Microsoft Corp. (MSFT) has opened its main online store in China on Tmall.com in a bid to increase sales of its products and services in China.
Operated by the Alibaba Group, Tmall.com is China’s largest consumer e-commerce platform, with more than 50,000 merchants. The opening of Microsoft’s Tmall site follows the successful debut of the Microsoft Online Store (MicrosoftStore.com.cn) in China, which was launched last October.
The new site will be operated by a team in China, which will oversee merchandise, offers and promotions depending on local demand and offer more than 50 products. The online store will also offer computer accessories, which can be purchased through Microsoft resellers.
Microsoft will also initiate promotional campaigns in the coming weeks to feature news on product launches and enable consumers to pre-order and place deposits on products.
The opening of the store will help Microsoft to expand its presence and increase market share in China. Chinese customers now can easily access Microsoft products, which will likely boost sales of its Surface tablets.
Microsoft is rapidly strengthening its global presence. It is a late entrant in the tablet market and beating the competition at this point will be an uphill task. Other successful tablets such as Apple’s (AAPL) iPads, Google’s (GOOG) Nexus 7, Samsung’s Galaxy tablets and Amazon’s (AMZN) Kindle Fire already have a strong presence in the market.
According to IDC, only 30,000 Surface RT tablets were shipped in China during the fourth quarter of 2012 and its market share among all tablets in the Chinese market was just 1%. In comparison, Apple led the race with a 62% share of the tablet market in China, while Android devices held a 36% share.
As per IDC’s forecast, tablets may see an uptrend, with sales touching 282.7 million units by 2016 and Windows-based tablets capturing 10.0% of the market within the same time period.
Although Microsoft has fallen back in the tablet race, there is still time to create its own niche. Combining the functionality of a tablet and laptop, Surface can create interest and attract new users. Hence, expansion of its online store in the world's second largest e-commerce market, China, makes sense.
Currently, Microsoft has a Zacks Rank #3 (Hold).
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