sensors, giving the shoe the ability to dynamically adjust to a runner’s individual gait for a high degree of flexibility and adaptability. Independent studies have confirmed that cloudtec’s patented ETH Zurich technology reduces heart rate and blood lactate levels in athletes.
As a result, the brand won the ISPO Global Innovation Awards with its groundbreaking cloudtec patent sole technology just over a month after its launch. The award helped the company take off even before it went on sale, with 2,000 pairs of shoes ordered from 19 countries and regions. The company’s cloudtec running shoes sold 10,000 pairs in their first year on sale and were described by the wall street journal as“Revolutionary”.
After the first shot was fired, high-speed racing has gone on to create several innovative patented technologies: CloudTec’s cushioning technology; Speedboard, which converts impact into explosive force; Cloud model with zero-gravity outsole; multi-functional and ultra-lightweight running apparel in advanced fabrics; and optimized carbon-injected Speedboard to power professional and professional athletes.
High-speed running not only in the midsole technology“Roll”, “Upper spray weaving” is also constantly technological innovation. The LIGHTSPRAYTM uppers, which use a robotic arm to spray fibers directly onto the last, take just three minutes to make a pair of shoes and weigh just 30g, or 5g less than a small egg.
Lightspray TM upper jet weaving technology
The thin, seamless, laceless design of the upper allows the runner’s foot to fit better on the slope, while reducing distractions and allowing him to focus more intently on his sport. Currently, Cloudboom Strike LS is the first high-performance racing shoe On Onn running using LIGHTSPRAYTM technology. It is understood that many athletes closely involved in the design and testing of LIGHTSPRAYTM technology and Cloudboom Strike LS racing shoes. Hailun Obiri, a four-time World Figure Skating Championships, Boston Marathon and New York Marathon Women’s champion, successfully defended her Boston Marathon title wearing a test version of Cloudboom Strike LS.
For the design aesthetics of Ongo, bernhard concluded in an interview: “We don’t prioritize appearance over function, and aesthetics can change over time. The aesthetic of On is to strip away useless structures and present design as technology.”
As a result, Ongo in Nike, Adidas and other companies under pressure, become a rising star of the running shoe track, income is all the way running. Since its inception in 2010, it has grown at a compound annual rate of nearly 80 percent, and its 2023 revenue has broken through the 10-billion-yuan mark. It is now worth more than $18 billion (over 100 billion yuan) .
2
Enter the Red Sea Market brand
How do you tell a good story?
But the upstart story doesn’t rely solely on an innovative sole and flimsy upper. Bilanz magazine concluded: high-tech running shoes have limited advantages, and storytelling is its greatest advantage.
How do new entrants tell the story of a new brand at a time of intense competition? This may also be a lot of entrepreneurs more concerned about the topic.
For a new brand, the key to breaking down the barriers established by industry giants over the years is how to stimulate the spending habits of the core population. From its inception, Ongo chose to be a high-priced brand serving high net worth customers and the middle class.
For the middle class to be willing to pay, the product itself should have a comprehensive and professional comfort experience, as well as a symbolic design features and brand positioning. The low-key and recognisable nature of high-speed running is well-suited to the subtle mindset of the middle class who want to be low-key but different. At this point, if the product is linked to a popular movement, it may be easier to spread in the community, as a new consumer trend.
High-speed running adopts the method of association with professional athletes and Olympic athletes, which can add original sports genes and stories to the brand’s sportsmanship. Running can break through the circle of communication, not without the legendary tennis star Feidler. In 2019, Feidler joined High Street as a shareholder and spokesperson, bringing the running shoe brand into the eyes of the middle class and further strengthening the high-end sports brand image.
Feidler on run, Shanghai meet and greet
The Giant Stone Johnson, who was originally the spokesperson of Undermar, wore onc running shoes at the Super Bowl opening ceremony and brought running water to the brand, which directly crashed Onc running’s official website. It has also sponsored Nicholas of Cusa Spirigg, who won a silver medal in the 2016 triathlon, Tim Tang, who broke the world record in 2017, and London runner-up Václav Havel Gomez.
With the celebrity effect, the average price of more than 1,000 yuan high-priced running shoes quickly opened the high-end market.
