OnQ Next Chapter by 5th Wall PE.

01Executive Summary

• The 111 thesis: Qumbet Asia (GSI) + OnQ USA + Fikri Özdemir's Industrial Leadership = 111. Three institutions sum to 3 in ordinary arithmetic; in alliance architecture each supplies the input the others lack (supply × product × door), so the alignment reads 111. The bond that makes the alignment possible is Grand Source Investment (GSI) – Qumbet's quarter-century, three-continent (Asia–Europe–America) institutional know-how network and the corporate selectiveness that stems from its Turkish roots.
• OTC finding: U.S. OTC retail reached $58.2B (2025, CHPA), with vitamins/supplements a separate ~$75B line; the "vacancy" is documented — all three legacy houses changed hands, North American organic growth is flat-to-negative, private label holds 21.5% and keeps winning, and drugstore chains collapse while volume migrates to big box.
• Channel finding: Big box is where the migrating OTC shelf lands; in-store digital media is retail advertising's fastest-growing slice (+45.5%); the locked-shelf crisis destroys conversion — OnQ's Dfi™ secure-but-open merchandising is the direct remedy.
• Gen Z finding: Personal/hobby electronics is a mosaic of $1–20B+ sub-segments; 63% of Gen Z buys electronics in physical stores, yet creator gear, sim racing, 3D printing and retro have near-zero in-store experience.
• Strategy: First the table, then the product, then the brand. Three revenue lines (fixtures + revenue-share product + in-store media); the new core: under Fikri Özdemir's leadership, an OnQ-branded mass-production line in Akron fed by Asian ODM modules, entering OnQ's own retail channels on the Kroger sushi-bar model; five-year target of 2,000 wellness tables + 500 modular pods (model assumption).

02The "111" Thesis — Explanation and Proof

The thesis in one sentence: Qumbet Asia (GSI) + OnQ USA + Fikri Özdemir's Industrial Leadership = 111. Three separate "1"s sum to 3 in ordinary arithmetic; aligned side by side, each completes the others' missing input, positional value emerges, and the alignment reads one hundred eleven.

The Players (for a first-time reader of this file)

The Intersection: Atmosphere × OnQ

What Atmosphere lacks is an executor that can build phygital infrastructure at national scale and that retailers already trust; what OnQ lacks is new categories beyond electronics, a full Akron, and a product-brand layer of its own. OnQ already manufactures the hardware of the "Third Channel": thousands of connected screens delivering billions of shopper impressions (source: Project Polaris CIM, Q3 2026). Atmosphere brings the business model to that hardware — membership, position rights, revenue share, retail media. The combined name: "5th Wall Phygital Elements, powered by OnQ" (fifthwallpe.com); the intended structure is the acquisition of OnQ's shares on ~$50M deferred-payment terms (model assumption; to be fixed in the 30-day leverage plan).

Proof: why 111, not 3

1. Door proof (OnQ USA): manages ~80% of the electronics category at its largest customer; 99%+ OTIF; Walmart Connected Home across 4,000+ stores for 8+ years with 40 refreshes. A new brand needs years to enter big box; in this alliance the door is already open. Health & beauty expansion has begun at the same customer; a major health & beauty display is proposed at Costco (Polaris CIM).
2. Capacity proof (Akron): 213,000 sq ft + 65,000 sq ft expansion; production largely single-shift. Second and third shifts can multiply capacity under the existing roof — the half-empty capacity is not a cost; it is growth inventory sitting ready on the balance sheet.
3. Product proof (Fikri Özdemir's leadership): with management from the Arçelik/Beko school, a mass-production line is established in Akron; OnQ-branded electrical assembled products are built from Asian ODM modules and enter OnQ's own sales channels on Kroger's third-party sushi-bar model. The brand on the table is now OnQ's own.
4. Supply proof (GSI–Qumbet): GSI–Qumbet, in its corporate identity as an Arçelik solution partner, applies its Asia–Türkiye supplier network to OnQ's COGS; Octanorm (U.S. base: Lithia Springs, GA) is on board as the modular standardization partner.
5. Ground proof (the market itself): OnQ's own CIM states that growth is spilling beyond electronics into connected home, healthcare and personal wellness; the "Next Generation" program rebuilds the entire electronics department, health and AI included.

03The U.S. OTC Consumer Health Market

U.S. OTC retail sales reached $58.2B in 2025 (CHPA; first year including e-commerce; the 2024 in-store basis was $44.3B; underlying growth ~2%/yr). Vitamins-minerals-supplements (VMS) sit outside that total as a separate line: $69.3B in 2024 (NBJ), ~$75B in 2025. Together, the "OTC + VMS" shelf is a ~$130B foundation.

