Once a leading force in China's "panning for gold" boom, some American brands known for their presence in China are now facing loss of clientele.
According to a report by the American consumer news and business channel CNBC on August 21, China was once one of the most attractive and fastest-growing markets for many American brands. However, things are changing in recent years. Companies such as Nike, Starbucks, and General Motors have seen a decline in their operations in China. CNBC attributes this change to geopolitical tensions, increased local competition in China, and a disconnect between the needs of some American companies and the demands of Chinese consumers.
Bain & Co.'s global retail business leader, Aaron Cheris, said that China has a huge market size. Therefore, in the past, "all brands wanted to enter the market." However, some companies failed to adjust their strategies in time due to changes in the Chinese market's structure and demand.
"Rather than asking what problems exist in the Chinese market, it's better to ask why similar changes haven't happened in other parts of the world." Chester said. He believes that US brand price markups are often "worthless" for Chinese consumers, while Chinese brands typically have faster innovation cycles and more mature domestic sales channels.
July 27, 2026, Shenyang: Citizens are choosing Nike shoes at a direct-sale Nike store. Visual China
Nike is one of the brands that has been significantly impacted. Since 2021, its Chinese business has shrunk by 30%, and this spring's annual revenue reached its lowest level in eight years. China used to be one of the fastest-growing regions for Nike, but now more and more consumers are turning to domestic brands. Jiang Yaling, founder of the consumer research company ApertureChina, once even described that Nike has become "insignificant" in China.
This is not a sign of a general decline in China's sports consumer market. According to GlobalData data, the Chinese sports clothing market has more than doubled over the past decade. Nike is adjusting its sales channels in China, but the company still cannot predict when growth in its business in China will resume.
Starbucks also faces fierce competition. This American coffee giant entered the Chinese market in 1999, and by 2015, China had become its second-largest market globally. However, in recent years, cheaper local brands have rapidly expanded. Currently, Luckin Coffee has more stores in China than Starbucks does. Starbucks subsequently formed a joint venture with Bower Capital to operate its business in China, hoping to revive sales with local expertise.
The changes in the automotive industry are even more pronounced. General Motors could still generate around $2 billion in profits each year from its operations in China in 2018, but it has been operating at a loss for consecutive years from 2024 onwards. Ford is also adjusting its business in China; its sales volume in China decreased by 32.4% between 2018 and 2022. At the same time, Chinese consumers are shifting rapidly towards new energy vehicles. In July this year, new energy vehicles accounted for 65.1% of all newly sold passenger cars in China, compared to 54% a year ago.
However, CNBC pointed out that not all international brands have lost appeal in China. Lululemon expects its business in China to grow by about 20% this year, Ralph Lauren’s growth in China was 40% in the most recent quarter, and KFC continues to perform well. Procter & Gamble stated that its market share in China has increased for the first time in 15 quarters.
Chris believes that the differences in corporate performance ultimately stem from fundamental business issues: whether the products are worth their cost, meet local needs, and can reach sales channels that are favored by consumers. American companies that wish to reverse their business in China need to establish real local capabilities, rather than simply bringing “globally developed products to sell to Chinese consumers.”
