China’s premier athletic giant, Anta Sports has altered its global trajectory by inaugurating its first North American flagship in Beverly Hills on February 13, 2026. This 3,000-sq-ft ‘brand hub’ signals a decisive transition from distributor-led exports to a high-margin direct-to-consumer (DTC) model. By bypassing traditional wholesalers, Anta aims to directly manage its narrative in the world's most competitive sportswear market. The move is strategically timed with the 2026 NBA All-Star Weekend, leveraging a newly signed lifetime partnership with NBA star Klay Thompson to anchor its presence alongside industry incumbents like Nike and Adidas.

Global multi-brand synergy

The expansion follows a robust fiscal 2025 performance, where the group reported record interim revenue of RMB 38.54 billion, a 14.3 per cent Y-o-Y increase. Anta's aggressive globalization is further fortified by its recent €1.5 billion acquisition of a 29 per cent stake in Puma, creating a powerful multi-brand ecosystem that includes Amer Sports (Arc’teryx, Salomon) and Fila. This flagship is a window into Chinese innovation, states Samuel Tsui, CEO, Anta Brand. Despite navigating potential geopolitical trade sensitivities and high SG&A investments, the brand is capitalizing on a 60 per cent sales growth in its outdoor and niche categories. By integrating community-centric programming like run clubs and athlete-led workshops, Anta is positioning itself as a cultural lifestyle destination rather than a mere hardware retailer.

Founded in 1991, Anta is the world's third-largest sportswear company by revenue, operating over 12,000 stores in China. Specializing in high-performance basketball, running, and technical apparel, the group targets dominant global market share by 2030, supported by an annual R&D investment exceeding RMB 1 billion and a 2026 revenue target nearing $10 billion.

By 2025, the EU overtook the US as the largest destination for China’s low-value e-commerce exports, highlighting a decisive rerouting of digital fashion flows. For Shein to Temu, the shift showcased more than a mere geographical reallocation, it marked a recalibration in the face of growing trade barriers and a changing global appetite for low-cost fashion.

The great re-routing

The catalyst for this change was Washington’s aggressive trade policy. In early 2025, the US intensified regulatory scrutiny around the de minimis threshold, formally codified under Section 321. This provision had previously allowed packages valued under $800 to enter the US duty-free, offering Chinese exporters a substantial advantage in the high-volume, low-value fashion segment. By August, the suspension of duty-free treatment for these parcels fundamentally altered the economics of international fashion trade, forcing a reevaluation of global sourcing and distribution strategies.

The immediate impact on US imports was swift and measurable. Chinese exporters faced new duties ranging from 15 to 50 per cent on small parcels, directly squeezing margins on items historically priced for impulse purchases. Consumer-facing platforms, in turn, raised prices by 10-30 per cent in April 2025 to offset the rising operational costs. For Shein, the impact were tangible: its US market share declined for the first time since 2021, falling from 1.8 per cent in 2024 to 1.7 per cent in 2025, while total sales value dropped 4.5 per cent.

Europe steps into the spotlight

As the American market grew increasingly inhospitable, Chinese fast-fashion giants executed a digital shift toward Europe. Advertising spend rose, with French campaigns up 45 per cent and the UK seeing a 100 per cent increase in digital media allocations. The results were pronounced: Shein recorded double-digit growth in retail sales across the EU, with France growing 26.7 per cent, Germany 31 per cent, and Spain 26.6 per cent.

Hungary and Denmark emerged as unexpected growth engines, recording user engagement jumps of up to 400 per cent, highlighting the potency of a digitally savvy, smaller-market European segment. Platforms responded strategically, with AliExpress leading at 190 million users and Shein following closely with 145.7 million monthly users. In contrast, the US market stagnated, with Temu and Shein collectively capturing just 17 per cent of the discount fashion market amid declining parcel volumes.

Table: Market dynamics: EU vs. US (2025)

The manufacturer’s perspective: From Panyu to Paris

Bob Liu, a footwear manufacturer based in Fujian province, embodies the industrial dimension of this pivot. Liu’s factory historically relied on the US for 80 per cent of its total orders, producing small parcels tailored to American sizing and style. By early 2026, the US share of his revenue had dropped to less than half, while Europe now accounts for nearly 40 per cent of his output. Europe is increasing, increasing, increasing, Liu told The Wall Street Journal.

Factories in Panyu and other Chinese fast-fashion villages have responded by realigning production lines to European sizing and tastes, developing what Liu describes as ‘Euro-chic’ designs. These adaptations are more than cosmetic; they represent a full-scale operational pivot, including sourcing materials locally where possible and optimizing logistics for regional fulfillment.

EU customs reform a coming impediment

The European boom, however, faces a new inflection point. On July 1, 2026, the EU Council will implement a landmark customs reform, aiming to level the playing field and curb the environmental and economic impact of millions of small parcels. The changes are straightforward but consequential:

• The longstanding €150 threshold for low-value consignments will be abolished.

