The Court of Commerce: How NBA Endorsements Are Tilting the Footwear Landscape Against Nike

The NBA Finals aren't just a battle of basketball talent—they've become a high-stakes arena for footwear brands vying to redefine their market dominance. While Nike has long been the gold standard in sports apparel, a perfect storm of rising competition, shifting player endorsements, and supply chain vulnerabilities is eroding its grip on the industry. For investors, this presents a critical inflection point: legacy brands face mounting pressure, while agile competitors and innovators are poised to capitalize.

The Endorsement Shift: Why Nike's Mindshare is Slipping

Nike's decline starts with its fading influence over NBA stars. Once synonymous with elite athletes, the brand now shares the spotlight with Adidas, Under Armour, and a wave of Chinese competitors. Take Anta, which sealed a landmark deal with Kyrie Irving in 2023—a move that not only boosted sales of its Kai 1 sneaker in North America but also signaled a broader strategy to challenge Nike's dominance. Anta's 2024 revenue surged 13.6% to $9.79 billion, driven by its NBA partnerships and a shrewd focus on domestic Chinese demand.

Meanwhile, Li-Ning has leveraged its ties to stars like Jimmy Butler and Nikola Jokić (the two-time MVP now sporting Li-Ning's Joker 1) to carve out a premium niche. Even Under Armour, long a distant third, has doubled down on grassroots campaigns, partnering with rising stars like Spencer Dinwiddie to rebuild its relevance.

Nike's stock has stagnated, down ~15% since late 2022, while Anta's shares have risen nearly 25% over the same period, reflecting investor skepticism about Nike's ability to adapt.

Supply Chain Headwinds: Tariffs and Inventory Woes

Nike's operational challenges amplify its strategic missteps. The company's reliance on China and Vietnam—a dual vulnerability—has backfired. U.S. tariffs on Chinese imports, now at 30%, and a 46% levy on Vietnamese goods (a key production hub for 50% of Nike's footwear) have squeezed margins. Compounding this, Nike's aggressive price hikes to offset costs have alienated budget-conscious consumers.

The fallout is stark: Nike's Q3 2025 gross margins dipped to 41.5%, down 3.3 points year-over-year, as overstocked warehouses forced aggressive discounting. Meanwhile, competitors like On Running and Lululemon, which emphasize premium innovation over mass-market pricing, have avoided such pitfalls.

The China Factor: Why Domestic Brands Are Winning

Nike's struggles in China are existential. Once a growth engine, its market share has shrunk as local brands close the quality gap. Anta and Li-Ning now command ~30% combined share, up from 23% in 2020, while Nike's apparel sales there are stagnant. Government-backed initiatives like the National Fitness Plan have fueled demand for affordable, culturally resonant brands, leaving Nike's premium positioning at odds with a shifting consumer base.

Nike's share has dropped from 25% to 24%, while Anta's rose from 14% to 19%, underscoring the shift in consumer preference.

Investment Implications: Diversify, Don't Depend

For investors, the path forward is clear: avoid overvalued legacy brands and bet on agility and innovation.

1. ETF Plays: Consider footwear and apparel ETFs like the Consumer Discretionary Select Sector SPDR Fund (XLY) or the iShares U.S. Consumer Goods ETF (IYK), which offer diversified exposure to both legacy and emerging players.
2. Growth Stocks: Anta Sports (2020.HK) and On Holding (ONLN.SW) stand out. Anta's NBA partnerships and domestic dominance provide a dual-growth engine, while On's tech-driven cushioning systems (e.g., CloudTec) have driven a 50% revenue jump in 2024.
3. Caution on Nike: While Nike's brand power remains formidable, its valuation risks overhang. A recovery hinges on resolving supply chain bottlenecks and winning back endorsement mindshare—outcomes far from certain.

Conclusion: The Court is Leaning Toward Innovation

The NBA Finals aren't just about who wins the Larry O'Brien Trophy—they're a referendum on who leads the footwear race. Nike's missteps in pricing, supply chains, and endorsement strategy have opened the door to competitors armed with local relevance and cutting-edge tech. For investors, the message is clear: the era of monolithic dominance is over. The future belongs to brands that can adapt—and that means diversifying portfolios beyond the old guard.

Final Take: Invest in ETFs like XLY or growth names like Anta and On, but tread carefully with Nike until it proves it can pivot. The court of commerce isn't forgiving to yesterday's champions.