(MENAFN) Switzerland-based sportswear manufacturer On, celebrated for its cloud-soled running shoes endorsed by tennis icon Roger Federer, is finding itself in the midst of controversy following a recent investigation by consumer magazine K-Tipp. The probe has exposed troubling ethical issues related to the company's pricing strategies, raising concerns about transparency and fair labor practices.
On, known for outsourcing its production to Vietnam, is reportedly paying a minimal cost of 17.86 Swiss francs (just over USD20) to produce its 'Roger Advantage' model, as revealed by K-Tipp. However, the company is retailing the same model for a significantly higher price of 190 francs (USD219) on its online platform, resulting in a substantial profit margin after factoring in logistics, marketing, and personnel expenses.
The pricing disparity becomes even more pronounced when examining On's hiking shoes, particularly the 'Cloudtilt Loewe' model. The K-Tipp investigation uncovered production costs in Vietnam amounting to a mere 20.80 francs (USD24), while On sets a steep retail price of 445 francs (USD513) – an over twentyfold increase from the production cost. On average, the company charges customers approximately eight times the manufacturing costs, a stark contrast to industry peers like Puma and Adidas, which typically charge around four times the production cost.
The scrutiny extends beyond pricing practices, with concerns emerging about the quality of On's products. Medical professionals have raised alarms about potential health risks associated with the softness of On's shoes, while consumer protection agencies report recurring complaints about low quality. One retailer of On shoes goes so far as to describe them as "classic disposable products," highlighting a significant challenge for the brand in maintaining consumer trust and loyalty.
As the sportswear industry faces increasing scrutiny over ethical considerations, On's association with Roger Federer and its subsequent ethical and quality-related controversies underscore the delicate balance brands must strike between marketing strategies, fair labor practices, and delivering high-quality products. The unfolding situation puts On in the spotlight, prompting reflection on the importance of transparency, accountability, and responsible manufacturing practices in the global sportswear market.
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