Nike is set to terminate agreements with hundreds of online distributors in China starting January 2027, as part of a major business restructuring plan to revive sales in the Chinese market, which have declined for two consecutive years. The company said it currently has more than 1,000 online sellers in China, and the large number of online stores has fragmented the consumer experience too much, with exceptions for certain authorized partners. Nike's revenue in Greater China has been falling amid competition from local brands and shifting consumer behavior. Under this plan, Nike will increase investment in its own stores, of which it has more than 200 in China, and work with partners to enhance the in-store retail experience. Analysts at Citi view this decision as reflecting Nike's willingness to accept a smaller revenue base in exchange for higher profits, but warn that Chinese consumers may perceive Nike as de-emphasizing the Chinese market. Meanwhile, analysts at Bloomberg Intelligence say it is an effort to regain control of brand image and pricing power, though it may lose market share in the short term.
Nike IncNike is terminating hundreds of online distributors in China, which may reduce sales and market share in the short term.
Citigroup Inc.