Nike stock in focus: why is it cutting thousands of China sellers?

Nike is tightening online sales in China as it tries to restore pricing power and reverse a deepening decline in its third-largest market.

From January 2027, most of Nike’s 16 major Chinese retail partners will stop selling its products online and focus on physical stores.

Those partners operate thousands of Nike outlets, but the company is not cutting off thousands of separate distributors.

Digital sales will instead move through Nike-branded storefronts on Tmall, JD.com and Douyin, alongside its website and app.

The strategy could reduce discounting and improve control over customer data and presentation.

Greater China sales fell 17% on a constant-currency basis in the latest quarter, underscoring that tighter distribution must be matched by stronger product demand to revive the business.

Nike stock NYSE:NKE closed 1.2% lower at $42.96 on Tuesday, reflecting continued investor caution over the pace of its turnaround.

Nike wants control of its online brand

Nike believes its Chinese digital marketplace has become fragmented, with products sold by multiple retailers at different prices.

“Our marketplace has become so fragmented and cluttered,” Greater China chief Cathy Sparks told Reuters.

She said consumers wanted an experience that was premium and trustworthy.

By concentrating e-commerce through official storefronts, Nike can coordinate launches, reduce competition between sellers and encourage full-price purchases.

Retail partners will continue operating physical stores, so the overhaul is not a complete retreat from wholesale.

The disruption for partners could be considerable, as Topsports, which generates 22% of its revenue from online Nike sales, warned of a significant short-term impact.

Shares in Topsports and fellow distributor Pou Sheng fell sharply after the plan was confirmed.

For Nike, the trade-off is to sacrifice some reach for tighter control over pricing and inventory.

China’s slump demands more than distribution changes

Nike is taking the risk because its China recovery continues to disappoint. The latest 17% sales decline worsened from a 10% fall in the previous quarter, while Anta and Li Ning gained share.

On and Hoka have also captured demand in performance running and faster-growing categories.

Excessive discounting is only part of the problem. Chinese shoppers have more credible choices, while rivals have often moved faster on local preferences and performance products.

Nike has appointed a vice-president of local product creation in Greater China, signalling that management recognises the need for market-specific products.

“The Nike turnaround is progressing slowly,” Telsey Advisory Group analyst Cristina Fernandez told Reuters.

She said weakness in sportswear and international markets was unlikely to reverse meaningfully before fiscal 2028.

Jefferies analysts similarly said sportswear and Jordan streetwear remained an overhang, although Nike’s core business was stabilising.