istributors will go dark. Following the announcement, Nike’s largest distributor in China, Topsports International, saw its shares fall as much as 26 per cent on Wednesday to a record low, closing down roughly 24 per cent. Shares in Pou Sheng, another major Nike distributor, also fell sharply. Taking control  Sales in Greater China have now declined for eight successive quarters. In the fourth quarter that ended 31 May, Nike’s revenue in the region fell 17 per cent on a constant-currency basis to US$1.3 billion, steepening from a 10 per cent decline the previous quarter, though less severe than the 20 per cent fall Nike itself had projected three months earlier. Against that backdrop, Nike said the consolidation is about strengthening the platforms where consumers begin and end their shopping journey, “making sure those experiences are direct, consistent and unmistakably Nike”. “This is not about reducing access,” said Cathy Sparks, general manager of Nike Greater China. “It is about reducing fragmentation and strengthening the consumer journey. When the experience is consistent, the brand becomes stronger.”  She relayed comments from Yu Wu, chairman and chief executive of Topsports, who acknowledged that “this adjustment will bring some short-term pressure to our business” but said the company firmly believes the direction “will help promote a healthier, more orderly, and more sustainable retail ecosystem in China” over the medium to long term.  Topsports, he said, would lean on “our strengths in offline retail operations, local consumer service and deep market development across city tiers”, bringing consumers “richer and more meaningful sport experiences” through new concept sport stores.  The price tag chaos  Jacques Roizen, co-founder of Shanghai-based Foresight Performance Partners, told Inside Retail the rot sits in how Nike itself shows up online. “It’s as if Nike runs two different brands under one logo,” he said. “Global stores and websites sell innovation, performance and athletes. But their most visible consumer touchpoint in China, their Tmall and JD flagship stores, sell coupons and flash sales. Same global assets, inverted priority.” He points to a recent example.  “The Ronaldo campaign led the global homepage as the hero image 10 days ago. On Tmall, it was demoted beneath the coupon banner and the flash-sale countdown. The athlete is not missing in China. He has been relegated to a secondary asset behind the discount. Even the Chinese tennis star is more visible on Nike’s global website and app than on Tmall or JD.” The disconnect extends to the top of the company: “Nike’s CEO says the Chinese consumer believes in their ability to innovate and inspire through sport, but their online storefronts didn’t get the memo.” Roizen gives Nike credit for establishing a Shanghai lab to develop China-specific innovation, “but the reality is that the storefront the Chinese consumer actually sees still leads with price, deals and discounts, not innovation, performance and athletes”.  “The global Nike playbook wasn’t defeated in China. It was set aside years before anyone called China broken. You cannot expect the playbook to win if you never run it,” he said.  Neil Saunders, managing director of GlobalData Retail, is similarly unconvinced that pruning the network solves the underlying weakness.  “While this isn’t a bad move, wide and complex distribution is not the primary problem. We know that because, although they are rationalising, fast-growing local brands, like Li-Ning and Anta, have extensive distribution in China,” he said.  “The difference with Nike is that those brands manage their networks better and present a much more coherent and consistent brand image to consumers. And that’s where Nike’s real weakness lies: it has lost its grip on brand relevance and distinctiveness. Tighter distribution can aid more disciplined brand messaging, but it does not create more disciplined brand messaging. Nike has to work on that separately.” Alongside the channel consolidation, the company has named its first-ever Greater China vice president of local product creation, focused on building products “designed, developed and made in China for Chinese consumers”. As Sparks put it, essential to delivering the “speed, relevance and precision this market demands”.  The company is also expanding local activations and regional teams, she said, “placing Nike teammates closer to where consumers live, shop and play sport”, in pursuit of a marketplace where consumers can move from inspiration to purchase to participation without friction. Distributors have five months to unwind Nike inventory from their online storefronts. And once the purge is complete, Nike’s official flagships will carry the full weight of the brand in China’s most contested retail arena. Further reading: Why is Nike struggling to win in China now?