On Holding, Hoka Gain Ground as Nike, Adidas Struggle in Market Shift

Upstart footwear brands like On Holding and Hoka are gaining traction among retailers worldwide, presenting stiff competition to industry giants Nike and Adidas. Their eye-catching styles and focus on premium running shoes have made them a hit with sneaker enthusiasts.

The Rise of Innovative Brands

In the wake of the pandemic-induced comfort dressing trend, these newer brands have successfully attracted customers with their innovative running and performance shoe offerings.

Backed by tennis legend Roger Federer, On Holding and Decker Outdoors' Hoka are capitalizing on the momentum, while industry giants Nike and Adidas are seeing a decline in their market share. Wholesalers like Dick's Sporting Goods and Foot Locker are cutting back on orders, further affecting market dynamics.

Nike, Adidas Falling Behind on Innovation

According to Morningstar Research analyst David Swartz, "Nike and Adidas have perhaps fallen behind on innovation compared to some others, who have seemingly found market niches to exploit and have put out products that seem to be really catching on with consumers." This shift in consumer preference has paved the way for brands like On Running to make significant gains in market share.

On Running and Hoka's Market Share Success

Reuters reported that On Running's market share in the footwear category at Dick's Sporting has surged from 0.8% to 6.1% since the beginning of the year, while Hoka has experienced a rise from 4.2% to 8.7% for the same period. In contrast, Nike and Adidas have witnessed a steady decline, as indicated by YipitData, a platform that collates market share data using email receipts and transactions, as per Owler.

Telsey Advisory Group analyst Cristina Fernandez believes that brands like Hoka and On Holding bring a fresh aesthetic to the market and cater to everyday runners. Consumers in the United States are increasingly willing to explore alternative options, driven by a desire for newness and an alternative to the more established players.

On Holding's Cloudflow 4 and Hoka's Clifton 9 have become popular choices among runners and joggers, who use them for exercise and everyday activities. These brands prioritize full-price selling, avoiding major discounting to protect their long-term brand value and sustainability.

On Holding's Co-CEO and CFO Martin Hoffmann stated, "We see growth across the board, in our own retail stores, with our wholesale partners, and our e-commerce." The running category, in particular, has shown robust demand for products launched within the past 12 to 18 months.

Photo: On Running Pressroom