Nike’s China woes reflect wider sportswear market decline

Nike’s struggles in China are deepening, with its Greater China sales plummeting 26% in fiscal Q1 2027, following declines of 10% and 17% in the two previous quarters. However, the issue appears broader than just Nike, as most of its competitors are also facing sharp declines, indicating a weak overall sportswear market in China rather than a simple shift in market share.

The stock performance of Nike’s rivals supports this view. ANTA Sports and Li Ning, two local brands gaining market share, have seen their stocks drop significantly. Li Ning is down 34% year-to-date, suggesting weak consumer demand across the board. Nike plans to regain control of its digital sales in China in early 2027 and focus more on wholesale partners and locally tailored products, which could lead to heavier discounting and margin pressure for all brands in the market.

In the Western market, challenger brands like On, Deckers, and Wolverine are seeing some gains as Nike works through its turnaround. On Holding, in particular, has seen a 13.9% increase in the past month, making it the clearest relative winner lately. However, analysts warn that a stronger Nike in performance categories like running could directly challenge brands like On and Hoka, which are currently holding back Nike’s momentum.

The next key event for Nike is its Investor Day on November 16-17, 2026, where a credible five-year plan could potentially draw investor attention back from the challenger brands. For now, the bottom line is that in China, Nike’s struggles reflect a weak market, and in the West, challenger brands gain only as long as Nike’s core sport business remains behind them.