Nike is taking decisive action in the Chinese market.

Before the market opened on July 22nd, Topsports announced it had received formal notification from Nike that its online platform sales of Nike products in mainland China will be completely terminated starting January 1, 2027.

This business accounted for approximately 22% of Topsports' total revenue in the last fiscal year. Based on its revenue of 257.4 billion yuan, the related scale is about 56.6 billion yuan. Topsports anticipates this adjustment will have a significant negative impact on its business in the short term.

Terminating the authorization for Topsports is just the first step in Nike's restructuring of its Chinese market.

In a recent signed article, Shen Kaixi, Vice President of Nike Group and General Manager of Greater China, stated that starting in January 2027, Nike will restructure its digital channels in China, centering on its Tmall, JD.com, and Douyin official flagship stores, as well as the Nike official website and app. Apart from a few authorized partners, other partner-operated online stores will gradually cease selling Nike products.

A Nike spokesperson further clarified to Reuters that the company has a total of 16 store partners in China, collectively operating thousands of Nike stores, the majority of which will stop online sales.

This represents a clear move to consolidate channel control.

Since the pandemic, Nike and its distributors have accelerated their shift online. The rapidly expanding store and distribution network boosted sales volume but also led to increasing disorder in pricing and brand presentation.

Large distributors leveraged their purchasing and rebate advantages to expand online sales, and under inventory pressure, resorted to discounts to accelerate turnover. Platform subsidies, livestream promotions, and distributor clearance sales overlapped, creating significant price discrepancies for the same product across different stores. Consumers have also become increasingly accustomed to waiting for discounts.

Shen Kaixi admitted that Nike's market presentation in China had become "too fragmented," and that some previous initiatives had resulted in inconsistent and less credible consumer experiences, failing to achieve the expected growth.

Nike hopes to regain control over new product launches, discount timing, brand storytelling, and membership management by unifying the official entry points. Shen Kaixi told Reuters this move aims to rebuild consumer trust and increase full-price sales.

Nike's decision to act now is related to ongoing pressure in the Chinese market.

For the fourth quarter of fiscal year 2026, ending May 31, 2026, Nike's Greater China revenue, on a currency-neutral basis, fell by 17%, a larger decline compared to the 10% drop in the previous quarter.

However, while consolidating channel control can reduce price wars, it does not directly create demand. In the view of some analysts, the issue Nike faces in China is not just an overly fragmented distribution system; the more critical problem is insufficient product appeal.

Therefore, while restructuring its online channels, Nike has chosen to accelerate localization in both product and retail.

Shen Kaixi revealed that Nike recently appointed its first-ever local Vice President of Product Innovation for Greater China, responsible for designing, developing, and manufacturing products in China for Chinese consumers.

This signifies that Nike's localization efforts will extend beyond Lunar New Year colorways, regional marketing, and athlete partnerships, moving further into the realms of product definition and development.

Over the past six months, Nike has launched new concept stores in China, such as ACG Basecamp and ROOKIE Kids, and upgraded its Shanghai House of Innovation flagship store.

In the next six months, the company will also introduce new retail concepts led by local teams, strengthening investments in local events and regional teams.

Nike has not completely severed ties with its distributors. Nike and Jordan physical stores remain the core venues for brand experience, and partners like Topsports will continue to handle offline operations, local services, and city-wide coverage.

Nike has already reclaimed the initiative on pricing and brand presentation. However, whether it can truly regain market share ultimately depends on whether, following the acceleration of localization, it can launch products that Chinese consumers are willing to buy.