Nike Will Cut Off Thousands of Chinese Online Retailers Starting in January

Nike confirmed this week it will cut off thousands of online distributors in China starting in January, betting that a tighter grip on where and how its shoes get sold online can finally reverse a sales slide that's dragged on for years.

The plan, detailed by Cathy Sparks, Nike's vice president and general manager of Greater China, will push nearly all online sales toward Nike's own website and app, plus official Nike storefronts on Tmall, JD.com and Douyin. Everyone else, including thousands of secondary sellers and the online arms of Nike's brick-and-mortar retail partners, gets cut loose from online selling and pushed back to physical stores.

"Our marketplace has become so fragmented and cluttered," Sparks told Reuters. "What consumers want is an experience that's premium, true to the brand, trustworthy, and certainly connected between digital and physical."

Sparks, a 25-year Nike veteran who took over Greater China earlier this year, framed this as an experience fix, not a retreat. "This is not about reducing access," she wrote in a letter to partners, according to CNBC. "It is about reducing fragmentation and strengthening the consumer journey."

Why Nike says it has to do this

Right now, Chinese shoppers can buy Nike gear through official channels and through a sprawling web of secondary distributors and retail-partner storefronts. That's created wildly inconsistent pricing and branding online, according to CNBC, and it's made it nearly impossible for Nike to sell at full price when a dozen different sellers are undercutting each other on the same product.

The numbers explain the urgency. Greater China sales fell 17% on a constant-currency basis in Nike's fiscal fourth quarter, according to Reuters, worse than the 10% decline the quarter before. Nike's digital business in China dropped 25% year-over-year in that same quarter, according to 36Kr, dragging total direct-to-consumer revenue down 17%, while physical DTC stores fell 9% too.

Nike itself has pointed to the online price wars as the culprit. Management said sustained discounting and price competition in China are eating into profitability, according to 36Kr's reporting on the company's earnings call.

Domestic rivals Anta and Li Ning have been eating Nike's lunch in China, and foreign challengers like On and Hoka are grabbing share too, according to Reuters. Greater China sales have shrunk roughly 30% over the last five years, per CNBC.

The counterargument: this already blew up once

BNP Paribas analyst Laurent Vasilescu isn't buying the turnaround logic, and he's got history on his side. Nike tried something similar in North America years ago, cutting off wholesale partners to push consumers toward its own stores and app. That decision opened shelf space for Adidas, On, Hoka and others, and it took Nike years and a change in leadership to walk it back.

"This strategy opened up shelf space for competitors and the strategy ended poorly for Nike," Vasilescu wrote, according to CNBC. "We believe the same could happen if it takes the same approach in China." His firm has an underperform rating on Nike stock.

Vasilescu's sharper point, echoed in Reuters' reporting: "Nike doesn't have a distribution problem in China and elsewhere. It has a product problem." That's a real critique worth sitting with. If Chinese consumers are buying Anta and Li Ning because those brands make products that fit local tastes better, no amount of channel cleanup fixes that. Sparks acknowledged as much, telling Reuters that Nike has appointed a vice president of local product creation for Greater China specifically to address it.

Who gets hurt

Nike's brick-and-mortar retail partners in China, which run thousands of physical Nike stores, will lose their online sales channel entirely under this plan, a Nike spokesperson confirmed to Reuters. That's a meaningful hit. Topsports, one of Nike's largest partners, reported that online sales made up about 22% of its total revenue in the fiscal year ending February 2026, according to 36Kr. When news of the restructuring leaked in Chinese media last month, Topsports didn't deny it, saying only it "has not yet received official notification from Nike" while confirming ongoing talks over online sales arrangements.

36Kr reported that if fully carried out, the overhaul could touch roughly $1 billion of Nike's wholesale business in China, about 17% of the region's total revenue last fiscal year.

Nike CEO Elliott Hill dodged direct questions about the restructuring on the company's fiscal fourth-quarter earnings call, saying only that "success in the China market requires deeper local partnerships," according to 36Kr. A person close to the company told 36Kr the restructuring is "basically true" and that Nike has braced internally for pain, with a real recovery possibly not landing until 2027 or 2028.

Short-term disruption to its retail partners and possibly its own China revenue could give Nike pricing control and a cleaner brand experience down the line. Whether Chinese consumers actually want that experience, or whether they'll just keep buying Anta and Li Ning regardless of how tidy Nike's app looks, is the question nobody in this story has answered yet.