Microsoft Shuts Physical Stores in China in Shift to Online-Only Sales

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As of July 1, Microsoft had 187 bricks-and-mortar retail stores in China

Microsoft Corp. has closed all its remaining bricks-and-mortar retail stores in the Chinese mainland as part of its global strategy revamp to shift retail operations online.

The American tech giant had terminated all its authorized stores in China by June 30, retaining only offline locations for after-sales services and its online storefronts on Taobao and JD.com, according to a person claiming to be manager of a Microsoft store in Zhengzhou, Henan province, who wrote online.

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Microsoft has closed all its physical retail stores in mainland China, focusing on online sales and maintaining only after-sales service locations.
The shift aligns with a global strategy initiated in June 2020, which expected to cost $450 million in pre-tax expenses and maintain online sales channels and select Experience Centers.
Microsoft's Surface products hold under a 3% global market share, facing strong competition in China, with sales not significantly impacted by store closures, per Counterpoint Research.

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Who’s Who

Microsoft Corp.: Microsoft Corp. has closed all its bricks-and-mortar retail stores in the Chinese mainland to focus on online sales, maintaining only after-sales service centers and online storefronts on Taobao and JD.com. The shift aligns with their global strategy initiated during Covid in 2020, focusing on higher-margin, premium products. Despite a 17% drop in personal device revenue and competitive pressures, Microsoft aims to streamline operations for better market efficiency.

Lenovo: Lenovo is a leading player in the global PC market, with shipments growing by 8% in the first quarter of 2024, capturing 24% of the market. This makes it the largest market share holder in the PC industry.

HP: According to the article, HP maintained a stable share of the global PC market at 21% in the first quarter of 2024. This information comes from Counterpoint Research, which noted the overall market growth by approximately 3% year-on-year.

Dell: According to the article, Dell maintained a stable share in the global PC market at 16% during the first quarter of 2024. The global PC market began to recover with overall shipments growing by about 3% year-on-year. Dell's position in the market was discussed along with other key players like Lenovo, HP, Apple, and Acer.

Apple: According to the article, Apple’s shipments increased by 2%, holding a 5% share of the global PC market. Despite the overall market recovery, Apple's growth remains modest compared to competitors like Lenovo, HP, and Dell.

Acer: According to the article, Acer ranked fifth in the global PC market with a 3.7% market share in the first quarter of 2024. Acer is one of the key players, competing alongside Lenovo, HP, Dell, and Apple for market position.

Huawei: The article mentions Huawei as one of the competitors Microsoft’s Surface products face in the Chinese market. However, it does not provide further specifics about Huawei's performance or market share within the context of Microsoft's retail strategy shift.

Xiaomi: The article mentions that in the Chinese market, Microsoft's Surface products face stiff competition from various indigenous brands, including Xiaomi. However, no specific details about Xiaomi's market performance or strategies are provided in the article.

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What Happened When

2009：: Microsoft opened its first offline retail store in the United States.

2015：: Microsoft abandoned its phone business and slowed down the expansion of offline retail stores due to lukewarm sales of its Surface laptop.

June 2020：: Microsoft announced it would close all offline retail stores globally and shift entirely to online sales, except for Experience Centers in London, New York, Sydney, and Seattle.

First quarter of 2024：: The global PC market began to recover with shipments growing by about 3% year-on-year.

April 2024：: In an earnings call, Chief financial officer Amy Hood saw Microsoft’s personal device sales continue to decline in the second quarter.

By June 30, 2024：: Microsoft had terminated all its authorized stores in China, retaining only offline locations for after-sales services and online storefronts on Taobao and JD.com.