WASHINGTON COUNTY (dpa-AFX) - Nike Inc (NKE) plans to cut ties with thousands of online distributors in China starting in January, as it looks to tighten control over how the brand is priced and presented online and to reignite growth in the region.
From next year, Nike says it will concentrate most of its online sales on its own website and app, as well as its official flagship stores on Tmall, JD.com, and Douyin. That shift will reduce its dependence on the many third-party online shops run by physical retail partners and secondary distributors, which Nike says have led to inconsistent pricing and uneven branding.
Nike added that it will continue supporting retail partners' brick-and-mortar stores, even as it scales back their online sales presence. The company expects the approach to improve the customer experience and give it more control over pricing, although some analysts warn it could put pressure on revenue in a market where Nike's sales have fallen by about 30% over the past five years.
Still, Topsports Nike's largest distributor in mainland China supported the move, saying it could help create a healthier, more sustainable retail environment and improve the consumer experience over the long term.
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