Nike's new China chief, Cathy Sparks, is driving a series of reforms to reverse the company's five-year decline in the Chinese market.

Sparks took over as head of Nike Greater China this spring, reporting directly to CEO Elliott Hill. Her mission is to convince millions of Chinese sneaker enthusiasts to give Nike a second chance. China is Nike's second-largest market, but over the past five years it has gone from the fastest-growing region to one of the worst-performing. Nike failed to capitalize on China's sports boom, while competitors like On and Hoka benefited. Nike's revenue in mainland China and Taiwan has dropped nearly 30% from its peak five years ago.

In an interview, Sparks said: "Being a big Western multinational brand is no longer enough on its own to win in the China market." In her six months on the job, Sparks decided to shut down most online stores operated by retail partners to elevate the brand's premium image, and quickly launch new product lines designed for China. She visited nearly a dozen cities, went into gyms to watch popular fitness classes like Hyrox, and attended local street basketball games to understand how Nike can capture China's booming sports scene.

Over the past decade, the number of marathon runners in China has doubled, pickleball and padel courts keep popping up, and young people gather at Lululemon stores for morning yoga. Beyond training, fashionable young Chinese use tennis skirts and high-end running shoes as fashion statements. The challenge is making consumers excited to wear Nike. A 27-year-old consumer from Zhejiang named Feng Yiqi once loved the brand because of sports idols like Kobe Bryant and Michael Jordan, but now says Nike's quality is inferior to Chinese competitors. He said: "Many domestic brands now offer more advanced technology at lower prices."

To understand such consumer perspectives, Sparks participated in focus groups to learn which sports Chinese consumers participate in, where they exercise, and what they do when they go home. Sparks said: "We will test and learn." Understanding Chinese consumers "will help us find the right formula."

Sparks faces fierce competition. Local rivals claim they can launch new models twice as fast as Nike. Nike's main Chinese competitor Anta owns multiple brands targeting the Chinese market, including Fila and ski brand Descente, offering consumers a variety of fashionable sports looks. Chinese sportswear giant Li Ning is also rapidly launching new sneakers.

Sparks is trying to fight back by restoring Nike's premium feel. During her previous role overseeing Asia-Pacific and Latin America operations, she worked to clear bloated inventory and improve the online buying experience. Now, Nike will largely stop selling products online in China through third-party sellers, including local retail giant Topsports. Sparks said third-party sellers created a fragmented online shopping experience, and she is trying to reduce heavy discounting. At a Topsports store on a popular online retailer, discounted Nike basketball shoes sell for less than $50, less than half the price of new models at Nike's own store on the same platform.

This is a risky decision. A significant portion of Nike's sales in China 鈥?estimated at close to 20% 鈥?comes from online third-party wholesalers. Some analysts praise Sparks's move, while others say it will hit revenue and cede market share to competitors like Adidas that continue selling through Topsports. Bernstein analysts wrote in July that many customers will "switch to another brand within their price range" rather than pay full price, potentially delaying Nike's revenue recovery in China. Nike said in June that average retail discounts in China had decreased, but projected full-year revenue would continue to decline. CEO Hill said: "We must return to growth in China. We must be more premium and more culturally relevant."

Brian Finn, who worked at Nike for eight years until 2024, said developing new products during his time at Nike could take two to five years 鈥?too slow in China's fiercely competitive market. He said Sparks's close ties to Nike's U.S. leadership will help her secure resources to accelerate product development. "She has a connection to Elliott and a lifeline back into the organization."

Nike was at its peak of cool in China in the 2000s, known for outfitting top NBA stars like LeBron James and Kobe. Today, Chinese entertainment options are more diverse, and NBA cultural influence has declined. Meanwhile, local brands have improved quality, making it harder for foreign companies to persuade Chinese consumers to pay high prices. Anta basketball shoes can sell for under $50, and Chinese online reviews often say their quality is superior.

To break through, Sparks wants more locally designed products that reflect Chinese culture and fashion. Such efforts have sometimes failed in the past. Nike's 2022 dragon-scale patterned basketball shoe, the ZoomCourt Dragon, was criticized for its $130 price tag and reliance on stale dragon motifs to connect with Chinese consumers. Sparks said she wants a new approach, appointing for the first time a vice president-level head of local product creation in China who reports directly to her. The team will double in size, with plans to launch the Nike Sportswear series in October, just six months after planning began. The series will cater to young Chinese consumers' interest in blending traditional and modern patterns. Sparks said the new series will initially be sold exclusively in physical stores to create an in-store experience and drive foot traffic.

The company also plans to focus on fast-growing activities like hiking, racket sports, and Hyrox. The Nike Hybrid RN, designed for running and weightlifting in Hyrox training with both stability and speed, launched this month, two weeks earlier than in other markets. Running revenue has achieved double-digit growth for six consecutive quarters, driven by high-priced fashionable running shoes like the Pegasus Premium and the company's engagement with local running groups.

She said basketball fans remain a force, and plans to bring top WNBA players to China, including company-endorsed Caitlin Clark and Sabrina Ionescu. According to Bernstein data, Nike's market share in China's sportswear market dropped from 27% in 2020 to 16% last year, and is projected to fall to 11% next year, partly due to Sparks's decision to end online retail partnerships.

Nike has many skeptics, including independent brand consultant Alexander Shapiro, who works with Chinese and Western brands and believes Nike's international marketing strategy is unsuitable for China. Shapiro said young Chinese participate in sports for fitness and socializing with friends, while Nike China's advertising focuses too much on the competitive aspects of sports, showcasing international athletes' victory moments. He said: "It feels like their local staff are just following what America projects onto them." Chinese consumers "no longer need advice from foreign superstars."