Nike was once China's sneaker king. Here's why its sales have fallen 30% - CNBC

What the report says

CNBC reports that Nike’s China business has contracted sharply despite rising demand for sportswear in the country. The outlet says Nike’s annual revenue in China has dropped 30% since fiscal 2021, reached its lowest level in eight years at the end of May, and has declined year over year for eight consecutive quarters. China, formerly Nike’s fastest-growing region, is now described as the company’s smallest market and a drag on its broader turnaround.

According to CNBC, analysts and China-focused retail experts point to several pressures: the rise of “China Chic,” stronger local competitors such as Anta and Li-Ning, younger consumers’ preference for domestic brands, and demand for products tailored more specifically to Chinese shoppers. The report says the shift accelerated after a 2021 backlash over Nike’s statement on reports of forced labor in Xinjiang, which fueled calls for boycotts and gave local rivals an opening to appeal to national pride.

Nike disputes the idea that it has lost cultural relevance in China. CNBC says the company argues younger shoppers now expect more local connection, and Nike is trying to build deeper ties through local sports communities, cultural moments and China-specific product design. Cathy Sparks, Nike’s new Greater China head and a 25-year company veteran, told CNBC the company needs to meet changed consumer expectations to drive more full-price sales.

The report matters because China remains a major test of Nike’s global recovery strategy. CNBC notes that some Wall Street analysts expect improvement after North America stabilizes, but experts in China see a more complex challenge involving brand identity, distribution, discounting and local competition.