Nike to narrow China online sales to official channels
Nike says it will drop thousands of online sellers in China as it tries to make pricing and branding more consistent across major platforms.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Nike plans to stop using thousands of online distributors in China starting in January, a shift aimed at tightening control over how its products are sold in one of its most important markets. The company said Tuesday the move is meant to reduce a fragmented digital sales network and help restore growth in the region.
Under the new structure, Nike said its online sales in China will be centered on its own website and app, along with official storefronts it runs on Tmall, JD.com and Douyin. Those platforms are among China’s largest e-commerce and social shopping channels.
CNBC reported that Chinese shoppers can currently find Nike products not only through those official outlets, but also through thousands of online stores tied to the company’s physical retail partners and a broader group of secondary distributors. That reach has made Nike products widely available, but the company says it has also produced uneven pricing and branding online.
Nike says it wants a cleaner digital setup
Cathy Sparks, Nike’s new vice president and general manager for Greater China, described the plan in a letter as an effort to make Nike’s presence on major platforms more focused and consistent. She said Nike wants consumers to encounter clearer product displays and a more connected shopping experience on the sites where they already start and finish purchases.
Sparks said the change is aimed at reducing fragmentation rather than limiting consumer access. Nike’s goal, according to the company, is to strengthen the brand experience and regain more control over pricing across digital channels.
The strategy carries risk. CNBC reported that the move could weigh on revenue in Greater China, where Nike’s business has fallen about 30% over the past five years. Online distributors and store partners have become part of the company’s sales base, and removing many of those outlets could create a short-term hit.
Analysts warn of echoes from North America
The China plan first surfaced late last month in a local Chinese media report, according to CNBC. After that report, BNP Paribas equity analyst Laurent Vasilescu compared the strategy with Nike’s earlier pullback from wholesalers in North America.
Vasilescu wrote that Nike’s North American shift created shelf space for rivals and was followed by weaker sales, margins and market position, according to CNBC. He said BNP Paribas kept its underperform rating on Nike and argued that the company’s bigger issue is product appeal rather than distributor structure.
The change is also expected to pressure Nike’s brick-and-mortar partners in China, CNBC reported. Many of those companies have built online operations in recent years to support their own growth.
Topsports, Nike’s largest distributor in mainland China, said it supports the adjustment despite near-term strain. CEO Yu Wu said Topsports has worked with Nike for 27 years and expects the shift to support a more orderly retail market over the medium and long term.
Wu said Topsports will continue working with Nike through physical stores, local consumer service and retail development across different city tiers in China. He pointed to new sport-store concepts and higher-quality in-store experiences as areas where the distributor plans to focus.
This story draws on original reporting from CNBC.