Recently, sportswear giant Nike's online sales channel adjustment plan has sent shockwaves through the industry:
Starting January 1, 2027, Nike will fully terminate online first-tier distributor authorizations in mainland China. This includes major domestic distributors such as Top Sports and Baosheng International.
What strategic considerations lie behind Nike's decision to reclaim online distribution rights? How will the structure of the domestic sports retail market be reshaped? And for everyday consumers who buy sneakers online, what changes in price, channels, and promotions can they expect? A series of questions have emerged.
01
Nike bringing online sales in-house,
what are the pros and cons for the brand?
At present, Nike has seen year-on-year revenue declines in Greater China for eight consecutive quarters, with full-year revenue of $5.847 billion, down 11%, and fourth-quarter revenue of $1.297 billion, down 12%.
Why would Nike risk further short-term revenue declines and decisively cut off online distributors? The core reason is: an out-of-control pricing system is seriously eroding brand value.
In recent years, as China's e-commerce has entered a saturated market, channel fragmentation has led to severe internal competition. First-tier distributors, second-tier distributors, and small sellers frequently engage in online price wars to grab traffic and quickly recover cash.
Nike's once proud “hot-selling models” and “limited editions” have even seen instances of being sold below launch price in the secondary market immediately after release, and many classic models have become regulars in discount sections.
By bringing online channels under official control, Nike hopes to:
Reclaim pricing control. Standardize online platform pricing to curb dealers' low-price dumping that erodes brand image and to improve margins;
Improve consumer experience. Reduce information confusion caused by fragmented channels, and provide clearer product presentation, a more consistent brand story, and a more coherent customer journey in official flagship stores;
Accurate data insights. Customer purchase data can be consolidated into the brand's own systems to enable precision marketing and private-domain new product operations.
But the risks are also prominent:
Previously, distributors such as Top Sports and Baosheng International handled large volumes of inventory clearance, platform operations, and after-sales logistics; now all of this will be taken on by the brand itself, meaning Nike's operating costs will rise significantly.
Secondly, with many brands on the rise, the online traffic Nike voluntarily gives up could very quickly be filled by competitors.
Also, by severing online business with long-term core distributors, if offline cooperation isn't properly coordinated, could that drag down the sales performance of brick-and-mortar stores?
Nike's restructuring of online sales channels is far from a single-brand internal adjustment; the entire sports apparel retail industry chain will experience a chain reaction, the original balance of the domestic sports retail market will be disrupted, and the industry ecosystem will face a new round of reshuffling.
02
Distributors' "growing pains" and transformation:
From "sales machines" to "localized operators"
For leading distributors such as Top Sports and Baosheng International, Nike reclaiming online distribution rights is undoubtedly a painful blow. So how will the structure of the domestic sports retail industry change?
Nike's share of total sales
- Topsports International
The main brands (Nike + Adidas) account for 86.7% of revenue (FY2025/26, disclosed officially); other brands account for only 12.6%. The company does not break down the two brands separately; based on historical proportions in the prospectus, Nike is estimated to account for about 55%–60% of total revenue, and Adidas about 25%–30%. - Pou Sheng International
The company discloses thatthe top five brands account for over 90% of revenue, and the top two brands Nike + Adidas together account for 75%–80%. We estimate Nike is about half, Adidas about a quarter, with the rest being PUMA, Skechers, Converse, etc.
Online/Offline Mix
- Topsports
Online accounts for about 35%–40% (latest retail-caliber figure around 40%), and offline about 60%–65%. Of that,Nike products sold online account for about 22% of total revenue — this is the key figure announced today, meaning more than half of its online business is Nike. From 2027 this will be eliminated, hence the stock plunged 23%. - Pou Sheng
Online (digital sales) accounts for over 30% of total revenue, with offline nearly 70%. Of that,Nike online sales account for about 15% of total revenue, but the company emphasizes that this profit contribution is "negligible" (online Nike largely used for discounted inventory clearance), so the stock fell less (-10%).
For a long time, large distributors have been deeply tied to Nike. The end of online authorization means distributors will directly lose a huge slice of revenue, and will have to rebuild their e-commerce presence.
But in the long run, this may force distributors to transform; they must re-evaluate the value of their offline stores. Similarly,domestic brands’ offline stores and online distribution channels may see a window of expansion.
For example, previously Nike was Topsports’ revenue pillar. After the online business is stripped away, will Topsports proactively tilt resources to support other sports brands to fill the revenue gap? In recent years Topsports has introduced several niche brands — can they grow that business?
Topsports CEO Yu Wu said: "Although there is short-term pressure, in the medium to long term this direction helps drive China’s retail ecosystem toward a healthier, more orderly development."
In the future, a distributor’s competitiveness may no longer depend solely on the number of stores, but on whether it can continuously create value in specific commercial districts and communities that digital platforms cannot replace.
Of course, changes in brand markets will ultimately affect every ordinary consumer.
03
Mass Consumers
Farewell to "price-comparing across the whole web", return to product experience
For consumers, the most direct change will be the shopping experience.
The space for price comparison will shrink significantly. Previously consumers could horizontally compare prices across distributors like Topsports, waiting for big promotions and large discounts.
Purchasing channels will become more singular,and the convenience of selection will fall accordingly. In 2027, Nike online will only be available through official channels, with unified pricing across platforms. Large-scale clearance at low prices and cross-store price wars will essentially disappear, making it much harder to buy new sneakers at a bargain.
How will Dewu sell products? I'm curious. But since most sellers there are individuals, it probably won't be much affected.
Previously, stock and styles varied across multiple online platforms; going forward only official stores will sell them. Some niche colorways and discounted out-of-stock sizes will be greatly reduced, and the online channels for finding bargains will no longer exist.
Authenticity guaranteed, decision costs reduced. Consumers will no longer need to spend a lot of time verifying store authenticity or comparing different stores’ return policies; official flagship stores will provide unified pre- and after-sales service.
The offline in-store experience returns. Distributors’ offline stores will still be able to sell Nike products normally, and it’s likely they will invest more effort into upgrading their physical stores.
From brand strategy and the domestic sports market landscape to the mass consumer experience, the chain reaction from Nike reclaiming online distribution rights in China is already clear.
Will consumers gradually accept a unified pricing online model, or will they instead embrace domestic sports brands? What will be the ultimate outcome of this sales-channel transformation? Time will tell.
[End-of-article interaction]
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Text/Editor: MP
Image source: Paoye Dabaozha
Visuals: Max