But the clever thing about Ongo is that it comes with a timely community marketing campaign, allowing the“Movement” to become a link between the brand and the consumer. Running“Squad Races”, “Run Your Local Mountain”, there are also some themed running activities, such as exploring the old city, exchanging old things, city music CityWalk, and appreciating the old historic buildings at night, which are designed according to the local culture.
Ongo’s advertising format is mostly product evaluation, focusing on CloudTec, the same stars, new technology brand image. In this way, high-speed running will spread users from professional sports to the sports-loving and active and healthy lifestyle of the general public, but also in the minds of consumers planted a professional brand image.
But with Ardy Wiranata and Nike firmly entrenched in the professional sports market, how will high-speed running keep consumers voting with their feet? High-speed running does not use any novel method of play, but in the way the sale of the“Distribution + DTC model.”.
At first, high-speed running mainly through the wholesale form of selling shoes, in 2018 is also through the model of dealers to enter the Chinese market. In recent years, high-speed running attaches great importance to direct DTC channel construction, build their own online e-commerce or online self-operated stores, making full use of the important channels of product experience and delivery, so as to convey the core concept of high-speed running. Currently, company-owned channels include e-commerce platforms, Chinese Taobao and JD.com platforms, as well as flagship stores in New York and direct-operated stores in China.
In the meantime, high-speed has not completely abandoned its distribution model. Based On the importance of DTC Innovation, On Ang Run takes advantage of the platform’s geographical position through the store-in-store distribution cooperation model and realizes brand self-operation to better optimize the user experience, achieve more effective and in-depth distribution.
The turn of the DTC channel was not as“Aggressive” as Nike’s, so when Nike paid the price for pushing too hard and started looking again for the optimal solution to the DTC and wholesale model, the relatively conservative channel strategy of high-speed running is more risk-resistant.
Net profit fell 48 per cent to SFR30.5 m in the third quarter, driven by higher costs and exchange rates. But its sales and gross margins were impressive — its net sales rose 32.3 percent to 636 million Swiss francs in the third quarter from a year earlier, it had the best quarterly revenue performance in On Ang’s history; its gross margin was 60.6% , the highest since the company went public, it also outperformed Nike (44.8%) and Adidas (51.3%) in gross margin performance in the third quarter. For the gross margin increase, the growth of high-speed running is mainly due to the DTC (direct-to-consumer) channel growth and the promotion of full-price sales strategy.
To sum up, Ongo’s screenplay is always full of technical innovation, celebrity, community communication, DTC channels, and many other elements. It may not seem like much of a novelty, but he is able to weave each of these elements together, create a very adventurous fashion brand image, and accurately capture a number of sports lovers and high-quality of life requirements of the consumer group. But running to keep them buying is the essence of the business story.
3
How many pairs of shoes can a boy’s shoe cabinet hold?
A girl’s wardrobe is always less than a piece of clothing, and a boy’s shoe wardrobe is always missing a pair of shoes.
Prior to high-speed running, the all birds of Silicon Valley made men willing to pay. The us-based sneaker brand, nicknamed“North American foot strength” by Chinese netizens, was founded in 2016 by former New Zealand international Tim Brown and renewable materials expert Joey Zwilinger.
When it was founded, the company’s Wool Runner became an internet sensation for comfort, lightness and eco-friendliness, beloved by the American Elite and Tech moguls, former President Obama, Google co-founder Larry Page, Apple CEO Tim Cook and Alibaba founder Jack Ma have all worn Allbirds. The New York Times has also described the ownership of a pair of Allbirds wool running shoes as a sign of integration into Silicon Valley’s elite. As a result, Allbirds is a well-deserved tech bro starter pack.
Allbirds followed suit, landing on NASDAQ in 2021 with a market capitalisation of $4.135 bn the day it went public. But before the Allbirds could get a foothold, the story took a turn.
Allbirds’ eco-friendly, carbon-neutral approach has made Silicon Valley’s male entrepreneurs the core users of its seed, reaching out to more elite consumers. After the company went public, in order to expand the customer base, opened up the clothing category, including underwear products and some accessories, but also began to make children’s shoes to attract young groups and female users. As a result, Allbirds lost its uniqueness and focus on its core users.