Channel split and the drugstore collapse

• Physical retail held 86% of OTC spend in 2024; e-commerce 13.7% and growing, led by Amazon (Euromonitor).
• CVS closed ~900 stores in 2022–24 plus 270 in 2025; Walgreens is cutting ~1,200 over three years; Rite Aid liquidated in 2025 (EMARKETER). CVS vitamins priced ~63% above Amazon (Profitero).
• VMA assessment: this is the channel leg of the vacancy — the shelf is moving into the big box channel OnQ has inhabited for 22 years.

The leadership vacuum — evidence

1. Ownership churn: J&J→Kenvue→Kimberly-Clark ($48.7B; shareholder approval Jan 2026, closing expected H2 2026); GSK/Pfizer→Haleon (Pfizer exit ~$3.3B); Sanofi→Opella (CD&R, closed 2025).
2. No growth: Haleon FY2025 North America organic −0.4%; VMS lines declining.
3. Private label marching: 21.5% of dollars / 23.7% of units (Q1 2025); 6 of the top 10 health "brands" are store brands; Perrigo is the dominant manufacturer behind them.
4. DTC newcomers digital-only: Hims & Hers 2025 revenue $2.35B (+59%); Thorne pacing toward ~$650M on Gen Z demand.

Trends

• The self-care shift is the industry's growth thesis (IQVIA); the GLP-1 era grows pharmacy while eroding grocery baskets; companion supplements are a flagged opportunity (NielsenIQ).
• Rx→OTC switches: Narcan and Opill now in national retail.
• Medical devices are becoming shelf SKUs: the OTC hearing-aid rule (2022); OTC CGMs (Dexcom Stelo at $89/month, Abbott Lingo, 2024). FSA/HSA support (unverified).

04Big Box Retail Channels

Vendor entry mechanics

• Category buyers run annual line reviews; Walmart Open Call 2025: 500+ entrepreneurs, 100+ "Golden Tickets".
• EDI, OTIF penalties and vendor-funded promos are standard. Typical margin norms — mass ~30–40%, club ~14–15% cap, drug 40%+ — unverified.
• Alternative doors: private label / co-manufacturing (the Perrigo route) and vendor-funded shop-in-shops — which is precisely the business OnQ has executed for 22 years.

Retail media and in-store digital

• U.S. retail media ~$62.4B (2025); Walmart Connect past $5B/yr (~30% growth); Roundel $649M (+25%); Costco building its own network on member data.
• In-store digital media is only ~0.8% of omnichannel retail ad spend but the fastest-growing slice: +45.5% in 2025. OnQ's Converge™ screens are that slice's hardware.

In-store realities, 2025–26

• Locked-shelf crisis: locked merchandise at 68% of mass retailers and 62% of drugstores; 27% of shoppers abandon or switch (Numerator). Dfi™ secure-but-open merchandising answers it directly.
• Remodel wave: Walmart's 650+ "Store of the Future" remodels; Best Buy refreshing merchandising chain-wide while adding shop-in-shops.

05Gen Z and Beyond — Personal & Hobby Electronics

VMA finding: the segment is not laptop/TV/phone-sized, yet the umbrella is enormous — CTA forecasts $565B U.S. consumer-tech retail revenue for 2026 (+3.7%) — and the "personal/hobby/accessory" layer beneath it is a mosaic of fast-growing, largely unclaimed $1–20B+ sub-segments.

How Gen Z shops this market

• Discovery is social, purchase is physical: 63% buy electronics in stores; 76%+ find stores more enjoyable; 95% visited a mall in the past 3 months (ICSC). ~2x influencer-driven discovery (35% vs 19%); 29% see online, buy in-store (YouGov).
• TikTok Shop U.S. GMV $15.1B (+68%, 2025) — in gadgets it drives discovery more than checkout.
• "Dupe" culture is a flex; fandom/IP collabs (Razer × Sanrio) turn peripherals into collectibles.
• Spending power: Gen Z global spend projected at $12T by 2030 (NIQ Spend Z).

Brand × product competitive map

06Entry Strategy: OnQ's Access + Akron's Capacity

The essence: we do not enter these markets as a new brand fighting for shelf space; we enter as the category platform that already owns the table. The sequence is critical: first the table, then the product, then the brand.

Three revenue lines (one table, three tills)

1. Fixture programs: table/display sales + refreshes — refresh margins run 45–54%, 54% of revenue already recurring (Polaris CIM).
2. Revenue-share product sales: a share of sales from the products on the table (Kroger's third-party sushi-bar model; "The Phygital Wellness Kitchen").
3. In-store media: retail media over Converge™ screens (the +45.5% slice).

