Key facts
- Nike is restricting wholesale distributors' online sales in China starting in January.
- Consumers will be directed to official Nike channels, including Tmall, JD.com, Douyin, and Nike's website and app.
- The move aims to rebuild trust and sell products at full price.
- Nike's sales in Greater China fell 17% in the fourth quarter.
- Domestic rivals Anta and Li Ning are increasing their market share.
Nike is implementing a strategy to control its online sales channels in China, aiming to combat a fragmented and cluttered marketplace and regain market share from domestic competitors. Starting in January, key sportswear retailers will cease online sales of Nike products, shifting their focus to in-store experiences. Consumers will be directed to official Nike-branded digital storefronts on major e-commerce platforms like Tmall, JD.com, and Douyin, as well as Nike's own website and app.
Cathy Sparks, Nike's vice president and general manager of Greater China, stated that the move is intended to rebuild trust with Chinese shoppers and ensure products are sold at full price. This initiative comes as Nike faces persistent sales declines in its third-largest market, with sales in Greater China falling 17% on a constant-currency basis in the fourth quarter. The company is also contending with the rise of domestic rivals such as Anta and Li Ning, as well as the growing popularity of foreign brands like On and Hoka.
Nike CEO Elliott Hill's turnaround strategy, which includes refocusing on sports and rebuilding wholesale relationships, continues to face challenges. A Nike spokesperson confirmed that the majority of its 16 store partners in China will stop selling online. However, BNP Paribas senior analyst Laurent Vasilescu expressed skepticism, calling the move a "strategic misstep" and suggesting Nike has a product problem rather than a distribution issue. In response to market demands, Nike is also prioritizing the development of products more relevant to Chinese consumers, having appointed a vice president for local product creation in Greater China.