Nike overhauls China strategy with plans to cut thousands of online sellers

Nike (NKE) announced Tuesday that it will cut ties with thousands of online distributors in China starting in January. The move is aimed at tidying up its fragmented digital marketplace and restoring sales growth in the region.

Starting next year, Nike’s (NKE) online footprint will shift primarily to the retailer’s official website and app and the storefronts it operates on Tmall, JD.com (JD), and Douyin, some of China’s largest online marketplaces and social platforms.

“These new flagships will serve as the single, elevated destination for Nike within these ecosystems, with clearer product presentation, stronger storytelling and more connected consumer journeys,” Cathy Sparks, Nike’s new vice president and general manager of Greater China, wrote in a letter.

“This is about strengthening the platforms where consumers already begin and end their shopping journey, making sure those experiences are direct, consistent and unmistakably Nike.”

“This is not about reducing access. It is about reducing fragmentation and strengthening the consumer journey,” she said. “When the experience is consistent, the brand becomes stronger.”

The change is also expected to hurt Nike’s brick-and-mortar partners in the region, which have expanded their online presence recently to grow their businesses.

Yet, Topsports, Nike’s largest distributor in mainland China, said it supports the company’s decision.

“This adjustment will bring some short-term pressure to our business. But we firmly believe that, over the medium- to long-term, this direction will help promote a healthier, more orderly, and more sustainable retail ecosystem in China, while further improving consumer experience and product appeal,” Topsports CEO Yu Wu said in a statement.

“Looking ahead, we will continue to work closely with Nike, leveraging our strengths in offline retail operations, local consumer service, and deep market development across city tiers,” Wu said.