Korean media: "Who even wears Nike now?" Chinese consumers are embracing domestic brands!
On August 31, the South Korean media outlet Seoul Economic Daily published an article stating that Nike, once dominant in the Chinese market, is now struggling as local consumer interest declines. Despite the Chinese sportswear market growing by over 50% in the past five years, Nike’s sales have actually dropped by 30%. This is due to Nike falling behind domestic brands in terms of localization and patriotic consumption, resulting in a loss of market leadership.
Nike's revenue in China has declined for eight consecutive quarters. For the fiscal year ending in late May this year, Nike's revenue in China reached $5.8 billion—its lowest level in eight years. This marks a 30% drop compared to its historical high of $8.29 billion recorded in the 2021 fiscal year.
Meanwhile, the market itself has been steadily expanding. According to data from market research firm GlobalData, the Chinese sportswear market grew by 51% over the past five years, reaching a scale of $85 billion last year. With increasing attention on fitness and health, spending on sports-related products has hit record highs in decades. China, once Nike’s biggest growth engine, has now become a burden on its global recovery efforts.
An analysis indicates that Nike’s downturn is not merely an economic issue but closely tied to shifts in consumer culture.
The head of consulting firm China Skinny said: “A few years ago, if you asked high school students what sneakers they wanted to buy, they’d say Nike or Adidas. Now, they say Anta or Li-Ning. Nike no longer feels like a cool brand to them.”
Consumer preferences have also evolved. In the past, foreign brands were automatically seen as premium products, but today price, technological capability, and product innovation have become more critical selection criteria.
Experts point out: “Nike still operates under a one-size-fits-all global brand model, with product innovation slower than that of its domestic competitors. Chinese consumers are far more discerning than they were 5 to 10 years ago—they care more about value delivered by products rather than brand prestige alone.”
Not all foreign brands are struggling. Adidas saw a 13% increase in sales in China last year, and Lululemon’s existing store sales rose by 20%. The key to Adidas’ successful turnaround lies in decentralizing product development to local teams and launching products tailored to Chinese tastes. For example, a “Chinese-style” sports jacket released ahead of the Lunar New Year sold out within just 27 minutes—a prime example of this strategy’s success.
In contrast, Nike is seen as constrained by its headquarters-centric decision-making structure. Since most decisions—including design—are made at headquarters, there is limited room for developing products suited to local consumers.
Nike has only recently begun making changes. After appointing Casey Sparks as Executive Vice President for Greater China in January this year, Nike has recently appointed its first-ever local Product Development Vice President, responsible for R&D of China-exclusive products. Nike plans to launch products designed and manufactured in China starting at the end of this year and strengthen its localized R&D capabilities over the next 18 months.
The company is also undertaking a comprehensive overhaul of its increasingly complex distribution network. It plans to streamline certain online channels and shift toward a premium strategy centered on full-price sales. According to BNP Paribas, this process could reduce Nike’s sales in China by up to $1 billion annually—representing about 17% of total revenue. Sparks stated: “In the short term, revenue will decline, but in the long run, we’ll be able to build a stronger business structure.”
Original article: toutiao.com/article/1875024349800460/
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