Microsoft Shutters China Retail Stores

Matthew Broersma,
Linkedin
A Microsoft Store. Image credit: Microsoft

Microsoft reportedly shuts down all branded retail stores on Chinese mainland, four years after similar move internationally

Microsoft has reportedly shut down all of its authorised bricks-and-mortar stores on the Chinese mainland, four years after it said it would close its Microsoft Stores worldwide.

In June 2020 the company said it would shutter all of its physical stores – which were modelled on Apple’s retail chain – and would instead maintain “Experience Centres” in New York City, London, Sydney, and Redmond that would not sell retail products.

A year later Microsoft changed tack and said it would recommence selling products at those Experience Centres, including the flagship location in Oxford Circus that it opened in 2019.

The company’s locations in China were not affected at the time as it relied entirely on independent third-party retailers that set up a network of branded shops under a franchise model.

Microsoft Store. Image credit: Microsoft
Image credit: Microsoft

Bricks-and-mortar

The strategy differs from that of Apple, which operates its own stores in China and continues to maintain a highly visible presence in what is one of its key markets.

The company told local media this week that it had decided to “integrate [all distribution] channels in mainland China”.

Consumers could continue to buy products and services through Microsoft’s website and certain retail partners, the company said.

Microsoft also operates storefronts on e-commerce outlets Taobao and JD.com.

The operators of branded Microsoft Stores on the mainland earlier received a notice that their contracts had been terminated and they must shut down their shops by 30 June, the South China Morning Post reported.

Political pressure

A former Microsoft Store manager in Shenzhen told the Post that he planned to continue selling Microsoft tablets and laptops as before but would no longer be able to promote his business as an “authorised reseller”.

Microsoft president Brad Smith told a congressional hearing last month that China accounted for only about 1.5 percent of the company’s global revenue.

Smith said at the time that the company has offered to relocate its 700 to 800 mainland employees overseas.

Previous reports have indicated Microsoft was offering to relocate some employees of businesses including its Azure cloud unit to countries such as the US, Australia or Ireland, amidst political pressure on US firms and those in allied countries to divest from China.