Nike Changes Sales Strategy in China

Nike is reducing sales in China through partner companies. The company's goal is to limit frequent discounts, strengthen brand positioning, and increase profits from sales. Due to these changes, Nike may lose approximately 1 billion dollars in revenue.

According to Bernstein analysts' estimates, Nike's operating profit margin in China will grow to 24% for the 2027 fiscal year. From January 2027, Nike products will be sold online only on the company's official website, application, and official stores on Tmall, JD.com, and Douyin.

The company is ending collaboration with online retailers that offered products to consumers at significant discounts. Nike believes this practice has damaged the brand's image and contributed to the growth of unauthorized sales.

According to analysts, the new model will increase profits, but fully recovering lost sales will be difficult. Some consumers focused on low prices may turn to Adidas or local brands, Anta and Li Ning.

Nike's market share in China has decreased from 27% to 16% since 2020. According to Bernstein's estimates, the company's position will gradually strengthen from 2028 onwards.

Source: Investing.com