Restructuring the Greater China Market Ecosystem: Just to Better Serve Local Athletes

Cathy Sparks (Cathy Sparks), Vice President of Nike Group and General Manager of Greater China

I have been back in China for the past six months, and this has profoundly shaped my understanding of the potential of NKE.US (NKE.US). Here, Nike can transform lives, drive industry development, and achieve rapid growth through deep connections with consumers and love for sports. During this time, I visited many cities in Greater China, personally witnessed the resilience of Nike and Jordan's brands, and felt the close connection between us and athletes from all over the world.

I felt the energy of 25,000 fans in the Super League match between Shanghai Seaport and Yunnan Yukun; I saw a new generation of young people struggling in the Chinese High School Basketball League; I also saw an impromptu street basketball game on Saturday morning at Tianhe Stadium in Guangzhou. Basketball fans were sweaty; I also experienced a fencing course with Olympic champion Zhang Jialang in Hong Kong; and even more memorable, in the extremely challenging ACG Chongli 168K cross country game — even when the typhoon was threatening, I couldn't stop our team 1 and our team 2000 runners, and It is encouraging that trail runner Yao Miao led the young girls in the youth group to run together.

Sport is the “fuel” for the city's vitality. While shaping culture, it also reminds Chinese sports enthusiasts of all ages and abilities that the potential is limitless. Nike and Jordan are still full of energy here. Our foundation is solid, and our connection to athletes and consumers is real and strong.

I also spent hundreds of hours walking around the city's commercial districts — visiting shopping malls, observing consumer groups, studying live e-commerce, meeting partners, and visiting stores with colleagues. This is certainly a rapidly changing and deeply connected market. I started my career as a frontline position at Nike stores. Since then, I've been involved in shaping Nike's global marketplace ecosystem and consumer experience for 25 years, working in Asia for quite some time. Because of this, this opportunity has a very personal meaning for me. I've seen firsthand how immersive retail experiences and connected digital platforms inspire consumers through the world's top athletes and innovative products; I've also seen the magical moment consumers first put on new Nike running shoes to achieve a new 5 km running goal.

All of these experiences further confirm a simple yet important thing: our connection to consumers is still strong, yet our market layout is not as it should be. Today's consumers expect sincere products, consistent and clear brand narratives, and a smooth consumer experience at every touchpoint. By creating a more unified, high-quality, and deeply interconnected market ecosystem, we can reduce market fragmentation, strengthen trust with consumers, and provide them with a better Nike and Jordan experience at every touchpoint.

However, the reality is that compared to Nike's history of always synchronizing with the market and even leading the market in the past, our market presentation today has become too fragmented. As consumer behavior rapidly changed during and after the pandemic, some of the initiatives we have taken have led to experiences that were not consistent, credible, and did not achieve the expected growth.

As a result, Nike is focusing on strategic actions to reshape our market ecosystem, starting with digital channels. Starting in January 2027, Nike will reinvent the digital market ecosystem in China with the official flagship stores of Tmall, JD, and Douyin as the core, as well as Nike's official website and app. These new official flagship stores will become Nike's unified shopping portal in the ecosystem of these platforms, and bring consumers an upgraded experience with a more clear product presentation, a more moving brand narrative, and a more complete consumer journey. This means that consumers will start and complete their shopping journey more on these online platform channels, while also ensuring that their experience is direct, smooth, and always has Nike characteristics.

As part of this adjustment, with the exception of some authorized partners, online stores currently operated by partners and selling Nike products will gradually stop selling Nike products. The purpose of this adjustment is not to reduce shopping entrances, but rather to reduce the fragmentation of online channels and enhance the integrity of the consumer journey. When the consumer experience is consistent, the brand will also become stronger.

It's not just a digital strategy. Nike and Jordan stores remain at the core of the consumer experience with our brand. Our retail partners play a critical role in bringing sports to the community, and we remain committed to growing with them.

Over the past six months, we have launched new retail concepts, such as ACG Basecamp and ROOKIE Kids stores; we have upgraded our existing store matrix such as the Shanghai House of Innovation flagship store. We have seen a positive consumer response, which has led to increased same-store sales and a rebound in customer traffic. At the same time, we are also developing a new retail concept led by a local team and will bring it to market over the next six months. The jobs I saw met local needs and were also very innovative, and made me feel the Nike we know and love.

We will continue to work closely with our partners to enhance product presentation, optimize service experiences, strengthen product portfolios, and create more meaningful, sports-led experiences in stores. When we make these improvements, consumers respond positively, and we see clear opportunities to further strengthen the market ecosystem and create value for our partners.

Our relationships with our partners are based on a common understanding that in order to create a healthier long-term market ecosystem, short-term adjustments are sometimes needed. Recently, I know and respect Mr. Yu Wu, Chairman, CEO and Executive Director of Taobo International Holdings Co., Ltd., and shared his views with me:

“As Nike's largest distributor in mainland China, Taobo has developed together based on the principle of mutual benefit and win-win situation. It has been 27 years since then. In the short term, this adjustment will put significant pressure on the company's business. However, we firmly believe that in the medium to long term, this direction will help promote a healthier, more orderly and sustainable retail ecosystem in the Chinese market, and further enhance the consumer experience and product appeal. In the future, we will continue to work closely with Nike to give full play to our advantages in offline retail operations, local consumer services, and deep cultivation of urban markets at all levels to bring more professional and richer sports experiences to Chinese consumers through new-concept sports stores and high-quality physical retail scenarios.”

I totally agree with that. The core of this is to build a stronger and more sustainable market ecosystem, so that we can better serve consumers and support Nike and its partners to achieve long-term growth.

At the same time, we are also promoting broader changes to be closer to consumers and provide strong support for overall business transformation. We recently appointed Nike's first Vice President of Local Product Innovation in Greater China to focus on creating products designed, developed, and manufactured in China for Chinese consumers. This focus is critical and will help us continue to deliver products closer to the needs of Chinese consumers with the speed, relevance, and accuracy required by this market.

At the same time, we are also continuing to strengthen our connections with the local community — launching more local events, investing in regional team building, and bringing Nike teams closer to consumer life, shopping, and sports. Because the strongest market ecosystem is an ecosystem where products, brand narratives, communities, digitalization, and retail connect and seamlessly collaborate with each other. In such an ecosystem, consumers can smoothly connect from inspiration to completing purchases to participating in sports; and every interaction further strengthens the brand spirit and value that Nike represents.

This is our strategy: create a higher quality digital market ecosystem, more powerful retail experiences, more innovative products derived from local insights, and bring the team closer to consumers to jointly bring consumers a consistent and high-quality Nike brand experience.

We are advancing these changes with a clear direction and firm conviction because we are convinced of this market and its long-term potential. It is this belief that shapes the actions we are taking today. This work requires focus and self-discipline, but the direction is very clear. The market has changed, and so must we.

Nike has an outstanding team in Greater China that can work together to advance this momentum. My teammates in Greater China inspire me every day. They have a deep understanding of this market, understand our consumers, and are already working hard to continuously improve the brand experience. Personally, I'm full of energy and full of confidence. Nike's future in Greater China is bright. We will always be committed to building the future — a future built on a stronger, more connected, and higher quality market ecosystem. Whether online or offline, we will focus on better serving athletes in Greater China in an unprecedented way*.

*As long as you have a body, you are an athlete.