Luxe.CO Insights | What Did We Experience in the “On Labs” Walking Tour?

3月 06, 2024

Strolling through the streets of Zurich, Switzerland, it’s common to spot runners wearing On running shoes.

Zurich, the largest city in Switzerland and a hub for commerce and industry, is also a gathering place for the banking sector, making it one of the most important financial centers in Europe and the world. It is also home to the rapidly growing sports brand On’s global headquarters.

Not long ago, Luxe.CO visited Zurich, Switzerland, for an in-depth tour of the brand’s headquarters, known as the “On Labs,” spanning 17 floors.

On has been one of the fastest-growing sports brands globally in recent years: from its inception in 2010 to 2020, the company has seen exponential sales growth, with an annual compound growth rate (CAGR) of 85%.

Visiting a brand’s headquarters always provides a more authentic and direct understanding of its ethos and corporate culture, offering insights into the logic and roots behind its success.

Accompanied by Vesna Stimac, On’s Head of Sustainable Communication for the EMEA region, and her colleague Catalina Jade Keller, we embarked on a “walking tour” through the headquarters.

Why could we call it walking? The building’s floor labeling system inspired it. Entering from the ground floor cafe, we were greeted by signs dividing the floors into different zones: “Mountain, Lake, Forest, Earth.”

Vesna commented, “These are the landscapes we enjoy while hiking. Starting from the earth, through the forest, past the lake, and reaching the mountain peak.”

Along the way, we heard numerous stories about On, including how they conducted thorough market research before entering the China market and how Federer once unexpectedly walked into a meeting…

A Spacious Feel of “Over 100 Square Meters per Person”

On’s headquarters is located in a former industrial park in Zurich, which has been transformed into a creative district. The building was designed by Spillmann Echsle Architekten, Specific Generic, and On’s own creative team.

Entering the office area, the most striking visual impact comes from the spacious, well-lit environment with views of the Alps.

The building primarily uses concrete, glass, and oak, with rocks collected from the Alps scattered throughout, reflecting the brand’s origins in mountainous environments.

Everywhere we looked, there was a sense of spaciousness, with more than 100 square meters per person. Traditional dense workstations were nowhere to be seen, nor were groups of more than ten employees.

Vesna Stimac explained that the move to such a large new headquarters was partly due to previous relocations being challenging for the staff and partly due to the brand’s rapid growth and confidence in its future.

In the best scenic spot at the core of the office space, we found a massive circular void with a spiral staircase running through all 17 floors of the building. The staircase’s design is ingenious, varying on each floor to simulate the gradients encountered while hiking outdoors. Climbing from “Earth” to the “Mountain” peak, the path becomes narrower and steeper.

This is the hidden “hiking trail” within On’s headquarters!

Acting on Impulse Like a Child

At On’s headquarters, our most profound impression was of a sense of “ease.” Understanding the brand’s history, one finds an ease and proactive spirit akin to a child’s “act on impulse” mentality.

In 2010, On’s founder, Olivier Bernhard, started by cutting up segments of a garden high-pressure hose and gluing them to the soles of shoes. After more than 200 tests, he developed the prototype for what would become the brand’s famed CloudTec technology, featuring a hollowed-out sole that reduces both vertical and horizontal forces upon landing, enhancing cushioning. This design also established On’s unique aesthetic. From the very first pair of running shoes, On distinguished itself from any other major sports brand in terms of design style.

As a professional athlete, a three-time world champion, and a six-time Ironman champion, Olivier Bernhard had “seen countless shoes” but was not satisfied with the sports shoes available on the market. More importantly, he faced his feelings directly, unafraid to pursue a running experience that many major brands had not achieved.

In the display area for On prototype shoes (pictured below), these shoes are simply laid out, not enclosed in glass cases or placed out of reach, making them seem all the more raw and rudimentary, hastily put together.

It was these imperfect prototypes that allowed the founder to find the “light touch and powerful rebound” sensation that runners dream of.

The “Maker Space” is equipped with everything a designer could need, allowing them to grasp the moment of inspiration, pick up a tool, and get to work. Here, designers can quickly “tinker” with, or even “cobble together,” a prototype shoe.

Learning Up Close, with an Open Mind

Since its IPO on the New York Stock Exchange in September 2021, On’s market value has surpassed ten billion dollars on three occasions. According to Foot Locker, the largest sports retailer in the US, On is one of its best-performing brands in the running category.

From the beginning, the Switzerland-based On set its sights on the global market.

When founding the brand, Olivier Bernhard first brought on his agent from his professional athletic career, Caspar Coppetti, who then introduced David Allemann, a former CMO at the furniture brand Vitra and a strategic consultant at McKinsey. The three co-founded the company (which is why we see many Vitra brand furnishings throughout the headquarters).