• A flat €3 duty will apply to small parcels (under €150) sold by non-EU sellers registered under the Import One-Stop Shop (IOSS).

• The duty will be applied per item category. A parcel containing a shirt and a pair of shoes, for example, will attract a total €6 charge.

This reform has prompted platforms to rethink logistics. Temu and Shein are reportedly relocating 20-50 per cent of their inventory to domestic European warehouses, ensuring rapid delivery while mitigating the per-package duty impact. Localized fulfillment, once a luxury, is now a strategic imperative.

Lessons for India

While Europe and the US battle over Chinese imports, Indian manufacturers are closely monitoring these developments. India continues to be a critical sourcing hub for global apparel, yet there is growing concern about dumping, as goods displaced from the US market seek new outlets in Europe. The comparative advantage of Indian textile production vertical integration from cotton to garment, positions the industry to capture demand if Chinese imports face barriers, but challenges remain, including energy costs and logistics constraints.

Table: Comparative labor & trade dynamics

Preparing for volatility

As 2026 unfolds, the fashion industry faces a time of reckoning. According to McKinsey’s State of Fashion 2026, growth in fast fashion will remain in low single digits, with profit margins increasingly tied to supply chain agility. Companies that can pivot production between regions in response to policy shifts, environmental considerations, or consumer trends will outperform those wedded to a single market or distribution channel. For Shein, Temu, and the broader digital fashion ecosystem, the lesson is clear: survival is no longer about volume alone; it is about speed, adaptability, and strategic localization.

In coming years, Europe is no longer just a market, it is the lab for the next era of fast fashion. The winners will be those who combine digital reach with nimble, regionally attuned supply chains, while the losers risk repeating the American market’s costly missteps.

The high-performance footwear market is witnessing a tectonic shift as On Running operationalizes its state-of-the-art robotic assembly facility in Busan, South Korea. This move represents a strategic departure from traditional labor-intensive Asian manufacturing hubs. By deploying proprietary robotic units, the brand aims to drastically shorten lead times, which typically span several months in the conventional footwear supply chain.

The Busan facility serves as a blueprint for planned regional hubs in North America and Europe, allowing the company to move production closer to its primary consumption centers. This ‘nearshoring’ strategy is designed to mitigate the high freight costs and port congestion that have historically hampered the inventory turnover of premium sportswear brands.

Navigating tariffs and supply chain resilience

In an era defined by escalating trade protectionism and geopolitical instability, the transition to automated localized manufacturing offers a critical buffer. With the US government maintaining a hardline stance on footwear tariffs, On Running’s decentralized model provides a structural advantage over competitors reliant on centralized Southeast Asian production.

Industry analysts estimate, localized robotic production could reduce shipping-related carbon emissions by up to 30 per cent, aligning the brand with tightening ESG mandates in the European Union. Our investment in automation is a direct response to the need for speed and localized resilience, noted a company spokesperson. By utilizing localized ‘Speedfactories,’ the brand can react to consumer trends in real-time, effectively reducing the risk of overstocking and seasonal markdowns that often erode margins in the retail sector.

Strategic footprint and market trajectory

Founded in Zurich in 2010, On Running specializes in premium performance footwear and apparel featuring its signature CloudTec technology. The company primarily targets the North American and European markets, where it has seen triple-digit growth in its direct-to-consumer channel. With a 2026 revenue target exceeding $3.5 billion, On continues to expand its retail footprint through flagship stores in major global cities while maintaining a robust presence in specialty running outlets.

By 2026, the global fashion and apparel industry has arrived at a reckoning it spent the last decade trying to postpone. After years of evangelising Direct-to-Consumer (DTC) as a silver bullet, promising higher margins, tighter customer relationships and digital independence the sector has discovered the limits of absolutism. What has emerged instead is a far more pragmatic operating model: a high-stakes hybrid balance where DTC and wholesale are no longer competing philosophies but interdependent levers.

This shift marks the most consequential reordering of fashion retail since the rise of e-commerce itself. The question facing brands today is no longer whether to go direct or stay wholesale-heavy. It is how to orchestrate both channels into a single, intelligent commercial system—one that can withstand rising customer acquisition costs, volatile demand cycles and AI-driven consumer expectations.

The end of the ‘Middleman Myth’

The early DTC movement was fuelled by a simple narrative: eliminate intermediaries and reclaim margin control. In practice, the story has proven far more complex. While US DTC e-commerce sales are projected to reach $239.75 billion in 2026, accounting for nearly one-fifth of total e-commerce, this growth no longer signals channel dominance. Instead, it reflects a recalibration where DTC is being repositioned as a precision tool rather than a volume engine. Brands that have survived the DTC boom-and-bust cycle now treat their owned platforms as strategic infrastructure less about replacing wholesale, more about strengthening the entire ecosystem around it.

