After falling by more than 80% in 5 years, Nike has completely fallen from the altar.

On October 1, 2026, Nike’s Q1 financial report for fiscal year 2027 was released. Total revenue fell by 4% year-on-year, lower than market expectations. The gross profit margin seemed to have slightly increased by 60 basis points. In fact, it was all supported by cost cutting and inventory clearance, and the gold content of growth was almost zero.

Compared with the peak market value of US$264 billion in November 2021 and the all-time high stock price of US$179.1, Nike’s market value is now just over US$50 billion, with a cumulative decline of more than 80%, and the market value has evaporated by more than US$210 billion. It has fallen by more than 45% since 2026, making it the ugliest one among the 30 constituent stocks of the Dow Jones.

The most ironic thing is that this is not an industry winter. China’s sports shoes and apparel market is still expanding steadily. Anta’s domestic revenue is already 2.2 times that of Nike China, steadily crushing the former industry hegemon.

The sports giant that once swept the world and took advantage of Chinese consumers has fallen from its peak in just a few years.

It can be said that the current situation was created step by step by myself.

01

pride and Prejudice

Nike’s ability to remain the world’s leading sports brand depends partly on brand operations and partly on China’s support.

In the past few decades, China has been Nike’s “dual confidence”: it is both the world’s core production factory and the world’s largest growth market.

On the supply chain side, at its peak, Chinese factories accounted for more than one-third of Nike’s footwear production capacity.

Relying on the well-established domestic shoe material, OEM, and logistics industry clusters, Nike has been able to reduce costs, increase production capacity, and support a global supply system.

Even after the crazy relocation of production capacity later, Vietnam now accounts for 52% and Indonesia 27%. China still retains 16% of production capacity and continues to cover the bottom line.

On the market side, China is Nike’s super cash cow.

From 2015 to 2021, the golden period of consumption upgrading, Nike relied on its brand halo, star IP, and first-mover advantage to almost win the Chinese market.

In fiscal year 2021, Greater China’s revenue soared to US$8.29 billion, hitting a historical peak. The then CEO also made a high-profile statement: “Nike is a brand that belongs to China and is born for China.”

However, even though he says “born for China”, he acts with extreme arrogance and double standards.

The Xinjiang cotton incident in 2021 has become an absolute watershed in Nike’s fate.Under the premise that it clearly violated the consensus of the Chinese market and hurt consumers’ emotions, Nike headquarters stubbornly stood in line, refused to admit its mistakes, and treated the incident coldly throughout the entire process without apologizing or making any remedial plan.

This is not only a simple public relations overturn, but also a complete loss of business position.

The simplest rule in the business world: If you want to make money in a market, you must respect the bottom line of the market.

Nike has chosen the stupidest path. It not only wants China’s production capacity to reduce costs, but also wants Chinese consumers to pay for it. At the same time, it also wants to stand in the opposite direction and consume the favor of the Chinese people.

It was also from this moment on that young Chinese consumers were completely shattered by Nike’s filter. It is no longer a trend benchmark or high-end belief, but just a foreign brand with an improper attitude and aloofness.

Once the cracks in people’s hearts appear, all subsequent business loopholes will turn into wounds that accelerate decline. Since then, Nike’s business in the Chinese market has continued to decline.

According to the Q1 financial report of fiscal year 2027, the business in Greater China is the hardest hit area, with single-quarter revenue of only 1.18 billion US dollars, a year-on-year plunge of 22%, and the real decline after excluding exchange rate factors is as high as 26%.

This is Nike China’s ninth consecutive quarter of revenue decline, and the decline cannot be stopped.

02

Smash the market with your own hands

If an arrogant attitude lays the foundation for hidden dangers, then Nike’s subsequent series of operations would be to personally detonate the bomb and ruin the chance of a comeback.

The most deadly of them isAn adaptable DTC strategy, and the resulting vicious cycle of prices and channels.

In 2017, Nike implemented DTC direct sales reform globally. The core is to cut out middlemen, retain profits, and control user data.

This model can still work in the mature North American market, but if it is copied and moved to the Chinese market, where e-commerce is extremely developed and the distribution system is intricate, it will directly lose control.

In the past, Nike China had a dual-track model of “direct sales + distribution”. The official store was responsible for the brand image, and distributors such as Taobao and Baosheng were responsible for driving down the volume and sharing inventory.

When the market goes up, both parties perform their respective duties and achieve mutual benefit and win-win results.

However, in order to forcefully increase the direct sales data, Nike began to continuously squeeze dealers, reduce the quota of hot products in channels, and cut off dealer marketing resources. At the same time, its own direct stores also took the lead in launching deep discounts to achieve KPI.

With food shortages and involution at the same time, dealers were gradually forced into a desperate situation. When the market is cold, goods are slow to sell, and dealers are under extreme inventory pressure, they can only sell goods at low prices on platforms such as Douyin, Pinduoduo, and Dewu to make money.

Soon, Nike’s online price system collapsed.The same style of sneakers can be sold for 1,200 yuan in the official flagship store, and can be obtained through more than 700 channels. New products are sold at all prices within a month of being launched, and limited editions are no longer scarce. As a result, the premium base of high-end brands is gradually being broken up.

When the epidemic broke out in Southeast Asia in 2022, supply chain disruptions and inventory surged by 44% to US$9.7 billion. Nike launched a bottom-line clearance model, further solidifying its label as a “discount brand”.

