(ONON) On Holding AG PESTLE Analysis Research

Global footwear output still depends on Asia-based sourcing, with over 70% of shoes made in the region, so any port delay, tariff shift, or sanctions risk can push back production and raise freight costs. For On Holding AG, spreading orders across Vietnam, China, and other hubs lowers concentration risk and helps keep stock flowing. One weak link can stall the whole chain.

• Asia routes drive most shoe supply.
• Port or sanctions shocks cut output.
• Supplier mix lowers concentration risk.

On Holding AG’s online sales face tighter cross-border checks on customs, VAT, and parcel rules. The EU has charged VAT on all low-value imports since July 2021, and the U.S. de minimis threshold stays at USD 800, so more shipments now face screening and fees. That can slow delivery, lift returns costs, and push up final prices for consumers.

• Customs and VAT add friction to e-commerce
• Low-value import rules are getting stricter
• Delivery speed and returns costs can worsen
• Final consumer pricing can rise

Global sportswear demand stays strong, with running, training, and athleisure still the fastest-growing use cases. The category’s scale supports On Holding AG’s store rollout and e-commerce spend, while higher brand reach can lift share faster than the market. If On grows awareness above category growth, it can win more full-price sales and improve mix.

• Running, training, athleisure keep expanding.
• Growth supports stores and e-commerce.
• Faster awareness growth can drive share gains.

Fast product cycles mean On Holding AG must keep stock tight: buying too much lifts markdown risk, while buying too little caps sales. For a growth brand, cash conversion matters as much as revenue because slower inventory turns trap cash in unsold shoes and apparel. That makes inventory days and sell-through rates key operating metrics in 2025.

• Tight stock cuts markdowns.
• Underbuying misses demand.
• Cash conversion shows discipline.

Shoppers now ask for recycled content, repairability, and proof of durability, and they punish vague green claims fast. In 2025, On Holding AG can turn that scrutiny into trust by showing material sources, product life data, and repair options. Clear product storytelling matters: when the sustainability claim is specific, conversion is more likely.

• Proof beats vague eco claims
• Durability supports repeat buys
• Repairability builds trust

Women’s sports and family fitness spending keep rising, which supports On Holding AG’s women and family segment. In the U.S., women’s sport participation is at record highs, and household wellness spending is still climbing, so demand leans toward shoes that mix fit, comfort, and style. Inclusive sizing and balanced marketing can widen On Holding AG’s addressable market and improve repeat purchases.

• Women’s sports participation is growing.
• Family fitness spend is rising.
• Fit, comfort, and style matter most.
• Inclusive sizing expands reach.

For On Holding AG, demand sensing across wholesale, e-commerce, and stores can cut stockouts and markdowns by matching supply to fast-moving sell-through. Better forecasting also tightens regional inventory allocation, which matters in a business that reported CHF 2.08 billion in net sales for 2025, where even small demand misses can move margin.

• Sharper forecasts lower excess stock
• Demand sensing supports channel mix
• Regional allocation improves fill rates
• Less markdown pressure protects margin

On Holding AG’s omnichannel retail systems matter because brand stores, retail partners, and online shops must share stock and customer data in real time, so shoppers see what is actually available. In 2025, On reported net sales of CHF 2.32 billion for FY2024, and tighter channel control helps protect that growth by cutting checkout friction and stock-outs.

These tools also let Company Name track channel productivity by market and SKU, which matters when one shoe model sells better in one country or size run. One clean view of demand across stores and e-commerce helps Company Name shift inventory faster and keep conversion high.

• Share stock data across all channels
• Reduce checkout friction and delays
• Measure sales by market and SKU
• Improve in-stock rates and conversions

Supply-chain due diligence is getting tougher in the US, EU, and Germany, so On Holding AG must map suppliers and prove labor checks. Germany’s LkSG already covers firms with 1,000+ employees, and the EU CSDDD starts phasing in from 2027 for companies with €1.5bn turnover and 5,000+ staff. Non-compliance can trigger audits, import bans, and costly fixes.

• Map suppliers end to end
• Verify labor conditions regularly
• Expect audits and import risk

Sustainability claims are getting tighter legal scrutiny in 2025. Under EU green-claims rules, generic environmental marketing needs proof, and penalties can reach 4% of turnover; for On Holding AG, that means harder evidence for recycled content, emissions, and circularity, plus higher compliance spend but lower litigation risk.

• Proof before promotion
• More legal and audit cost
• Lower greenwashing risk

Climate disruption can slow On Holding AG’s apparel and footwear flows when floods, heat, or storms hit factories, ports, or trucking routes. Global insured losses from natural catastrophes were about $140 billion in 2024, a sign that supply shocks are staying costly and frequent.

• Multi-country sourcing raises bottleneck risk.
• Buffer stock can protect service levels.
• Resilient sourcing lowers outage impact.

Buyers are checking recycled, bio-based, and long-life materials more closely, and that matters because Textile Exchange said only 7% of global fibre input was recycled in 2023. For On Holding AG, durability can support premium pricing if the claims are clear and verified, because a longer shoe life lowers cost per wear and makes sustainability feel real.

• 7% of fibre input was recycled in 2023.
• Durability now signals lower impact.
• Credible claims can protect pricing.