Nike China sales decline deepens as local rivals gain ground
Nike's China revenue is down 30% since 2021 as domestic brands, China Chic and distribution changes pressure its turnaround.
By Sofia Marchetti · World Affairs Correspondent
3 min read
Nike's China sales decline has turned one of the company's former growth engines into a drag on its broader turnaround. CNBC reported that Nike's business in China has shrunk 30% since 2021, with annual revenue at the end of May falling to its lowest level in eight years.
The drop has come despite a stronger sportswear market in China. GlobalData said China's sportswear market grew 51% over the past five years, helped by rising interest in health, sports and exercise.
Company reports cited by CNBC show Nike's China revenue peaked at $8.3 billion in fiscal 2021, then fell to $5.8 billion in fiscal 2026. Quarterly sales in the region have declined from a year earlier for eight straight quarters, according to CNBC.
Why are Nike China sales declining?
Analysts and consultants told CNBC that Nike is facing several problems at once: stronger Chinese competitors, a shift toward domestic brands known as “China Chic,” younger shoppers' changing tastes and a distribution system that became too reliant on discounts and fragmented online sales.
Yaling Jiang, founder of consumer research firm ApertureChina, told CNBC that Nike has lost some pull with younger Chinese consumers, while Adidas has generated attention with locally resonant products such as pet apparel, pet jerseys and China-themed jackets. Tracy Dai, director of operations at China Skinny, said high school-age shoppers who once favored Nike or Adidas are now more likely to name Anta or Li-Ning.
The China Chic movement, also known as Guochao, encourages pride in Chinese-made and Chinese-designed goods. CNBC reported that the trend gained added force after a 2021 backlash against Western brands, including Nike, over statements about forced labor concerns in Xinjiang.
Domestic brands have also improved their products and marketing. Wei Kan, who previously worked at Nike and Converse in China and Taiwan and now runs Conduit Asia, told CNBC that Chinese consumers have become more selective and are weighing product value and innovation more heavily than brand image.
What Nike says it is changing
Nike disputes the idea that it has lost cultural relevance in China. A company spokesperson told CNBC that younger consumers want more local connections through events, products and cultural moments, and said Nike's reset gives it a path to win back shoppers.
Cathy Sparks, Nike's vice president and general manager of Greater China, told CNBC that Chinese consumers have changed and expect stronger product connections and brand engagement. She said Nike can improve full-price sales by designing footwear and apparel for the specific needs of Chinese consumers.
Nike has hired its first Greater China vice president of local product creation, CNBC reported. The company plans two lifestyle capsules for the holiday period, one for Nike sportswear and one for Jordan streetwear, followed later by performance apparel and footwear.
Sparks also said Nike is trying to clean up its distribution network. During the Covid-19 pandemic, the company allowed physical-store distributors to sell online even though their agreements did not include digital sales, CNBC reported.
BNP Paribas equity analyst Laurent Vasilescu estimated that shutting down those online storefronts could cut Nike's annual revenue by as much as $1 billion, or about 17% of regional sales, according to CNBC. Sparks told CNBC some distribution will disappear, but Nike expects to replace it with more full-price sales and a more premium consumer experience.
This story draws on original reporting from CNBC.