Conquering the Swiss (American) way
A familiar name in a new place, sharp budget measures, colorful politicians
Dear Insider,
Consumerism is a decidedly American thing.
While only 51.8% of Swiss GDP comes from household consumption, Americans contribute to nearly 70% of their mighty nations economy by buying for themselves.
So if you want to “win the American way” - you get people to buy more.
And more…and more…and more.
In this edition of The Swiss Insider, you will read about one Swiss company aiming to do exactly that.
Enjoy!
Ian
🤔 PS: If you want to win “the Swiss way” - how would you do it? Reply and let me know your thoughts!
💡PPS: Let’s connect on LinkedIn and on X as well.
🗳 Colorful conferences - politicians in the news
On the one hand, in Tenero - a suave and self-confident (and very blue) Thierry Burkhart.
At Saturday’s general party conference of FDP-Die Liberalen, liberal leader Burkhart lobbied heard for stricter measures on illegal migration, emphasizing stronger border controls and regular refugee status checks.
Under Thierry Burkart's leadership, FDP is challenging right-wing (and the largest Swiss party) SVP on its core issue of asylum policy.
(This comes after his strategy of challenging the socialists in the last election failed miserably.)
FDP aims to reduce the social welfare burden and ensure proper enforcement of the Dublin Agreement with European partners - a tricky balancing act given Switzerland’s strained relationship with the EU at the moment.
(Foreign Minister Ignazio Cassis, an FDP federal councillor, should know something about that.
Meanwhile, in Herisau, Lisa Mazzone remains typically “green.”
At her Green Party's assembly, President Mazzone rallied the party faithful for a "referendum legislature".
The goal? Focus on opposing government initiatives related to military spending, highway expansion, and nuclear energy.
Mazzone also supported the Young Greens' "Environmental Responsibility Initiative," which seeks to align economic activity with planetary limits.
The days of the Greens demanding a seat on the Federal Council are long gone…
👟 How On is going to the moon
The sky is not the limit for On shoes.
And Roger Federer is not enough.
Even though the Swiss sports brand is enjoying significant growth, with a 47% increase in revenue in 2023, reaching CHF 1.79 billion - there is much more work to do.
To enhance its image and appeal globally, the company has partnered with Hollywood actress Zendaya as a brand ambassador. The erstwhile Louis Vuitton ambassador will co-produce campaigns and design future collections.
The move will help On shed its conservative Swiss “Bünzli” image and appeal to a younger, more (luxury) fashion-conscious audience.
While On has strong market presence in the U.S., it also sees significant potential in Asia.
The Inside Look:
💡While Roger Federer gave On a big name to back up its ambitions, the face of Zendaya in front of the brand does two things:
Add a female front to the comany’s image
Create brand association with Louis Vuitton and the luxury good segment
Add “diversity” to the mix, moving On past its Swiss roots
💡It should come as no suprise that On aims to expand first and foremost in the USA - where owning multiple pairs of its shoes is common.
The American consumer is unrivalled in its spending.
With a cool name like Zendaya promoting the company, On will aim for an entry with younger generations who have many years ahead - to buy many more shoes.
💡 Check out 10 top Swiss VC firms
Venture capital is a risky business - and Swiss investors often dislike that “R” word… But some adventurous pioneers are putting capital to good work - and investing (well) in Swiss startups.
🛍 Cross-border crunch
When the Swiss government wants more money, it finds a way to get it.
From 2025, Switzerland will reduce the tax-free limit for purchases abroad to CHF 150 per person per day, down from CHF 300.
This aims to discourage cross-border shopping and was supported by Swiss authorities.
Travelers can declare purchases through the "QuickZoll" app, and changes to VAT reporting will follow in 2026.
A stricter CHF 100 limit was considered but rejected to avoid overburdening customs.
But “shopping tourists” aren’t fooled.
The new reduction is clearly meant to finance other parts of the federal budget.
The Inside Look:
💡On the surface, a reduction in tax-free purchases will help bring in more VAT revenue. Widespread bureaucratic support shows it was seen as a “practical solution.”
💡The “unspoken message” however is that people should “buy Swiss” - which echos the nationalistic rhetoric that has spread over the past 5-10 years.
💡Subconsciously, it also highlights how Switzerland continues to keep Europe and other 3rd-countries at “arm’s length” - also in the face of ongoing EU treaty negotiations.
📈 A chart is worth…
With strict import controls and tariffs in place to protect local farmers, Switzerland has the highest food prices in Europe - by far.
The Bonus
🪫 Power pushing In 2024, Switzerland reached new heights - as an exporter of electricity to its European neighbours. Most of the export product is hydropower, driven by heavy rainfall over the past year. (Link)
🏪Full house - Retail giant Coop has decided to buy out its American partner Philipps 66 and take complete control of the Coop Pronto store chain with its 324 stores around the country. The price? Over 1bn CHF. (Link)
🔴Running red & black - Budget projections for 2025 are splitting Swiss cantons - almost half expect to run a deficit. Meanwhile, Canton Bern expects a surplus of nearly 250m CHF. Zug will also hit black. (Link)