Vesna candidly admitted that although one of the brand’s founders was a professional athlete, the trio did not have a deep understanding of the sports brand industry. This significant “shortcoming” became a reason for their success, as their lack of knowledge led them to learn about and respect each market more humbly.

On expanded into international markets rapidly. Entering Germany in 2011, the US in 2013, and China and Brazil in 2018. Notably, while other regions primarily used a wholesale distribution model, On adopted a direct-to-consumer approach in the complex China market.

Many brands entering the Chinese market for the first time choose to work through a distributor familiar with the market. However, from day one of deciding to enter China, On’s founding team personally took to the front lines to learn.

Vesna recalled that upon arriving in China, the founding team learned about the market by attending professional trade shows, conducting thorough research and learning on-site, and seeking advice from industry professionals without hesitation.

To this day, they are extremely grateful for the friends they met in China, who offered valuable advice sincerely and selflessly. “If it wasn’t for the strategies developed based on in-depth learning and interaction, we might have failed miserably,” Vesna told Luxe.CO.

As of July 2023, On has established over 9,000 sales points through distributors in more than 60 countries worldwide and has opened 19 flagship stores globally since 2020—15 of which are in mainland China.

Vitra furniture seen throughout the headquarters

Tennis Legend Roger Federer, Silently Appearing in the Office

In China, many people first learned about On because of  Roger Federer. In July 2019, the Swiss tennis legend joined the understated local startup brand as an investor and partner.

In 2020, On officially launched its first special collaboration series with Federer—THE ROGER, with the debut shoe model, THE ROGER Centre Court 0-Series, limited to 1,000 pairs worldwide, each with a unique number.

In July 2021, On released THE ROGER Pro, the brand’s first professional tennis shoe co-created with Federer. Based on a 3D scan of Federer’s foot and custom-made for him, the shoe underwent two years of development and testing, with adjustments made according to his playing style and performance experience. Federer wore these shoes at the 2021 Qatar Open in Doha.

During our visit, Vesna told us that Federer silently appears in the office every month, actively participating in the team’s product discussions. Sometimes, while a meeting is in progress, he would just walk in, surprising and delighting everyone.

Inside this office’s secret door is a small library, where we saw a plaster mold of Federer’s foot! Did you find the other model of his foot in the pictures of this article?

At the end of our headquarters visit, we moved from “Mountain” back to “Earth,” passing facilities equipped for employees, such as a gym, sports equipment, laundry, showers, lockers, and arrived at the ground floor—On’s flagship store.

This store features all product categories of the brand and is equipped with high-tech evaluation tools. For example, in-store cameras can scan running posture and speed, generating and predicting a runner’s profile to guide product purchases; a camera captures and creates a three-dimensional scan of the foot in five seconds, accurate to five millimeters.

Upon departure, the brand conveyed through Luxe.CO: “We warmly welcome friends from China to visit our flagship store at the Swiss headquarters and experience the limitless charm of sports at On’s birthplace.”

“Becoming the World’s Most Premium Sports Brand”

At an investor day event, the brand announced its main financial targets for the next three years up to the 2026 fiscal year, such as:

  • Doubling net sales from 2023 to 2026, reaching at least 3.55 billion Swiss francs;
  • Achieving an annual growth rate of 20% to 50% in net sales after 2026, with an adjusted EBITDA profit margin exceeding 20%;
  • Surpassing a gross margin of 60% by 2026;
  • Increasing the net sales contribution from the Chinese market, the apparel category, and owned retail channels to at least 10% each.

On’s annual sales growth chart

Moreover, On disclosed the three strategic pillars for the company’s next growth phase:

  • Elevate: Further increasing the brand’s share in the running market, its visibility in communities, the credibility of product performance, and its impact in the sustainability field.
  • Expand: Expanding the footprint in the Chinese market, extending high-quality multi-channel distribution, and expanding its retail network.
  • Establish: Building training communities in specific adjacent markets the brand plans to enter, especially in tennis, and establishing a complete product line from head to toe in all vertical fields.

Currently, On not only focuses on tennis shoes but has also introduced racing shoes, trail running

shoes, casual sneakers, indoor running shoes, and hiking boots over its decade-long brand journey.

In terms of product categories, On ventured into the apparel market in 2016, launched underwear in 2022, and introduced children’s shoes in 2023.

In collaborations and cross-brand ventures, On has worked with the Danish luxury audio lifestyle brand Bang & Olufsen, the New York streetwear brand Kith, and especially the Spanish luxury brand Loewe, continuously launching new products.

On X Loewe collaboration products

For more brand research, feel free to click the image above to download the Luxe.CO Intelligence report.

 | Image Credit: On-Site photography by Luxe.CO


 | Editor: Maier