Nike bets on local innovation for China comeback

Cathy Sparks, Nike's vice-president and general manager for Greater China, arrived for her interview wearing bright red Vapor 12 tennis shoes — the same model designed for and worn by Chinese tennis star Zheng Qinwen during training in China this month.

The shoes were more than a fashion statement. They embodied what Sparks hopes will become the blueprint for Nike's comeback in one of its most important — and most challenging — markets: products inspired by Chinese athletes, designed and developed locally, and brought to market faster than ever before.

After more than 25 years at Nike, with leadership roles spanning North America, Europe and Asia-Pacific, Sparks has been handed one of the company's toughest assignments: returning the company to sustainable growth in China after several years of declining sales.

The challenge is considerable.

Nike's revenue in China fell 12 percent in the fourth quarter ended May 31 and 11 percent for the full fiscal year, weighed down by weakness in both its direct-to-consumer and wholesale businesses. The slowdown has made China a key battleground in Chief Executive Elliott Hill's global turnaround strategy.

For Sparks, reversing that trend requires more than launching new products. It means rethinking how Nike creates products, tells its brand story and reaches consumers in what she describes as one of the world's fastest-moving retail markets.

"The complexities of the China market are challenging. They're exciting," Sparks, who took over the business in April, said. "It's a complicated puzzle to figure out at this moment."

Her strategy mirrors Hill's three priorities — "product, marketing and marketplace"— but with a distinctly local focus.

Nike has doubled the size of its local product creation team and appointed a vice-president dedicated to local creation. Its first apparel collection created, designed and developed entirely in China will debut in the coming holiday season. It is less than half the time typically required for a global apparel launch.

"We're really working on elevating the voice of the Chinese athlete into our global product engine," Sparks said. "We are empowered as the China team to create product in China, made in China, designed and developed in China for Chinese athletes and consumers."

The faster development cycle reflects the pace of China's sportswear market, where domestic competitors launch products more quickly and consumer tastes evolve rapidly through social media and digital commerce.

Sparks believes closer collaboration between Nike's local design teams and manufacturing partners will become a competitive advantage. "This will be one of the most important unlocks to our growth," she said.

In addition to product innovation, Nike is reshaping its marketplace after years of expanding across thousands of retail touchpoints that executives say diluted the brand and encouraged discounting.

The company is reshaping its digital marketplace in China. Beginning January 2027, sales of Nike products through partner-operated online storefronts, including Topsports’ online stores, will be discontinued.

"We have over 2,000 disconnected points of distribution online," Sparks said. "When there is that much disconnected distribution, the stories behind our most important products don't cut through."

"The challenge we've had over the last couple of years is that our marketplace has become so fragmented," Sparks said. "It's been very challenging for us to bring together a great product, an amazing story and a beautiful presentation for the consumer."

Instead, the company is directing consumers toward its flagship stores for Nike, Jordan, ACG and Kids while renovating existing locations and introducing retail concepts designed specifically for Chinese consumers.

Early signs are encouraging. Nike's House of Innovation store in Shanghai posted double-digit sales growth in the latest quarter, while recently renovated stores and a new ACG concept store in Nanjing, which opened in April, also outperformed.

One of Sparks' first major initiatives is bringing NikeSKIMS to China through a five-month pop-up at Shanghai's HKRI Taikoo Hui beginning Sept 29, entering a premium women's activewear category. Rather than simply importing the concept, she said Nike will refine the offering based on feedback from Chinese consumers.

"The style that's coming out of China is informing the rest of the world," Sparks said. "We'll co-create what this brand can be in China with the consumers of China."

Simplifying distribution is only the first step.

Nike's broader objective is to restore its premium positioning in a market where heavy discounting and intensifying competition have eroded pricing power.

"Premium doesn't mean everything has to be expensive," she said. "Whatever the price is, the consumer needs to feel they're getting the best value in the industry."

Sparks argues Chinese consumers are among the world's most sophisticated, expecting cutting-edge performance, culturally relevant design and compelling retail experiences. When those elements come together, she believes they are willing to pay full price.

Beyond the retail environment, the company is also sharpening its focus on the sports categories driving consumer demand. In China, Nike’s biggest bets are running, basketball and soccer.

Running has become Nike's strongest growth engine in China, fueled by a boom in marathon participation and recreational running. The category posted mid-single-digit growth in the latest quarter, led by products including the Pegasus 42 and footwear developed specifically for female runners.

Rather than focusing solely on product innovation, Sparks wants Nike to deepen its relationship with runners through city running clubs, marathon partnerships and localized community events.

Basketball, however, remains central to Nike's long-term ambitions.

Historically one of Nike's largest and most profitable businesses in China, the category has become increasingly competitive as domestic brands invest aggressively in local athletes and younger consumers diversify into running, outdoor sports and racquet activities.

Sparks said Nike plans to invest even more heavily.

The company is expanding youth basketball programs, strengthening partnerships with schools and communities, and developing products tailored for Chinese players while telling more locally relevant stories around the sport.

"We remain incredibly bullish on basketball," Sparks said. "The fundamentals haven't changed. The love of the game is still there, and we believe we have tremendous opportunity to grow the sport with the next generation."

Soccer and tennis also posted double-digit growth, benefiting from rising participation and broadening Nike's opportunities beyond its traditional strengths.

Looking ahead, Sparks envisions a business where significantly more products across sports and lifestyle categories are created and developed in China, retail seamlessly integrates physical and digital experiences, and local teams play a greater role in shaping the company's innovation agenda across Asia and globally.

For Nike, the China turnaround is about proving that a global sportswear company can regain momentum by allowing one of its most important markets not only to drive growth, but also to influence how the brand evolves.