The harsh winter has arrived, and the numbers are piercingly cold. An era has thus come to an end.

Recently, Nike released its latest financial report: group revenue of $11.2 billion, down 4% year-over-year; net profit of $712 million, down 2%. At first glance, it does not look too alarming, but when broken down, beneath the surface, all is not well.

Its largest single overseas market, China, generated revenue of $1.18 billion, a year-over-year plunge of 22%, or 26% at constant currency, marking the ninth consecutive quarter of decline.

Even more striking is what lies beyond the financial report. Nike unveiled a transformation plan codenamed "Pace": starting from fiscal year 2028, its four global regions will be compressed into three. Greater China will no longer be listed separately, merging with Asia-Pacific into "Asia-Pacific and Greater China," with the leadership team relocating to Singapore.

This means that on Nike's organizational chart, the name "Greater China," which has existed independently for many years, will exit the stage of history.

Looking back nine years ago, in 2017, Nike also compressed its global regions, yet it made a sole "exception" for Greater China. Nine years later, that exception has been abolished.

I cannot help but reflect with some sorrow on how unpredictable the world is. Just a few years ago, Nike was still the protagonist of China's apparel industry. In fiscal year 2021, Greater China revenue was $8.29 billion, up 24% year-over-year, making it Nike's most lucrative cash cow globally. Back then, a pair of AJs required a lottery to buy, a Dunk could double in value on resale, and of the first pair of sneakers on young people's feet, eight out of ten bore the swoosh.

Some may ask: from $8.29 billion to now just $1.18 billion a quarter; from consecutive growth to nine straight quarters of diving—what exactly happened in these few years? In short, three words: heaven, earth, and people.

First, heaven's timing: the wind of deglobalization has begun to blow. In the past, Nike's approach in China was "global thinks first, China executes"—headquarters set products, narratives, and channels, while China was responsible for selling them well. This approach rode the tailwind of globalization, but now the wind has shifted. When the globally unified product development cycle cannot keep up with the pace of local brands capturing trends; when "global standards" begin to lose to "local speed," this logic can no longer hold.

Second, earth's terrain: China's national trend has risen. ANTA Sports Products Ltd (SEHK: 2020) had revenue of 80.2 billion yuan in 2025, ranking first in the Chinese market for four consecutive years; the combined revenue of ANTA, Li Ning Co Ltd (SEHK: 2331), Xtep, and 361 Degrees reached 135.1 billion yuan, already surpassing the sum of Nike and Adidas AG (ETR: ADS) revenues in China. Rivals are getting stronger, while Nike itself is growing old. In recent years, what still sells are the same old faces—AJs, Air Force 1s, and Cortez—rehashed with new colorways and passed off as new releases. What about domestic brands? ANTA's nitrogen technology, Li Ning's Boom, Xtep's carbon plates—each generation outdoing the last, and at more reasonable prices. In the 300 to 600 yuan range, domestic brands give you carbon plates plus full-length cushioning; at the same price, Nike offers only basic, stripped-down models.

Third, people's alignment: Nike's sales channels have been ruined by its own hand. Nike's channels are in trouble. It reclaimed online sales rights from Topsports and Pou Sheng, partners of 27 years, terminating online cooperation effective January 1, 2027, and taking everything direct-to-consumer. Ruthless. But ending a 27-year partnership just like that sent Topsports' stock price plunging over 20% that same day. More critically, after cutting off distributors, its own online presence failed to stand up—pricing chaos, lost shelf space, and the vacated positions were directly filled by ANTA and Li Ning. Citigroup stated bluntly: this pivot will cause Nike to further lose share in China.

This scene at Nike precisely confirms the ancient saying: "They rise swiftly, and they fall swiftly." Peter Bernstein wrote in "Against the Gods": Companies prosper or decline, stock markets boom or crash, wars and depressions—everything cycles, but they always arrive when people are caught off guard.

No matter how big a company is, channels and brands are never secured once and for all. No matter how deep the moat is dug, if it cannot keep up with change, it may dry up overnight.

The key moments in a company's development are often just a few steps: one step forward is happiness, one step back is twilight. When the era abandons you, it truly will not even say goodbye!