Summary of Key Points
Nike plans to end its online cooperation with distributors such as Taobao and Baosheng in January next year, which will prompt these distributors to quickly clear their inventory. As a result, consumers may be able to find Nike/Converse products at lower prices in the coming months. Meanwhile, Nike’s revenue in the Chinese market has been declining for eight consecutive quarters, and its Converse brand has also experienced three consecutive quarters of decline. There are rumors that Nike might sell off Converse to reduce its financial burden.
Detailed Analysis
1. Will there be cheap Nike products available in the future?
There is a chance, but prices won’t be extremely low. Distributors like Taobao and Baosheng account for a significant portion of Nike’s online sales (22% and 15%, respectively), and they have accumulated a lot of old inventory that needs to be sold off. Recently, Converse backpacks were offered at a 40% discount on Taobao’s mini-program, indicating an effort to clear inventory. However, industry insiders say that there won’t be a large-scale sale: firstly, because the distributors and Nike still have offline partnerships, and drastic discounts could damage the brand image; secondly, Nike doesn’t allow such behavior that could harm the brand. Therefore, discounts will be applied in phases, and consumers can occasionally take advantage of sales on e-commerce platforms (such as Taobao or Baosheng’s online stores), but don’t expect prices to plummet.
2. Why is Nike suddenly ending its online cooperation?
The previous model was inefficient. To keep up with the rapid development of China’s e-commerce market, Nike granted distributors the right to operate their own online stores and allowed secondary resellers to sell products. While this approach helped Nike reach more consumers, it led to issues such as inconsistent prices across different stores (the same shoe might be sold at 50% off at one store and 70% off at another) and a poor shopping experience for customers. With increased competition from domestic brands, this decentralized model has become a bottleneck. Hence, Nike is reasserting its control over online sales and reorganizing its distribution channels.
3. Is Nike struggling to sell products in China?
Nike’s performance in China is disappointing: revenue for the fiscal year 2026 was $5.847 billion, a 11% decrease from the previous year; quarterly revenue in the fourth quarter was $1.297 billion, a 12% decline. More seriously, revenue has been declining for eight consecutive quarters since the first quarter of fiscal year 2025. This suggests that Chinese consumers are becoming less interested in Nike products—perhaps due to the growing popularity of domestic brands like Li Ning and Anta, or because Nike’s design and marketing strategies have not adapted to changes in the Chinese market.
4. Could Converse be sold off?
Converse, as a subsidiary of Nike, has been underperforming for the past three years, with revenue declining by 14% in fiscal year 2024, 17% in fiscal year 2025, and a staggering 31% last year (only $1.2 billion in sales). Converse is currently undergoing restructuring, with the CEO requiring employees to work from home while planning strategic adjustments. There are rumors that Nike might sell off Converse to reduce its financial burden. After all, Nike has already laid off 775 employees and consolidated its distribution centers, indicating efforts to cut costs. Selling a less profitable brand would make sense.
Conclusion
Nike is facing challenges in the Chinese market: it needs to revamp its online channels, address declining market share, and deal with underperforming brands like Converse. For consumers, there may be some short-term opportunities to buy products at lower prices; however, for Nike, there are many significant issues to overcome, such as how to win back consumer trust and how to manage its struggling brands effectively.