ON & Hoka: Can the Uprising Shoe Brands Just Do It Against the Big Boys?

The thought process of running a quick surface study on some of the biggest players in the footwear industry is not easy, let alone crafting this article piece.

But hear me out, and I hope you have some takeaways before deep-diving into each respective company.

What makes Nike and Adidas? Sure these 2 powerhouses have a long-standing track record and presence in the sporting world. But sporting items and accessories can be so diverse, why the laser focus just on footwear?

Footwear is the major segment that contributes a significant portion of their business. For Nike, it is 68% of its FY 2023 revenue, while for Adidas, its

Now all players within this industry do not report their operating profit by segments, but by looking at ON’s sales, 95.5% of its revenue is derived from the sales of shoes.

And as footwear-centric businesses, even the approach to having apparel as an offering would see them carving a niche under urban athleisure.

Not to forget in the bigger realms of the apparel business, threats posed by fast fashion companies are imminent.

Source: Statista

Based on available resources, Nike and Adidas still possess supremacy when it comes to market share and sales. Nike counts the US as its largest and solid stronghold, thus the staggering advantage in sales over second place Adidas.

Source: Statista

If we dive deeper into what makes a Nike or an Adidas, we would have noticed the marketing supremacy edge by having a face to the brand. It is straightforward and logical for top sportswear to find a face representing them.

I would also go ahead and argue that this is the exact blueprint that the fashion houses employ.

Source: DIOR

If I take a leaf out of a Marketing 101 textbook, it’s not so much about the shoes or clothing or functionality that catches the eye, but rather who that person feels he or she becomes when they put on an LVMH, Dior, Adidas and Nike.

Source: Respective companies’ Annual Report compilation

By adjusting each company’s revenue into USD, we start to see in terms of relativity how big and how small each company are.

Asics, a Japanese running shoes company which also owns the Onitsuka Tiger brand, also has a strong presence observed, but sales are nowhere close to the big boys. Skechers, another US shoe brand, sees its lead versus Asics increasing, and closing the gap with Adidas.

Source: Respective companies’ Annual Report compilation

But when looked at from a YoY growth perspective, the smaller and more agile players like Hoka and On showed better growth. No doubt these companies started with a smaller base, enabling a rapid growth rate.

Though it might not be a long article, it has involved plenty of read up, data tabulating.

I ended up completing this article within a few days, and the final thoughts, seems like Nike and Adidas’ dominance still holds ground. Worth spending more time digging into Nike and Adidas to find the better company from a business and value perspective.

Hoka and On’s growth looks commendable but pretty small for now. Until we start seeing billboards and major sporting events with their adverts, we’ll get a cue that the company has plenty of ammunition to launch an assault against Adidas and Nike outside of the courts, racecourse, turfs and fields.

There are 2 sides to the coin for this simple study and comparison - Nike and Adidas are still worthy sporting and footwear marketing powerhouses, or there is a case to deep dive into On and Decker brands to profit from their growth spurt.

I fancy the former more. What about you?