Nike is reportedly planning to stop allowing its Chinese distributors from selling its products online as of January 2027, aiming to drive consumers directly to Nike’s digital storefronts for better control over pricing and inventory. This move follows a 10% sales decline in China reported in Nike's April earnings. However, several industry analysts from Jefferies, Bernstein SG, Deutsche Bank, and BNP Paribas have expressed skepticism, warning that the strategy could lead to significant sales losses and hinder Nike’s market position in China.

Analysts highlight that Nike’s issues in China stem more from product appeal rather than sales channels. BNP Paribas’ Laurent Vasilescu criticized the move as misaligned, noting that Nike is losing ground to domestic brands like Anta and Li-Ning, as well as competitors like Lululemon and On. The strength of Chinese e-commerce lies in its dynamic and fast-paced discount and livestream sales facilitated by distributors, which Nike’s digital storefronts may struggle to replicate, putting the brand at risk of losing market share if online sales through partners like Topsports and Pou Sheng are restricted.

If Nike enforces this shift, the financial impact could be severe, with BNP estimating potential losses to reach up to $1 billion in sales. Nike’s key distributor Topsports, which derives about 22% of its revenue from Nike products, has not received official notice but has faced a significant stock drop following rumors of the change. Nike remains silent on the report, which, coupled with Topsports’ lack of denial, heightens concerns about the validity and market consequences of the rumored strategy.

Nike’s challenges extend beyond China, as the company continues a slow, ongoing turnaround under CEO Elliott Hill. Despite efforts such as inventory control and product portfolio adjustments, Nike’s shares are down 36% year-to-date, and operational changes like CFO Matthew Friend’s unexpected departure signal potential revisions to financial guidance. The China e-commerce gamble appears to be a high-risk decision amid a broader context of uncertainty as Nike seeks to reclaim growth momentum globally.