American brands losing ground in China has become one of the defining business stories of the past several years, with household names including Nike, Starbucks and General Motors watching revenues shrink as domestic competitors surge. The causes are interconnected: rising geopolitical tensions, a wave of fast-moving local rivals and a failure to adapt products and pricing to what Chinese consumers actually want.
Aaron Cheris, head of global retail practice at Bain & Company, put it plainly to CNBC. ‘China is such a big market. The numbers are so big so quickly when you talk about China that sort of everybody has wanted to try, and that’s why all brands went there,’ he said. The problem, he added, is that those companies have not adjusted to the local market and its changing structures and needs.
Nike: From Fastest-Growing Region to Eight-Year Revenue Low
Nike’s decline in China is among the sharpest on record for a major consumer brand. Its China business has shrunk 30% since 2021, with annual revenue hitting its lowest level in eight years in the spring. On its most recent earnings call in June, outgoing CFO Matt Friend said he was unable to determine when the company’s China business would return to growth.
The wider business has also felt the pressure. According to BigGo Finance, Nike’s revenue fell nearly 10% to approximately $46.3 billion in fiscal 2025, after peaking at $51.362 billion in fiscal 2024. That global slump makes the China recovery effort all the more urgent.
The brand’s distribution overhaul is now under way. According to OregonLive, Nike is cutting about 1,000 third-party online vendors in China as part of a reset of its China business. The scale of that vendor cull signals how dramatically the company needs to rethink how its products reach shoppers. Adding further weight to that shift, BigGo Finance reports that Topsports, which has partnered with Nike for 27 years, will fully suspend online sales of Nike products in mainland China effective 1 January 2027.
Cathy Sparks, who took over as Nike’s vice president and general manager of Greater China in January 2026, according to Briefs, has said the company is actively working to reconnect with Chinese consumers. Yaling Jiang, founder of consumer research firm ApertureChina, previously told CNBC that Nike has ‘just become irrelevant’ in China, while Adidas has gained traction.
The backdrop is a Chinese sportswear market that has more than doubled over the past decade, according to GlobalData. American brands losing ground in China’s sports sector is particularly pointed given that scale of growth.
Starbucks, GM and Others Counting the Cost
Starbucks entered mainland China in 1999 and became the company’s second-largest market by 2015. The Covid-19 pandemic began a downward turn, as Chinese consumers gravitated towards lower-priced local alternatives. Luckin Coffee, a domestic rival, now has more than three times the number of stores in China as Starbucks, and sells drinks at a steep discount. CEO Brian Niccol responded by creating a joint venture with Boyu Capital to operate the China business, with Boyu holding a roughly 60% stake.
The automotive industry tells a similarly stark story. Detroit’s ‘Big Three’ automakers (GM, Ford Motor and Chrysler parent Stellantis) have collectively fallen from a global market share of 21.4% in 2019 to an estimated 15.7% in 2025, according to S&P Global Mobility. General Motors, the longest-standing US automaker in China, saw its earnings in the region fall from around $2 billion annually in 2018 to two consecutive years of losses in 2024 and 2025. EV leader Tesla is reportedly weighing the sale or spinoff of its Chinese business, according to a July report by The Wall Street Journal.
Procter & Gamble (P&G), for which China is the second-largest market, has also felt the strain. Sales of its SK-II skincare brand have seesawed, hurt in part by anti-Japanese sentiment in late 2023 and by Chinese consumers travelling less. Yet P&G CEO Shailesh Jejurikar told analysts in late July that the company is ‘now growing share in China for the first time in 15 quarters, driven by fundamental changes we made similar to what we’re doing in the company.’
Gap took a different route entirely, selling its China business to e-commerce firm Baozun in a $40 million all-cash deal in 2022. Under new local management, Gap broke even for the first time earlier this year and now has plans to open 50 new stores in mainland China in 2026.
Who Is Getting It Right, and Why
Not every American brand is retreating. Lululemon now expects its China business to grow about 20% for the year, and Ralph Lauren saw 40% growth in China in its most recent quarter. Kentucky Fried Chicken has continued to find success in the region.
Cheris attributes those results to fundamentals rather than luck. ‘Am I coming in with a good value? Did I have a compelling product that felt locally relevant? Am I advertising and making it available in the channels and stores that are winning in that market?’ he told CNBC. For brands still struggling, he said the path forward requires building genuine local capability rather than simply exporting a global formula. ‘The key will be which brands take it seriously enough and really build enough local capability to do that, rather than just saying, “I’m going to take what I built globally and try to sell it to a Chinese consumer.”‘
Nike’s vendor overhaul and leadership change in Greater China, with Sparks now in post since January 2026, will be among the first real tests of whether that lesson is being applied at scale.
