In recentdays, the sports apparel 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 Topsports and Baosheng International.
What strategic considerations lie behind Nike's retrieval of online distribution rights? How will the domestic sports retail market be reshuffled? What changes will everyday online sneaker shoppers see in price, channels, and promotions? A series of questions has surfaced.
01
Nike's direct-operated online sales channels,
what are the pros and cons for the brand itself?
Currently, Nike has recorded year-on-year revenue declines in Greater China for eight consecutive quarters, with annual revenue of $5.847 billion, down 11%, and fourth-quarter revenue of $1.297 billion, down 12%.
Why is Nike willing to risk further short-term revenue declines to 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 market has entered a phase of stock competition, channel fragmentation has led to intense internal competition. First-tier distributors, second-tier distributors, and small-to-medium sellers have frequently waged online price wars to grab traffic and quickly recoup cash.
What Nike once proudly touted—“best-sellers”and“limited editions”have even experienced the phenomenon of immediately after launch, on the secondary market,“selling below retail,”and many classic shoe models have become regulars in discount sections.
By bringing online channels back under official control, Nike hopes to:
reclaim pricing controlUnify online platform pricing, curb dealers' low-price dumping that erodes brand image, and improve profit margins;
Optimize the consumer experience。Reduce the information confusion caused by channel fragmentation by offering clearer product displays, a more consistent brand story, and a more coherent consumer journey in the official flagship store;
Accurate data insights。User purchasing data can be consolidated into the brand’s own system, enabling targeted marketing and private‑domain operations for new products.
But the risks are equally prominent:
In the past, distributors such as Topsports and Pou Sheng International handled large volumes of inventory clearance, platform operations, and after‑sales logistics; now these responsibilities are all assumed by the brand itself, which means Nike’s operating costs will rise significantly.
Furthermore, with many brands on the rise, the online traffic Nike voluntarily relinquishes is highly likely to be quickly filled by competitors.
Moreover, severing online business from long‑time core distributors—if offline cooperation is not properly coordinated—could it drag down the sales performance of brick‑and‑mortar stores?
Nike’s reconstruction of online sales channels is far from a single‑brand internal adjustment; the entire sports apparel retail value chain will experience chain reactions, the existing balance of the domestic sports retail market will be disrupted, and the industry ecosystem will enter a new round of reshuffling.
02
Distributors’ “growing pains” and transformation:
From “sales machines” to “localized operators”
For leading distributors such as Topsports and Pou Sheng International, Nike reclaiming online distribution rights is undoubtedly a painful blow — so what structural changes will occur across the domestic sports retail industry?
Nike’s share of total sales
- Topsports International
Core brands (Nike + Adidas) together account for revenue86.7%(FY2025/26, officially disclosed), other brands account for only 12.6%. The company does not separately break out the two brands; based on historical proportions in the prospectus, Nike accounts for approximately 55%–60% of total revenue, Adidas about 25%–30%. - Pou Sheng International
The company’s reported metric isThe top five brands account for over 90% of revenue; the top two brands, Nike + Adidas, together account for 75%–80%，estimated Nike accounts for about half, Adidas about one quarter, with the remainder being PUMA, Skechers, Converse, etc.
Online/offline structure
- Topsports
Online accounts for about35%–40%(about 40% by the latest retail metric), offline about 60%–65%. Among theseOnline sales of Nike products account for about 22% of total revenue—this is the key figure in today's announcement: it means more than half of its online business is Nike, which will be reduced to zero starting in 2027, hence the share price plunged 23%. - Baosheng
Online (digital sales) account forover 30%, offline nearly 70%. Among theseNike online sales account for about 15% of total revenue, but the company stresses that this profit contribution is "negligible" (online Nike sales are mainly discount-driven inventory clearance), so the stock fell less (-10%).
For a long time large distributors have been tightly bound with Nike. The end of online authorization means distributors will directly lose a large chunk of revenue, and their e-commerce plans must be rebuilt.
But in the long term, this may force distributors to transform; they must reassess the value of their offline stores. Likewise,Domestic brands' offline stores and online distribution channels may see a window for expansion.
For example, Nike used to be 滔搏's revenue pillar—after the online business is stripped away, will 滔搏 proactively shift resources to support other sports brands to fill the revenuegap? In recent years 滔搏 has introduced several niche brands—can it grow that slice of the pie.
TOPSPORTSCEO Yu Wu said: "Although there will be short-term pressure, in the mid-to-long term this direction helps drive the Chinese retail ecosystem toward healthier, more orderly development."
Going forward, a distributor's competitiveness may no longer rest solely on store count, but on whether it can consistently create value in specific commercial districts and communities that digital platforms cannot easily replace.
Of course, changes in a brand’s market strategy ultimately affect every ordinary consumer.
03
Everyday consumers
Saying goodbye to “compare prices across the whole web” and returning to product experience
For consumers, the most immediate change is the shopping experience.
Significantly reduced room for price comparisonPreviously, consumers could compare prices across multiple retailers such as Topsports, wait for big promotions, and score large discounts.
Purchasing channels becoming more singularized,and the convenience of shopping has declined accordingly.In 2027, Nike’s online presence is limited to official channels only, with uniform pricing across all platforms. Large-scale clearance sales and cross-store price wars have basically disappeared, making it much harder to pick up new sneaker releases at low prices.
How will Dewu (Poizon) sell goods under this change? It’s an interesting question. But since most sellers there are individual sellers, it probably won’t be greatly affected.
In the past, stock and style assortments differed across multiple online stores; with only official stores to buy from going forward, some niche colorways and discounted odd-size deals will be greatly reduced, and online bargain-hunting channels will no longer exist.
Authenticity guaranteed, decision costs loweredConsumers will no longer need to spend large amounts of time verifying a store’s legitimacy or comparing different stores’ return and exchange policies—official flagship stores will provide uniform pre- and after-sales service.
A return to offline brick-and-mortar experiences. Distributor physical stores will still be able to sell Nike products normally, and they are likely to invest more effort into upgrading their in-store experience.
From brand strategy and the domestic sports market structure to mass consumer experience, the chain reaction from Nike reclaiming online distribution rights has already become clearly apparent.
Will consumers gradually accept a unified online pricing model, or turn to domestic sports brands? What will be the final outcome of this sales-channel transformation? Only time will tell.
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Text/Editor: MP
Image source: Paoye Dabaozha
Visual: Max
