Nike just made a bet that could either rescue its China business or accelerate its decline, and a senior analyst at BNP Paribas thinks it's the wrong one.

Starting in January, Nike will stop allowing its major retail partners in China to sell its products online. Those distributors, which collectively own and manage thousands of Nike stores across the country, will be pushed toward in-store-only sales. Online, Chinese shoppers will find Nike products only through official branded storefronts on Tmall, JD.com, and Douyin, plus Nike's own website and app. The company's vice president for Greater China, Cathy Sparks, told Reuters the current setup has become "so fragmented and cluttered" that it undermines the brand.

The logic is straightforward: when your products appear across dozens of third-party storefronts at varying prices and with inconsistent presentation, you lose control of how the brand feels to shoppers. Nike wants to sell at full price, rebuild trust, and create a cleaner experience that connects online browsing to physical stores.

The hole in the strategy

The problem is that Nike's sales were already falling sharply before the marketplace got crowded. Sales in Greater China dropped 17% in Nike's most recent quarter, on a consistent currency basis, steepening from a 10% decline the quarter before. Domestic rivals Anta and Li Ning have taken real market share. So has On, the Swiss brand, and Hoka, now owned by Deckers.

BNP Paribas analyst Laurent Vasilescu put it plainly in a research note: "Nike doesn't have a distribution problem in China and elsewhere. It has a product problem." His concern is that restricting distribution hands competitors more room to grow precisely when Nike can least afford to give it.

That critique lands harder when you look at the collateral damage. Topsports, the leading Chinese sportswear retailer and one of Nike's biggest store partners, generates 22% of its revenue from online Nike sales. Its board has said it anticipates a "significant" short-term negative impact from the change, though Topsports added it remains committed to working with Nike on offline arrangements.

Topsports is absorbing a meaningful chunk of the risk here. Nike is essentially asking its partners to shrink a revenue channel that works for them, in service of a brand strategy that may or may not work for Nike.

What this means beyond China

Nike's China troubles matter to more than just Chinese shoppers. China is Nike's third-largest market, and its persistent decline there has shaken investor confidence in CEO Elliott Hill's broader turnaround plan. Hill took the top job roughly two years ago and has been pushing the company back toward sports performance products and rebuilding wholesale relationships in North America. Progress has been slow enough that China remains a drag on the overall story.

Sparks said Nike is also investing in products designed specifically for Chinese consumers, including appointing a new vice president of local product creation in the region. That suggests Nike at least privately agrees with part of Vasilescu's diagnosis, even if the company frames the e-commerce overhaul as the lead move.

The honest read is that both things can be true. A fragmented online marketplace probably does erode the brand over time. And a product lineup that doesn't connect with what Chinese consumers actually want probably matters more, sooner. Nike is betting it can fix both at once. The January timeline will reveal fairly quickly which problem was the real one.