Nike Cuts Thousands of Online Distributors in China

Starting January 1, 2027, Nike Inc. will sever ties with thousands of online distributors in China and restrict wholesale partners from selling its products via digital platforms. The company intends to consolidate its digital presence by directing shoppers toward its own website, mobile apps, and official flagship storefronts on Tmall, JD.com, and Douyin. This strategy aims to eliminate inconsistent pricing and resolve a fragmented retail environment that has seen Nike revenue in Greater China drop 17% in the most recent fiscal quarter.

The move follows eight consecutive quarters of revenue decline for Nike in China, while competitors like Adidas have reported regional growth. To support this turnaround, the company is also appointing a vice president of local product creation to increase regional relevance.

The announcement triggered immediate financial volatility for retail partners. Topsports International Holdings, Nike's largest distributor in mainland China, saw its shares drop 23% in Hong Kong trading, as online Nike sales previously accounted for roughly 22% of its total revenue. Pou Sheng International shares also fell 10%. While Topsports expressed commitment to working with Nike on offline arrangements, analysts from BNP Paribas labeled the shift a strategic misstep, suggesting Nike faces a product problem rather than a distribution issue and could lose between $500 million and $1 billion in sales.