Microsoft is shutting down its brick-and-mortar stores in mainland China and shifting its focus to online and partner channels to better serve its customers, according to media reports.
On Tuesday, a Microsoft spokesperson confirmed to the Global Times via email that the company continuously evaluates its retail strategy to meet dynamic client demands. Microsoft has decided to enhance its channel approach in mainland China as part of this ongoing assessment. Despite the closure of physical stores, customers can still access the full range of Microsoft’s consumer products and services through retail partners and the Microsoft website.
Liu Dingding, a Beijing-based distributor of Microsoft products, told the South China Morning Post that Microsoft’s sales model in the Chinese market had not been profitable enough to justify the necessary investments despite strong consumer spending and market performance in China. He emphasized that the adjustment would not significantly impact Chinese consumers or Microsoft’s business, as the country’s developed e-commerce system and logistics network can sufficiently meet retail demands for Microsoft’s hardware products.
Additionally, the South China Morning Post reported that Microsoft’s authorized physical stores received notice to close by June 30, following the termination of their contracts. Unlike Apple, which operates its own stores in China, Microsoft relied on independent third-party retailers to maintain its network of branded shops. The exact number of affected local partners remains unclear.
Analysts have pointed out in different media reports that Microsoft’s decision does not indicate a broader trend among U.S. companies operating in China. For instance, Apple recently launched its Vision Pro augmented reality device in China, highlighting the country’s importance to its global strategy.
At a recent U.S. congressional hearing, Microsoft Vice-Chairman and President Brad Smith disclosed that China accounts for only 1.5 percent of the company’s global revenue. Smith also mentioned that Microsoft is offering relocation opportunities to its 700-800 employees in China.