Why brands still go direct but selectively

The enduring appeal of DTC lies not in revenue scale but in informational power. In 2026, the most competitive brands are those using their digital storefronts as data intelligence hubs. At the centre of this strategy is zero-party data: information that consumers willingly provide in exchange for value. AI-powered style diagnostics, fit visualisation tools and virtual try-ons have transformed data capture from passive tracking into active collaboration. Unlike wholesale environments, where brands often receive delayed or aggregated sell-through data, DTC channels provide real-time insight into intent, preference and price sensitivity.

Margin resilience is another critical factor. With wholesale discounts still averaging close to 50 per cent, DTC has become a buffer against rising input costs from raw materials to logistics and compliance. Brands are no longer using DTC to undercut partners; they are using it to protect pricing architecture while funding innovation.

Perhaps the most transformative development is the rise of agentic commerce. AI-native shopping journeys already deployed by platforms such as Zalando and brands like Michael Kors now dynamically adjust product recommendations, pricing logic and merchandising flows in real time. These systems have been shown to lift average order values by as much as 26 per cent, underscoring DTC’s role as a laboratory for retail intelligence rather than a blunt sales channel.

The quiet revival of wholesale power

Even as DTC matured, wholesale never disappeared. It evolved. In 2026, wholesale has reasserted itself as fashion’s most effective discovery engine. Physical retail once written off as legacy infrastructure now plays a critical role in reducing friction, managing returns and driving brand legitimacy. For digitally native consumers fatigued by infinite scrolling, the physical shelf has regained its authority as a filter of trust.

Wholesale partnerships with retailers such as Target, Macy’s and Selfridges function as high-impact marketing platforms. In an era where digital advertising costs have surged and social algorithms have become unpredictable, these environments offer something increasingly rare: guaranteed visibility at scale.

Operationally, wholesale also remains indispensable. Bulk B2B shipments to regional hubs are structurally more efficient than managing millions of individual B2C deliveries. At a time when online apparel return rates still hover around 30 per cent, physical retail’s touch-and-feel advantage has become a material cost-control mechanism rather than a branding luxury.

Structural constraints that still haunt wholesale

Yet wholesale is not without friction. The model’s limitations are well documented and increasingly intolerable in a fast-cycle retail economy. Data opacity remains a fundamental challenge. Without direct access to the end consumer, brands struggle to retarget, personalise or accurately forecast demand. Price integrity is another pressure point. Retailers, managing their own margin and inventory risks, often resort to aggressive markdowns that can erode brand equity.

Most critically, the traditional wholesale calendar built around six- to nine-month buying cycles collides with the limited-drop, rapid-response culture that defines 2026 fashion. The result has been a forced evolution toward more flexible replenishment models, concession formats and shared-risk inventory agreements.

Table: By the numbers: how the balance is shifting

The scale of the rebalancing becomes clear when viewed longitudinally.

This table highlights while DTC continues to grow in absolute terms, wholesale remains the dominant global channel by volume. The narrowing gap does not signal replacement it signals redistribution of function.

Nike, a case study in overcorrection

No brand better illustrates the dangers of DTC absolutism than Nike.

Between 2020 and 2024, Nike aggressively pruned its wholesale network, betting heavily on its owned digital ecosystem. While the strategy delivered short-term margin gains, it produced an unintended consequence: invisibility in multi-brand environments. Without standing side-by-side with challengers such as Hoka and On Running, Nike lost contextual relevance for casual and first-time buyers.

By late 2025, the company began a visible course correction. Nike re-entered Amazon and rebuilt relationships with partners including DSW and Macy’s. The results were immediate. In Q2 2026, Nike’s wholesale revenue rose 8 per cent, validating wholesale’s role as both a pressure valve for inventory and a gateway to consumer segments that brand-owned platforms alone could not efficiently reach. Nike’s experience has since become a cautionary tale across the industry: scale without distribution diversity is fragile.

Toward radical symbiosis

By 2026, the industry consensus is clear. The DTC-versus-wholesale debate is over. What has replaced it is a barbell strategy built on functional clarity. DTC is now used for deepening housing loyalty programmes, exclusive capsules, community engagement and high-margin experimentation. Wholesale, by contrast, is used for finding delivering mass awareness, physical validation and operational throughput.

Artificial intelligence is accelerating this convergence. As agentic shopping systems blur the distinction between online and offline discovery, the most resilient brands are those that can synchronise data-rich direct channels with the expansive reach of wholesale partners. In the new fashion economy, success no longer belongs to the most digital or the most distributed. It belongs to those capable of radical coordination brands that understand retail not as a channel war, but as a unified intelligence system spanning screens, shelves and supply chains.