Behind the completion of On Running Shenzhen Flagship Store lies the new running shoe company's "full-category" ambitions

On Running’s strategic expansion in China is accelerating.

Recently, On Running’s largest flagship store in China opened in Shenzhen MixC World, covering an area of 802 square meters.

Compared to less than a year ago when the first store opened in Chengdu, this Shenzhen flagship is nearly double in size and significantly emphasizes apparel and accessories display.

This change reflects the evolution of the brand’s development stage.

In fiscal year 2025, On Running’s global revenue will surpass 3 billion Swiss francs, entering a new scale. Meanwhile, discussions about apparel at earnings calls have also increased noticeably.

At the opening, Britt Olsen, Chief Commercial Officer of On Running, stated that the importance of apparel in the brand’s global business continues to grow, and China is at the forefront of this trend. DTC models and offline retail stores will become core growth engines for transformation.

She revealed that the proportion of apparel sales in direct-operated stores is expected to reach 25% to 30%, significantly higher than other channels.

Against this backdrop, the Shenzhen flagship embodies the brand’s transitional phase.

As store footprint expands and product categories diversify, On Running hopes consumers will perceive it not just as a running shoe brand, but as a comprehensive sports brand covering footwear, apparel, and lifestyle.

With the extension of product lines, On Running inevitably enters a larger competitive arena.

“China First”

In On Running’s global business map, China has become the fastest-growing and most dynamic strategic market.

In fiscal year 2025, On Running’s net sales in Asia-Pacific will grow by 96.4% year-over-year, contributing about 17% of global revenue, with China being the core growth engine.

“China is currently On Running’s fastest-growing market worldwide, and we expect this momentum to continue in the coming years,” said Britt Olsen. She noted that Chinese consumers often lead in brand awareness and consumption trends compared to other markets.

This leadership largely stems from structural differences in China’s sports consumption ecosystem compared to Europe and America.

First, the popularity of sports culture is accelerating. Outdoor activities like running, camping, and hiking have experienced concentrated surges in China, compressing the time window for brand education and category expansion.

Second, the market size is already substantial, but the competitive landscape among high-end sports brands is not yet fully consolidated.

In the intersection of professional sports and lifestyle, consumer perceptions are still forming, providing space for new brands to establish positioning through product innovation and retail experience.

In this environment, China is gradually taking on a role in On’s global system that differs from other regions.

This is reflected in On’s more aggressive retail expansion strategy in China.

According to Rebecca Cai, General Manager of On Asia-Pacific, the current store network mainly focuses on first-tier cities, covering key markets like Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Nanjing, with about 30 cities nationwide. By the end of 2026, On’s total stores in China are expected to reach around 100, including both direct-operated and partner stores.

She said that direct stores and distributors form a complementary approach in China. Flagship and key retail stores are usually operated directly, while distributors help accelerate entry into more cities and handle community operations and brand promotion.

“For example, in Shenyang and Ningbo, our partners play a very important role in building communities and promoting the brand,” Rebecca explained.

Compared to other global markets, the weight of the direct sales model in China’s strategy is significantly higher.

Previously, the company disclosed that out of 20-25 new direct stores planned globally each year, about half will be in China.

This higher proportion of direct investment makes China not only the fastest-growing sales region but also a priority market for testing new store formats and retail models.

Alex Griffin, Chief Marketing Officer of On, pointed out that while the brand maintains a unified global core, different markets are at different development stages.

“In China, consumers have been more inclined from the start to see On as a full-body sports brand, not just a shoe brand. So, we’ve tried many new things here,” said Alex.

He mentioned that internally, this strategy is even summarized as “China First”—delivering the best version of On in China first, then sharing the experience with other markets.

A typical example is the Run Base store in Shanghai West Bund, opened in 2024. As the only store globally where nearly 70% of space is dedicated to activities, experiences, and relaxation, it serves as an important testbed for community operations and spatial expression.

The Shenzhen flagship continues this approach.

Its larger size, more complete product categories, and space design emphasizing experience and community functions continue to position China as a key testing ground for On’s new retail formats.

Full-category ambitions

If only looking at revenue structure, On remains a typical running shoe-driven company.

In fiscal year 2025, footwear still accounts for the majority of sales, while apparel remains a small single-digit percentage, around 5.6%.

However, in terms of growth rate, apparel is one of the fastest-expanding segments within the brand. In Q4 2025, apparel revenue increased nearly 40% year-over-year, significantly outpacing footwear.

For On, advancing into full categories is almost a necessary step toward larger scale.

Compared to shoes, apparel offers higher purchase frequency, shorter development cycles, and stronger repurchase attributes, while also increasing average order value and basket size. As direct sales channels continue to grow, apparel growth will directly improve overall profitability.

But transforming from a running shoe brand to a full sports brand involves more than just increasing SKUs.

The first challenge is maintaining the brand’s technical credibility.

On initially built a clear technical image with its distinctive sole structure, CloudTec®, which became the most recognizable symbol and helped establish a strong professional label quickly.

But as product lines extend into hoodies, jackets, and accessories, how to sustain this technical “professionalism” remains a key question.

Consumers used to recognize On at a glance by its soles, but in apparel, this kind of intuitive technical advantage is harder to replicate.

Alex Griffin said that On’s restrained and minimalist design language in apparel does pose some challenges.

This means On cannot rely on exaggerated designs to attract attention but must instead build recognition through fit, materials, and overall style, telling more stories about materials and innovation.

Additionally, the supply chain complexity for apparel is much higher than for shoes, demanding better inventory turnover, fabric development, and production rhythm.

This field also faces competition from brands like Lululemon, Arc’teryx, and HOKA.

Overlap in offline channels makes this competition more direct. Top sports and lifestyle brands often target the same high-end malls, and On’s expansion will inevitably face head-to-head competition with established brands.

In cities like Guangzhou and Shanghai, On’s direct stores are mainly located in key shopping centers like TienHing Square, Taikoo Hui, and MixC, which also host brands like Lululemon.

“Currently, there are only a limited number of high-recognition outdoor brands,” said Du Bin, Secretary-General of the Shanghai Shopping Center Association’s Brand Committee. “Malls prefer to gather as many of them as possible to boost the overall attractiveness of the project.”

Entering the broader sports and lifestyle market from a running brand means On must compete directly with many mature brands within the same mall ecosystem and among the same consumer base.

However, management believes that as a young brand, On has no historical baggage, allowing more flexibility to adjust product offerings and more easily explore new expressions between professional sports and everyday wear.

The faster this step is taken, the more direct the competition will become.

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