At the same time, the DTC model on which Allbirds relies has become a stumbling block to its revenue growth. Indeed, Lululemon’s DTC strategy, which strengthens direct contact with consumers, has created quite a myth in the sportswear world. A few years ago, many clothing brand transformation DTC set off a great storm, Warby Parker, Torrid, Adidas, Under Armour, Timberland and other brands have taken DTC development strategy as the top priority. Allbirds sees the DTC model as a digital-driven vertical retail strategy that combines the company’s digital channels with its retail stores to provide timely feedback on consumer demand.
In fact, the DTC strategy seems to eliminate the traditional channel distribution and distributors, but increased the initial investment and operating costs, while also reducing the market to reach the port. Allbirds uses the DTC as the only channel that can be quickly overtaken by competitors without the aid of a distribution model. Allbirds is down nearly 98% from its 2021 peak and the exclusive rights to China are being sold to Belle.
Just wonder if the Allbirds story will play out at another Hoka . Hoka grew up in a similar way to this new breed of sneaker — the long-distance mobilizer Nico Mermoud teamed up with Jean-luc Diard (Luc Diard) , who has some business experience, to form the founding team, with the unique super-thick midsole technology to create product differentiation, and then sponsored marathons, mountain running and other professional events, by many athletes recognized, and eventually from the minority running shoes out of the circle.
To be honest, running shoes like Hoka aren’t cheap and are generally priced for high-end running shoes. For example, for urban road running, prices range from 899 yuan to 1,399 yuan under different cushioning and speed options; for outdoor cross-country series, prices range from 1,499 yuan to 1,899 yuan depending on the terrain’s difficulty and speed.
High-priced running shoes to get the middle class to pay, Hoka also need to work on marketing. By the Decker (UGG parent company) group, Hoka Marketing More Open, more active in a variety of sports, continue to expand the community, build brand image. When Hoka entered China in 2017, it also chose to work with professional athletes to build a high-performance product image in the lap. Later, the Hoka confirmed that Li is now the first brand spokesman, the realization of a circle-breaking communication. This is also a new batch of consumer brands and Nike, Adidas and other companies before the difference, they do not use top-down marketing, but targeted consumer groups, social marketing.
At present, the global sports consumer market is relatively conservative, Hoka and ON high running side by side to become the momentum of the two major sports brands. Sales at Hoka jumped 34.7 per cent to $570m, with cumulative revenues topping $2bn for the first time in the past year, making it the main contributor to parent Decker’s revenues.
Targeted Targeting + social marketing communications have also brought the global outdoor brand, founded at Salomon, into the shoe cabinets of middle-class men and young consumers. In recent years, outdoor hiking, camping fever, Salomon and other relatively small outdoor sports brands into the public eye. On social platforms, Salomon takes hundreds of thousands of notes, and “What Salomon is wearing” posts are popular.
With the price of about 1,000 Yuan Salomon, Yamafen sports also has a bright performance. Outdoor Sports Equipment Company, Yamafen Sports, has reported 2024 third-quarter results, 2024 revenue of $1.354 billion, up 17% year-on-year Net profit rose 257 per cent year-on-year to $56m. Another great outdoor accessory, Archaeopteryx, is to blame, but Salomon’s contribution is growing too: in the first three quarters of the 2024, Salomon’s outdoorsy revenue was $1.241 billion, up 8% from a year earlier, revenue was 35 per cent.
Yamafin sports, “We are doing our best to capture the growth opportunities of Archaeopteryx and Salomon footwear,” said the company. Salomon footwear is also showing strong growth in greater China and the asia-pacific region, with a new category of ‘cross-country running shoes’ being pioneered in China and welcomed by young consumers.”
In the context of a consumer downgrade, the logic of brands ranging from high-end runners and Allbirds to Hoka and Salomon has always been similar, but through their own technical advantages have been a group of minority, professional sports fans of the favor, with the marketing after breaking the circle, they appeal to middle-class consumers and trendy young consumers with their practical and social values. But the trend may be just a gust of wind, hitting the current consumer psychology, want to cross the cycle of the brand, but also to compete research and development design, marketing, channels and other comprehensive capabilities, after all, a man’s shoe cabinet may not hold too many trendy shoes.