Nike and Adidas: the challenge from new sneaker brands
The global sneaker market is undergoing a real change in leadership. Giants like Nike and Adidas, long-time dominators of the sector, are seeing their position eroded by new brands and emerging competitors. This is according to a recent article in The Economist, which analyzes the dynamics behind this transformation.
The On revolution: from the garden to the global market
Among the new protagonists is On, a Swiss sportswear brand on the rise. Its story has unusual origins: in 2010, triathlete Olivier Bernhard experimented with pieces of garden hose to create more cushioned shoes. The idea was so successful that, together with two friends, Bernhard turned this intuition into a global business.
The result? An unprecedented boom. Last year, On recorded nearly two billion dollars in sales, with quarterly revenue growing 32% compared to the previous year. To date, the company has a market value of a whopping 17 billion dollars.
Changes in the sneaker market
Nike and Adidas continue to represent a significant share of the global market. In 2022, together, they generated 51% of the net sales of the 15 leading sports brands, according to Morgan Stanley. However, this percentage is down from 63% in 2018.
Established brands like New Balance and Asics, as well as new players like On and Hoka, are gaining ground. Chinese brands are also entering the scene with innovative proposals and competitive prices.
The importance of sneakers and market trends
Sneakers represent the largest share of sales for the major sports brands: 68% for Nike and 58% for Adidas. From 2018 to 2023, the sports footwear market grew by 50%, while the rest of the sportswear category increased by less than 20%.
This boom has been fueled by several trends: the rise in marathons, the influence of fashion, and the desire of young people to stand out through unique and bold designs.
The secret of emerging brands: innovation and strategy
New brands have bet everything on innovation to differentiate themselves.
- Hoka offers running shoes with ultra-thick, almost comical soles.
- On has developed super-lightweight marathon shoes, made by robots using innovative materials.
- On's research center in Zurich works on prototypes called “monsters,” combining unusual materials and revolutionary techniques.
The problems for Nike and Adidas
While emerging brands are innovating, giants like Nike and Adidas are dealing with some questionable choices.
- Research and development: Analysts argue that Nike has fallen behind, while Adidas has relied too much on long-established collections.
- Distribution: Both preferred to focus on direct sales through stores, websites, and apps, reducing relationships with large retailers. This prompted retailers to make room for emerging brands.
Future strategies
Nike has recently changed its CEO and is working to mend relationships with retailers. Adidas is following a similar path.
Meanwhile, emerging brands continue to innovate. On, for example, has collaborated with the luxury brand Loewe for an exclusive collection and launched an advertising campaign featuring Zendaya, the famous American actress.
Conclusions
The world of sneakers is constantly evolving, and consumers are rewarding brands that know how to stand out with bold innovations and an impeccable customer experience.
If you are a lover of sneakers or sports fashion, keep an eye on these new protagonists: they could be the ones to define the future of the sector.
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