The most typical one is the Pegasus 42 running shoes, which were launched for 949 yuan. In just five months, they fell below 600 yuan. The flagship new product has become a discount currency.

Seeing that the channels were completely in chaos, Nike launched a “one-size-fits-all self-rescue” in 2026. It officially announced that it would completely remove all online dealers from 2027 and completely take back its online operating rights.

This wave of operations can be said to be a typical example of reversing the cause and treating the headache.

Inflated prices are not the fault of the dealer, but the result of the goods not being sold and the brand being unavailable.

Cutting off online channels seems to have streamlined the price system, but in fact it directly cuts off the arm and cuts the revenue.

Taobao alone lost 5.6 billion yuan in annual revenue. On the day of the announcement, the stock price plummeted 24.08%, and the market value evaporated by 2.85 billion Hong Kong dollars in a single day. The entire sports retail industry was shaken.

In addition to channel chaos, organizational reforms also confuse operations. The latest Pace reorganization plan directly downgrades Greater China from an independent first-level region and merges it into the Asia-Pacific super region controlled by Singapore.

This adjustment seems to be streamlining the structure, reducing costs and increasing efficiency, but in fact it weakens the voice of the Chinese market and makes the already slow localization decision-making even more lagging and rigid.

03

Loss of fault tolerance

What’s even more cruel is that in the past few years when Nike has been overturned internally and lost popularity among the public, the Chinese sports market has already changed, and its living space has been squeezed in all directions.

In the past, Nike and Adidas monopolized the market, with a combined market share of 33%, and domestic products could only catch up.

Today, the combined share of the two major foreign brands has dropped to 25%, and the combined share of the three domestic brands Anta, Li Ning, and Xtep has exceeded 26%, officially completing the overtake.

Today’s domestic products are no longer the low-end players that only imitated them in the past. They have even surpassed them in more and more product capabilities.

Not only are domestic products on the rise, but emerging overseas brands such as HOKA and Angpa are also accurately positioned in high-end segmented tracks. Angpa’s revenue in the Asia-Pacific region surged 61.4% year-on-year at fixed exchange rates. HOKA has seized the high-end runner market with professional running shoes and high regular prices. Nike fell into a two-sided attack by domestic products competing for the masses and cutting-edge products competing for high-end products, and completely lost its market dominance.

Today’s young consumers are no longer superstitious about overseas logos. When buying sneakers, look at performance, cost-effectiveness, and brand stance. Do not blindly worship foreigners or follow the trend of premium prices.

Nike’s “default right of first choice” saved by the dividends of the times has been completely cleared.

Seeing both its performance and stock price collapse, Nike also launched an intensive self-rescue, taking frequent and intensive actions, but in the end it only addressed the symptoms but not the root cause.

In terms of channels, the online business will be fully controlled by direct sales, forcefully end the price war, and recycle user data; offline dealers will be retained to defend the sinking market, trying to take a compromise route of “maintaining the brand online and maintaining scale offline”.

Organizationally, it has launched a global round of layoffs, aiming to save a total of US$2.5 billion in costs by 2031, eliminate approximately 5,000 positions, streamline redundant structures, and reduce operating expenses.

In terms of products, it has finally started localized R&D, expanded its Chinese innovation team, established local R&D positions, and launched exclusive shoes suitable for Chinese runners and Chinese venues, trying to get rid of the old routine of “global shell”.

But these remediesAfter all, it’s too late and too shallow.

Channels can be straightened out overnight, but cracks in consumer trust can never be repaired by administrative means.

Forcing a unified price will only make Nike, which lacks cost-effectiveness and attitude, completely lose to domestic products that are willing to sincerely offer profits and cater to users.

Although local research and development has begun to increase, it is more superficial. The core technology and product voice are still firmly in the hands of the U.S. headquarters. The Chinese team can only make fine-tuning and adaptation, but cannot lead innovation.

Combined with the downgrading of Greater China and the unified management and control of Asia-Pacific, it is difficult for localization reforms to truly be implemented.

At the same time, the shortcomings of Southeast Asia’s supply chain continue to be exposed, with declining quality control and frequent workmanship issues; the United States maintains a tariff of about 20% on imported shoes from Vietnam, with an annual incremental cost of US$1.5 billion, which continues to squeeze profits and further worsens Nike’s profit dilemma.

The above-mentioned unfavorable factors eventually led to Nike’s room for error becoming smaller and smaller, making a comeback increasingly difficult.

04

結語

Many people attribute Nike’s failure to the rise of national trends, but national trends are just external variables that follow the trend.

What really defeated Nike was not its opponents, but itself.

It once mistakenly believed that the Chinese market is a permanent dividend depression and a harvesting ground for mindless paying, but it forgot the most basic common sense in business. The market has no permanent dividends, consumers have no permanent preferences, and respect is always two-way.

While relying on China’s supply chain to survive and the Chinese market to make money, while ignoring the emotions of Chinese consumers and adhering to the wrong stance, this kind of double standards and arrogance is destined to pay a heavy business price.

The story of Nike has taught a profound lesson to all multinational brands deeply involved in China. No matter how great the brand halo is and no matter how high the industry status is, once it loses its respect for the market and touches the bottom line of consumers, the day when the dividends fade away is the day of decline.