Digital Market Chaos! Nike Announces Plan to Terminate Thousands of Online Distributors in China Starting January Next Year

Nike, the world's largest sports apparel company, announced on Tuesday the 21st that it plans to terminate thousands of online distributors in China starting January next year, aiming to streamline the chaotic digital marketplace and reignite business growth in the region.

Tebot disclosed in a Hong Kong Stock Exchange announcement that after trading hours on the 21st, it received formal notice from Nike stating that its online platform sales of Nike products in mainland China will fully terminate starting January 1, 2027.

According to U.S. CNBC, starting next year, Nike's online sales channels will primarily focus on its official website, official app, and brand flagship stores operated by Nike on major Chinese e-commerce and social platforms such as Tmall, JD.com, and Douyin.

Currently, consumers can purchase Nike products through thousands of online stores in addition to these official channels. These stores are operated by Nike's offline partner stores and secondary distributor network in China.

While this vast online sales network allows consumers convenient access to Nike products, it has also led to inconsistent brand image and chaotic pricing, hindering Nike's efforts to reverse its declining sales in China.

Cathy Sparks, Nike's newly appointed Vice President and General Manager for Greater China, wrote in a letter: "These new official flagship stores will serve as unified, higher-standard core hubs within each platform's ecosystem, offering clearer product displays, more refined brand storytelling, and a more consistent consumer shopping experience. This move aims to consolidate the core channels through which consumers initiate and complete their purchase journeys, ensuring a direct, standardized brand experience that highlights authentic Nike brand quality."

She added: "This is not about reducing consumer purchasing channels, but about reducing channel fragmentation and improving the end-to-end consumer experience. When consumer experiences remain consistent, brand strength can be further enhanced."

Nike's strategy to scale back its online channel footprint aims to deliver a higher-quality, standardized shopping experience while regaining control over online pricing.

However, market concerns persist that this move could lead to a significant decline in revenue in China. Over the past five years, Nike's business in this region has already shrunk by approximately 30%.

Last month, Chinese media first reported Nike's plan to terminate online distributors. Laurent Vasilescu, an equity analyst at BNP Paribas, believes this move recalls Nike's failed decision in North America to end partnerships with wholesalers, which led to the loss of its dominant market position and a sharp decline in both revenue and profit margins.