Microsoft has reportedly closed its retail stores in China. However, customers can still purchase products through partners and Microsoft’s online store.
The South China Morning Post claims that Microsoft will focus on channel sales, strengthening partnerships with third-party retailers and increasing its online presence.
The move marks a major change in the way Microsoft does business in the world’s second-largest economy, and could potentially signal a broader sales strategy that could be applied globally.
Microsoft closes Chinese stores
Although it currently ranks as the world’s most valuable company, with a market cap of $3.413 trillion, Microsoft’s portfolio encompasses more than just hardware. Compared to Apple, which is overshadowed by Microsoft with a market cap of $3.377 trillion, the company’s Surface hardware has not proven to be as popular.
The declining interest and disappointing profits from physical stores may also be partly responsible for Microsoft’s decision to close all of its Chinese stores.
The South China Morning Post Microsoft Inc. cites three unnamed distributors who say Microsoft’s stores have been given until June 30 to close. The stores, which operate as franchises, were previously exempt from the company’s 2020 decision to close more physical stores globally. Key locations in London, New York City, Sydney and at its Redmond Campus currently remain open.
In addition to closing its stores in China, Microsoft has also relocated employees out of the country and offered them jobs in the US, Australia, New Zealand and Ireland.
Company CEO Brad Smith also revealed during a recent congressional hearing that China represents only 1.5 percent of Microsoft’s total revenue, raising questions about Microsoft’s future in the country.
Ny Breaking has asked Microsoft to confirm some details about the reports, but the company did not immediately respond.