In a recent revelation, the Swiss athletic shoe brand On, endorsed and part-owned by Roger Federer, is under fire for selling its sneakers at astronomically high prices compared to their production costs in Vietnam.
The company, famous for its claim of ‘running on clouds’, is charging Swiss consumers sky-high prices for shoes made for a fraction of the retail cost.
A deep dive into confidential customs data by the consumer research company K-Tip revealed that On’s “Cloudway” sneakers, retailing for a whopping 200 Swiss Francs ($230 USD), are manufactured for just 20.73 Francs ($24 USD).
Even more shocking, the “Roger Advantage” model, directly associated with Federer and priced at 190 Francs ($219 USD), costs a mere 17.86 ($21 USD) Francs to produce. This marks a staggering markup, over ten times the production cost.
But the price shock doesn’t end there. On’s most expensive shoe, the “Cloudtilt Loewe,” hits the shelves at an eye-watering 445 Francs ($513), yet it’s made for just 20.80 Francs ($24 USD).
Compared to rivals like Adidas and Puma, On’s pricing strategy seems excessively greedy, as they charge significantly more than these well-known brands for similar products.
Quality concerns add fuel to the fire. Despite the hefty price tag, On’s shoes have been criticised for poor durability and comfort, with some users reporting tendonitis and rapid wear. This contrasts sharply with the company’s luxurious marketing and Federer’s endorsement.
Amidst these shocking price markups, On’s founders and top executives are making millions, drawing criticism for the stark contrast between their earnings and the modest production costs.
From a Fan to a Critic: My Perspective About On Running
As a long-time customer of On Running Shoes who purchased my first pair of shoes in early 2017, long before Federer was pictured wearing them or got involved in the business, I’ve witnessed the brand’s evolution, particularly since its IPO.
I’ve owned running shoes, casual trainers, hiking boots and terrain shoes. I have also posted about their products several times on Perfect Tennis.
Initially, I was a fan; the designs were great, and I found them comfortable. My only real bugbear was the sole’s inability to handle wet or slippy conditions.
They were useless in the mountains or winter when it rained, but the recent decline in quality, while the price continues to increase, cannot be overlooked.
My most recent purchases were in 2022, and I was disappointed with the build quality, so much so that I’ve not returned to their lineup despite purchasing several other pairs of footwear since then.
The price-to-performance ratio, while always questionable but something I could stomach, no longer makes any sense. Unless prices drop or the quality increases dramatically, I wouldn’t pay the full price for another pair again.
What do I think about their profit margins? I think it’s a bit of a joke for Swiss consumers that they pay over the odds compared to other markets, but I’m not shocked; if people are willing to pay these prices, then in many ways, that’s their fault. Vote with your wallet (or your feet)!
Perhaps the biggest revelation for me was not the markup but the actual cost of the shoes imported; my guess would have been nearer $10!
What about the Roger Pro Tennis Shoe?
The ‘Roger Pro’, a model designed in collaboration with Roger Federer, which he wore on the court before his retirement, was launched for the general public in March 2022.
While the shoe looks fantastic and is easily one of the best-looking tennis shoes you can buy (it almost can be worn casually), it has been disappointing for tennis players.
Priced at $200, it is the most expensive tennis shoe on the market, yet its durability is questionable at best.
Customer reviews consistently highlight its lack of longevity, with many reporting wear through in just a few weeks. There is also no durability guarantee like some shoes offer.
A tennis shoe’s performance and durability are paramount for recreational players. They aren’t professionals who can get a new pair every week.
So despite its stylish design and endorsement, the’ Roger Pro’ falls short in these crucial aspects.
The lack of durability makes it impractical for regular use, particularly for players who spend a few hours a week on the court, and in my opinion, it’s one to avoid; Asics, Mizuno, and even Lacoste offer better tennis footwear.
High Profits, Low Wages: Is On Exploiting Vietnamese Labour for Luxury Shoe Production?
What about On’s business model? The labour practices of On, as highlighted in the ktipp.ch article, will present a concerning picture for many people.
On has pledged that “100 percent” of its key suppliers in Vietnam will pay “livable wages” starting in 2025, but the company has not provided a clear definition of what constitutes a “livable wage.” According to Public Eye, a nonprofit organization, shoe factory workers in Vietnam earn the minimum wage, which ranges from CHF 120 to CHF 170 per month for a 48-hour workweek. With overtime, some may reach CHF 250 per month. However, these wages are widely regarded as insufficient to support a family’s basic needs, as noted by David Hachfeld of Public Eye. In 2022, the three Swiss founders of the company and its two CEOs collectively received CHF 19 million in compensation. This came after the five individuals had already amassed over CHF 80 million following the company’s initial public offering in 2021. The exact amount received by Roger Federer for his involvement with On remains undisclosed, as he did not respond to inquiries from K-Tipp. Eric Breitinger, K-Tipp
Using cheap labour costs and high retail prices is not uncommon in the industry, and given that probably half the products I own would be deemed as manufactured from exploitable labour, it would be hypocritical to single out On Running in this regard.
After all, we all know the village idiot who posts on social media about their dislike of capitalism and how the system needs crushing, yet they do so from a brand new iPhone 😁
However, Vietnam’s manufacturing sector is notorious for demanding working environments, frequently characterised by long hours and inadequate ventilation. As recent investigations suggest, the extent of On’s markups appears excessively exploitative, and I find the Swiss flag on the shoes slightly disingenuous.
The business model creates a double whammy effect, adversely affecting both the workers in Vietnam and consumers worldwide.
On the one hand, labourers in Vietnam contend with challenging working conditions and meagre wages, struggling to make ends meet while producing these sportswear products.
On the other hand, consumers who purchase On’s products often pay exorbitant prices for what many realise is subpar quality. This stark discrepancy between production costs and retail prices leaves consumers feeling shortchanged for their hard-earned money.
Overall, my advice is if you like On shoes, are happy with the quality/comfort/performance, and the price is no issue, then keep on trucking, but always remember to shop around!
Do you believe that the premium prices charged by brands like On for their sports shoes are justified by the quality and durability of their products? Are there other sports shoe brands that you believe offer better value for the quality they provide? Let me know in the comments.
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