Nike announced plans to cut off thousands of online distributors in China starting January as part of a strategy to streamline its digital presence and improve the consumer experience. The company will concentrate its online sales through its official website, app, and flagship storefronts on China’s leading platforms like Tmall, JD.com, and Douyin. This shift comes amid recognition that the current sprawling network of third-party sellers and brick-and-mortar partners’ online stores has led to inconsistent branding and pricing, which has hindered Nike’s efforts to reverse a sales decline in the region.

The revamp aims to create a more cohesive and premium shopping environment, focusing on stronger storytelling and clearer product presentation through these flagship platforms. Cathy Sparks, Nike’s vice president and general manager of Greater China, emphasized that the move is about reducing market fragmentation rather than limiting access for consumers. Nike intends to maintain relationships with existing distributors, encouraging them to strengthen their physical retail presence even as their online operations are scaled back.

Despite the strategic intention to foster a healthier and more sustainable market ecosystem, investors and analysts have expressed concerns about the potential revenue impact of this decision. BNP Paribas analyst Laurent Vasilescu compared the approach to Nike’s problematic attempt to reduce wholesalers in North America, which resulted in loss of market share and sales declines. Such parallels raise worries that Nike might face similar setbacks in China, a market where revenue has shrunk approximately 30% over the past five years.

Nike’s largest distributor in mainland China, Topsports, voiced support for the company’s direction despite anticipating short-term business pressures. Topsports CEO Yu Wu highlighted a long-standing partnership and expressed confidence that the refocus on offline retail and enhanced consumer engagement through new retail concepts would yield long-term benefits. This collaboration reflects Nike’s broader efforts to balance its digital and physical retail strategies while aiming to improve both consumer experience and overall market health in China.