American sneaker brand Nike is expected to announce a revenue decline for the sixth consecutive quarter in its fiscal 2026 first-quarter financial results. Can Taiwanese sports shoe manufacturers rely on new brands to compensate for sluggish sales in the United States and rising competition from China?
BY CHARO WU, COMMONWEALTH MAGAZINE
Having witnessed several consecutive quarters of declining revenue at Nike, the company’s retired top executive, Elliott Hill, returned in October last year as president and CEO. Soon thereafter, he launched a “Win Now” marketing strategy to restore brand momentum by readjusting the product portfolio.
Although Nike’s share price has recovered about 30% this year, manufacturers in its supply chain remain pessimistic, as stock analysts do not expect the company to return to growth before the second half of next year.
“We estimate that it will take two years before we see a recovery,” says a footwear entrepreneur who does not wish to be named.
While younger sneaker brands such as On Running, a Swiss brand backed by tennis legend Roger Federer, and California-headquartered Hoka are gaining ground, established names like Asics and New Balance have successfully reinvented themselves. Yet the combined business from all of them remains a fraction of the volume Nike once ordered.
“The biggest indicator for the Taiwanese footwear industry is Nike’s market share,” notes Jim Chen, CEO of King Steel Machinery Co., a Taiwanese elastomer equipment manufacturer.
Taiwan remains a crucial node in the global sports shoe supply chain, supplying advanced elastomer machinery, knitting technology, and high-performance materials to both Western and Asian brands. Companies such as Feng Tay, Pou Chen, and Eclat Textile have shifted focus from mass production toward smart manufacturing, automation, and material innovation, helping them maintain competitiveness amid rising labor and compliance costs.
Sales in the United States are sluggish, prompting hesitation among brands to raise prices. An executive with a shoe manufacturer points out that revenue might drop by 20% next year.
While Nike is ordering less than in the past, quotations have remained unchanged. In contrast, Puma, Adidas, and Skechers are demanding cuts of between 5% and 10%. Adidas has even urged contract manufacturers and footwear accessory makers to absorb a 6% price cut.
In the wake of the coronavirus pandemic, footwear brands diversified production, with many relocating to Indonesia. But this year, Indonesian manufacturers are facing overproduction challenges due to weakening global demand. Some factories have laid off workers or implemented rotating days off. Tainan-based Nike contract manufacturer Ching Luh Group laid off more than 1,000 workers at its Indonesian factory in March.
The overproduction has led to cut-throat price competition. Willing to sacrifice profits to gain a foothold, Chinese footwear factories have been securing orders by quoting low prices.
Currently, Nike holds a 30% sneakers market share, followed by Adidas at 10%. Younger brands account for single digits. Taiwanese-owned companies, constrained by the higher costs of ESG compliance and environmental audits, are unable to compete through price cuts alone. Meanwhile, Chinese manufacturers — more agile and increasingly focused on research and development — are moving to capture orders for high-end athletic footwear.
Anta Sports and Xtep International exemplify China’s climb up the value chain. Once low-cost producers, both have evolved into vertically integrated brands with their own design and R&D teams. Anta now develops and markets products globally, while Xtep has shifted from contract manufacturing to investing in materials innovation and athlete sponsorships to elevate its profile.
A footwear industry insider believes that sneaker brands will increasingly rely on short supply chains, seeking out Taiwanese and South Korean manufacturers for collaboration due to their strong R&D capabilities. “Once new brands grow stronger, they will also emulate Nike by demanding better manufacturing equipment,” analyzes Jim Chen.
Sam Deng, editor-in-chief of online sneaker news website KENLU.net, notes that when it comes to running shoes, On and Hoka are stealing the show. Hoka has built a carefully defined brand with a full product lineup, while On — bolstered by celebrity endorsements and a minimalist design centered on its distinctive round cushioning pods — has surged in popularity.
Asics, seeking to regain ground, is targeting niche segments with new products. Nike, though it still boasts several signature models, has struggled to inject the same sense of freshness into its lineup.
It will take at least two years of observation before a verdict is reached on the new CEO’s strategy. Deng predicts: “Nike needs to run at double speed to catch up.”
This article first appeared on the CommonWealth Magazine website in September 2025. It has been reprinted, with editing and updating, with permission from the publisher.
