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Nike Cuts Thousands of China Online Sellers as It Shifts Sales to Official Channels
Nike will rely more on its own website, app and official storefronts as it tries to restore growth and tighten pricing control in China.
Nike will cut off thousands of third-party online distributors in China starting in January, shifting digital sales exclusively to its official website, app, and platforms including Tmall and Douyin.
Greater China's market has shrunk about 30% over the last five years, prompting Nike to consolidate digital sales and reverse inconsistent branding and pricing that has hampered efforts to rebuild shopper trust.
Topsports, Nike's largest distributor in China, expects "significant" short-term pressure as online sales account for 22 per cent of its revenue, though the retailer remains committed to working with Nike on offline arrangements.
BNP Paribas analyst Laurent Vasilescu labeled the move a "strategic misstep," warning it mirrors Nike's past decision to cut wholesalers in North America and arguing the company faces a "product problem" rather than a distribution issue.
Nike has appointed a new vice president of local product creation for Greater China to combat domestic rivals like Anta and Ning by prioritizing products tailored for local consumer tastes.
Nike closed online sales through its existing distributors in China, while the U.S. sports manufacturer promotes a restructuring in its operations to revitalize sales in the face of fierce competition from local rivals. Exclusive material for subscribers. To have full access, access the material link and register.