Nike China sales decline reaches 30% as local rivals gain ground

The Nike China sales decline has taken the company’s revenue in the region down 30% from its 2021 peak, even as China’s sportswear market expands. CNBC reported, citing company figures, that Nike’s annual China revenue fell to $5.8 billion in fiscal 2026 from $8.3 billion in 2021, its lowest level in eight years.

The fall has made Greater China Nike’s smallest market and added pressure to a broader turnaround effort. Sales in the region have declined year on year for eight consecutive quarters, according to CNBC’s review of company reports.

The weak performance contrasts with a broader rise in Chinese demand for sports products. GlobalData said China’s sportswear market grew 51% over the past five years, while Chinese government data cited by CNBC showed sports participation and exercise activity at multi-decade highs.

Why are Nike's China sales falling?

Analysts and consumer specialists told CNBC that Nike faces a mix of stronger domestic competition, younger shoppers’ changing preferences and a product strategy that has not been local enough. The shift is tied partly to Guochao, often translated as “China Chic,” a movement that promotes Chinese-made and Chinese-designed goods.

Yaling Jiang, founder of consumer research firm ApertureChina, told CNBC that younger shoppers see fewer recent Nike ideas that feel culturally relevant. Tracy Dai, director of operations at China Skinny, said Chinese teenagers who once might have named Nike or Adidas are now more likely to mention Anta or Li-Ning.

The political backdrop sharpened in 2021, when a previous Nike statement expressing concern about reports of forced labor in Xinjiang resurfaced. CNBC reported that some consumers called for boycotts and posted videos of sneaker burnings, while Chinese actor Wang Yibo ended his Nike endorsement contract. Domestic competitors including Anta and Li-Ning leaned into their use of Xinjiang cotton, according to CNBC.

Value is also part of the pressure. Wei Kan, who previously worked for Nike and Converse in China and Taiwan and now runs Conduit Asia, told CNBC that Chinese consumers have become more selective and that local brands have improved in production, marketing and technical product development.

How is Nike responding in China?

Nike says it has not lost cultural relevance in China. A company spokesperson told CNBC that younger consumers are looking for more “hyperlocal connections” through events and cultural moments, and said Nike has used local consumer insight in China for more than 40 years.

In January, Nike named Cathy Sparks, a 25-year company veteran, as vice president and general manager of Greater China, reporting to CEO Elliott Hill. Sparks told CNBC that Chinese consumers have changed and expect stronger product connections and brand engagement.

Nike is also adding local product authority. Sparks said the company hired its first Greater China vice president of local product creation, with a mandate to build goods designed, developed and made in China for Chinese shoppers. The first planned releases are two lifestyle capsules, one for Nike sportswear and one for Jordan streetwear, timed for the holidays, followed later by performance apparel and footwear.

Other global brands show that foreign companies can still grow in China when they localize effectively. CNBC reported that Lululemon’s comparable sales in China rose 20% in fiscal 2025, while Adidas brand revenue in the region rose 13% after shifting more product creation and decision-making to local teams.

Why is Nike changing its China distribution?

Nike is also trying to repair a distribution system that expanded during the Covid-19 pandemic. Sparks told CNBC that the company allowed brick-and-mortar distributors to sell online even though their agreements did not include digital sales, creating a fragmented market and making it harder to present products clearly.

The company is moving to shut down those online storefronts. Laurent Vasilescu, an equity analyst at BNP Paribas, estimated to CNBC that the change could reduce annual revenue by as much as $1 billion, equal to about 17% of Nike’s China sales.

Sparks said some distribution will go away, but Nike expects to replace that volume with more full-price sales and a stronger consumer experience. On Nike’s most recent earnings call, outgoing finance chief Matt Friend said near-term China revenue trends would resemble recent performance and that profitability would reach a low point before sales recover.

This story draws on original reporting from CNBC.