Nike To Cut Off Thousands Of Online Distributors In China Starting In January

According to CNBC, Nike plans to cut off thousands of online distributors in China starting in January as it narrows its digital sales channels to its official website and app, plus storefronts on Tmall, JD.com and Douyin. The company said the move is intended to clean up a fragmented online marketplace, improve pricing control and support a return to growth in the region. Cathy Sparks, Nike's vice president and general manager of Greater China, said the new flagship channels will serve as a single destination for the brand, with clearer product presentation and more consistent consumer experiences. Nike said its online footprint currently includes thousands of additional storefronts run by brick-and-mortar partners and secondary distributors. The company said that broad network has widened access to its products but also created inconsistent branding and pricing and complicated efforts to reverse a sales decline in the region. Nike's plans come as the region has shrunk about 30% in the last five years. BNP Paribas equity analyst Laurent Vasilescu said the shift resembles Nike's earlier decision to cut off wholesalers in North America, which he said hurt market share, sales and margins. Topsports, Nike's largest distributor in mainland China, said it supports the decision, although CEO Yu Wu said the change will create some short-term pressure on the business.