Category priority

OnQ-Branded Production — Fikri Özdemir's Leadership, Industrial Design and the Asian Supply Architecture

The plan's new core: OnQ moves from the table to the brand. Under Fikri Özdemir's leadership, with the mass-production discipline of the Arçelik/Beko school, a new mass-production line is established in Akron; OnQ-branded electrical assembled products are built from Asian ODM modules and enter OnQ's own retail channels on Kroger's third-party sushi-bar model. Target position: a mid-scale, flexible Phygital Elements market leader producing next-generation AI-built devices and solutions for Gen Z and beyond. Scale analogy: a vision on the order of Apple's smart-home ambition is one OnQ could very well design for Walmart — the design sits with OnQ, and the shelf is already OnQ's.

The industrial design leg: an Industrial Design Team in the Arçelik tradition. Example profile — Serdal Korkut Avcı: 30+ years in product design; Director of Industrial Design, Arçelik Group (2015–2025; 12 international brands; 130+ international design awards in the period — Red Dot, iF, Good Design; creator of the VUX virtual-user-experience concept); Executive Design Director, Beko (2022–2025); today a consultant and educator on integrating Generative AI into the industrial-design process (Özyeğin University; MIT xPro AI certifications). This is precisely the design-to-production bridge the "AI-built device" line requires.

The China-sourcing + Turkish-management principle: China's manufacturing depth is retained; Chinese brand exposure is reduced to zero. The data points the same way: China's phone exports to the U.S. fell 67% YoY while shipments via Vietnam nearly doubled — "China is stepping sideways, not out" (OEC). Akron must be the chain's genuine point of transformation in the U.S.: the Element Electronics case showed that mere "screwdriver assembly" satisfies neither the FTC's "Assembled in USA" threshold nor tariff protection; component-level duties are paid regardless, and origin changes only through substantial transformation — trade-counsel opinion is a Phase 0 item.

Asian manufacturer candidates worthy of the plan (5th Wall shortlist — verification with Fikri Özdemir)

Precedents: SharkNinja (Chinese engineering + U.S. brand: 2025 revenue $6.4B, net income +60%) and VeSync/Levoit ($650M) prove the model works; Instant Brands (one hero SKU, Chapter 11) and Element Electronics (superficial assembly) mark its limits. Tariff note (Oct 2026, secondary source; trade-counsel verification required): de minimis is gone for all countries (which favors a domestically assembled brand against Temu-style rivals); a new Section 301 layer of ~12.5% on China/Vietnam/Thailand and 10% on Malaysia/Indonesia; Section 232 (25%) on chip-containing articles directly concerns the AI-device line.

Phase plan

Risks and responses

KPIs to track: pilot table count, monthly revenue per table (RevPAM logic), Akron shift utilization, refresh frequency, media revenue per table. All 2027–2031 figures and five-year targets remain "5th Wall observations" until verified.

07Verification List, Attribution Rule and Sources

This report was prepared by Value Masters Academy (VMA) at the request of Mehmet Narin, so that the valuable intelligence compiled from open sources may serve as the foundation on which the two experts — Paul Chapuis (OnQ) and Fikri Özdemir (Industrial Leadership) — verify the data and add their own value. Attribution rule: VMA built all of its data upon Mehmet Narin's 32 months of field work on behalf of ALA and upon the capacity of GSI–Qumbet, Octanorm, Fikri Özdemir and Paul Chapuis. Every unverified projection is presented as a "5th Wall observation"; verification rests with the two experts, and VMA updates the model with their returns.

To verify

• ☐ OnQ 2026P revenue of $60M and $5.9M adj. EBITDA, with pipeline support — Paul Chapuis
• ☐ Actual Akron utilization and 2nd/3rd-shift unit cost — Paul Chapuis
• ☐ Status and timeline of the Costco health & beauty display proposal — Paul Chapuis
• ☐ Capacity, quality and unit-cost verification of the Asian ODM shortlist (Joyoung/Xinbao-class ASEAN lines, Transtek-type health ODMs, Taiwanese ODMs' Vietnam lines) — Fikri Özdemir
• ☐ Retailer appetite for revenue-share terms (Kroger sushi-bar precedent) — Paul + Fikri
• ☐ Weak/unverified web items: global OTC $142B; mass-channel OTC share; channel margin norms; Target store count; OTC hearing-aid dollar size; FSA/HSA; retro handhelds $4.2B; Baseus rankings; action-cam shares (Japan proxy); Bambu/Best Buy shelf presence; the Oct 2026 tariff set (Dimerco secondary source)

Principal sources

Internal: Project Polaris CIM (Q3 2026, Northern Edge) · Internal — HL Display presentation · VMA/ALA field work · Serdal Korkut Avcı CV. External: CHPA · Euromonitor · EMARKETER · Haleon FY25 · Walmart 10-K FY2026 · Omdia · ICSC · Momentum Works · NIQ Spend Z · Bamboo Works (JS Global/SharkNinja) · Supply Chain Dive · Transtek · TrendForce · OEC · Dimerco · AAM (Element) · Retail TouchPoints