Nike is making a major shift in how it sells products online in China, hoping to win back consumers by funneling them toward official Nike channels as the American sportswear company continues to lose market share to Chinese competitors.
The strategy involves pulling back on wholesale distributors’ ability to sell Nike products through the internet. By doing so, the company hopes to rebuild consumer confidence and maintain full-price sales, according to Cathy Sparks, Nike’s vice president and general manager of Greater China.
Beginning in January, the majority of key sportswear retailers across China will discontinue online sales of Nike merchandise and shift their focus to brick-and-mortar locations, Sparks told Reuters. On the digital side, Nike products will be available exclusively through branded storefronts on major Chinese e-commerce platforms Tmall, JD.com, and Douyin, as well as through Nike’s own website and app.
Sparks, a 25-year Nike veteran who was tapped to lead the company’s Chinese operations earlier this year, described the current state of the online marketplace as a problem. “Our marketplace has become so fragmented and cluttered,” she said. “What consumers want is an experience that’s premium, true to the brand, trustworthy, and certainly connected between digital and physical.”
China represents Nike’s third-largest market globally, and the company’s performance there has been a persistent concern. Sales in Greater China dropped 17% on a constant-currency basis during the fourth quarter — a steeper decline than the 10% drop recorded the quarter before. Homegrown brands Anta and Li Ning have been steadily eating into Nike’s customer base, while foreign competitors On and Hoka have also gained momentum in the region.
The ongoing struggles in China have raised doubts among investors about the effectiveness of CEO Elliott Hill’s turnaround plan. In his roughly two years leading the company, Hill has worked to refocus the brand on sports, mend wholesale relationships in North America, and roll out new products.
A Nike spokesperson confirmed that most of the company’s 16 store partners in China — which collectively operate thousands of Nike retail locations — will no longer conduct online sales.
News of the potential e-commerce shift first surfaced in local Chinese media reports in June. BNP Paribas senior analyst Laurent Vasilescu responded critically at the time, calling the move a “strategic misstep” that would create openings for rival brands. “Nike doesn’t have a distribution problem in China and elsewhere. It has a product problem,” Vasilescu wrote in a research note.
Sparks acknowledged that developing products more tailored to Chinese consumers is also a priority. She noted that the company has named a vice president of local product creation specifically for the Greater China region.
