Core Insights - The company On has experienced rapid growth since entering the Chinese market in 2018, becoming a popular choice among consumers, rivaling established brands like Nike and Adidas. However, recent financial reports indicate a decline in profitability, with net profit dropping significantly in the first half of 2025 and losses reported in Q2 2025 [1][3]. Financial Performance - In the first half of 2025, On achieved net sales of 14.758 billion Swiss francs, a growth of 37.2%, but net profit fell by 87.1% to 15.8 million Swiss francs [3][4]. - Q2 2025 saw a net sales figure of 7.492 billion Swiss francs, a year-on-year increase of 32%, but the company reported a net loss of 40.9 million Swiss francs, compared to a profit of 30.8 million Swiss francs in the same period last year [3][4]. - The net profit margin has also declined, with Q2 2025 showing a negative margin of -5.5%, down from 5.4% in the previous year, and the first half of 2025 showing a margin of 1.1%, down from 11.4% [4]. Market Expansion and Strategy - On has seen significant growth in the Asia-Pacific region, with net sales reaching 2.397 billion Swiss francs in the first half of 2025, a remarkable increase of 114.8% [5]. - The company is focusing on expanding its presence in China, with plans to increase the number of direct stores from 70 to over 100 by 2026, necessitating the opening of at least 30 new stores annually [5]. - On's marketing strategy includes partnerships with platforms like Weimeng and collaborations with celebrities, which have led to marketing expenses constituting about 10% of net sales [5][6]. Brand Positioning and Consumer Perception - On is perceived as a premium brand, with products priced above 1,000 yuan, and is often associated with luxury branding, leading to mixed consumer perceptions [7][8]. - The brand's marketing emphasizes high-end positioning, which some consumers view as a strategy to capitalize on the middle-class demographic rather than focusing on the technical aspects of running shoes [8]. - Despite its strong brand presence, there are concerns regarding customer engagement and community management, with reports of dissatisfaction among long-term users regarding the brand's focus on attracting new customers [9].