Nike (NKE, Financials), the maker of athletic footwear and gear, said it planned to end its relationship with thousands of online distributors in China as part of an overhaul of its digital strategy in the nation.
From January, Nike will focus sales on its own website and app and official storefronts on Tmall, JD.com and Douyin.
The initiative aims to consolidate a fragmented online presence and allow the corporation better control over pricing, product presentation and the consumer experience.
Nike says the adjustments are not meant to restrict access. Rather, the corporation aims to provide a more consistent brand to buyers across the platforms they already use.The decision could put short-term pressure on local retail partners that have gone online in recent years.
Topsports, the biggest distributor for Nike in mainland China, said it supports the strategy despite an expected impact on its business. An organized digital marketplace might make products more attractive and sustain healthier growth over time, the business argued.
China is a huge but difficult market for Nike, where softer demand and aggressive pricing have hurt sales. Now investors will be looking to see if tighter distribution can help Nike maintain its brand and regain momentum without sacrificing reach.