A person walks past a Microsoft logo in the Microsoft office in Beijing, China on Aug. 4, 2020.
Thomas Peter | Reuters
BEIJING – Microsoft’s China arm announced a strategic partnership with Chinese retail technology company Hanshow on Thursday to work on cloud-based software for store operators worldwide.
The deal marks Microsoft’s latest foray into a retail industry that is forced to accelerate an online relocation. The integration of offline into internet-based sales strategies is known as omni-channel retail and includes the delivery of food, the demand for which has increased significantly in the wake of the coronavirus pandemic.
Retail is one of the industries that has seen some of the biggest disruptions in recent years, said Joe Bao, China Strategy Officer at Microsoft, at a signing ceremony at the software company’s Beijing offices.
The partnership is not only intended for the Chinese market, but also to bring China’s technology overseas, Bao said, according to a CNBC translation in Mandarin. He said the agreement comes after Microsoft has worked with Hanshow for five years.
The American software company came to China in 1992, where it has its largest research and development center overseas. The strategic partnership arises when US and Chinese companies operate in an increasingly tense political environment centered on trade and technology, in part in response to longstanding foreign criticism of unfair Chinese business practices.
Currently, Hanshow’s main customers are supermarkets in China and Europe.
The company says its products include electronic store shelf labels that can reflect price changes in real time, and a system that helps staff reduce the time it takes to package products for delivery. According to Hanshow, it is also selling a cloud-based platform that allows a retailer to simultaneously see the temperatures of fresh products in stores around the world.
The partnership includes collaboration in the field of Internet or Internet of Things technology.
Under the contract, Hanshow will use Microsoft’s Office 365 software such as Word and Dynamics 365, a cloud-based customer relationship management system, Gao Bo, chief architect at Hanshow, told CNBC in an interview after the signing ceremony. He said the two companies can share their global network of customers and will jointly set up a research and development team.
Hanshow was founded in Beijing about a decade ago and has offices in Germany, France, the Netherlands, Denmark and Australia on its website. According to the company, Hanshow has just opened a subsidiary in the USA.
Globalization is one of Hanshow’s key business strategies, according to a CNBC translation, Gao said in Mandarin. He claimed that the company’s first step in entering a foreign market is to understand local laws and culture, and that his own work has not been significantly affected by international trade tensions.
“Offline businesses are not going to die out,” said Gao, adding, “the uncertainty in the future is how high the ratio will be.”
