Nike's global footwear production share in Indonesia will reduce from 27% to 22% by the end of 2028.

Indonesia’s new Labour Protection Law, passed on 6 October 2026, makes living-cost surveys a factor in wage setting and abolishes the 0.5 severance multiplier. This will narrow the labour-cost gap between factories around Jakarta and those in traditionally cheaper regions, raising costs for labour-intensive shoemakers. Nike is more exposed than Adidas because it relies on 45 Indonesian suppliers, compared with Adidas’s 23, and has expanded by shifting production into lower-cost regions. In 2025, two Nike suppliers closed plants in Tangerang, cut 3,500 jobs and moved production to Majalengka and Cirebon, where minimum wages are roughly half as high. As those margins erode away Nike will look elsewhere to expand. Vietnam will absorb more of Nike's production capacity, where the company already produces almost half of its footwear.