Salesforce shutters Hong Kong office, leans on Alibaba in China

Salesforce is repositioning itself in China as it looks to expand the reach of its customer relationship management software in the country.

The company is “accelerating” its strategic partnership with Alibaba, a Salesforce spokesperson told TechCrunch. In 2019, Alibaba became the exclusive provider of the American giant’s software across Greater China.

As a result of its tightened partnership with Alibaba, Salesforce is “optimizing our business structure to better serve the Greater China Region” and “opening new roles while eliminating some others,” the spokesperson said.

The company’s career page shows it’s currently hiring a product management director and a senior software engineer in the southern Chinese city Guangzhou, where it placed its tech team.

It’s unclear what positions Salesforce is cutting in China, but the spokesperson confirmed that the firm is closing its office space in Hong Kong, which has historically been a springboard for multinationals to enter China. Many roles at Salesforce’s Hong Kong office are in sales and account management, LinkedIn profiles show.

It’s also unclear how exactly its relationship with Alibaba is evolving. Alibaba did not immediately respond to a request for comment.

Salesforce’s interest in China lies in serving international businesses localizing in China, but it can’t do it alone due to the country’s intricate regulatory restrictions.

As China introduced new rules to control data handling across borders over the past few years, international tech giants have scaled back their presence in China or exited the market completely: LinkedIn, Yahoo, and Airbnb, to name a few.

Last year, Salesforce and Alibaba launched a joint product to help brands scale up their social commerce presence in China. The use of social networks such as WeChat to drive e-commerce sales, dubbed social commerce, has become a norm in China.

“Salesforce Social Commerce is intended to be built and hosted in China on Alibaba Cloud, one of the world’s top three cloud providers and the largest in APAC, to help support the level of scalability needed for China’s ever-growing commerce ecosystem and to help customers address local data residency regulations and compliance concerns,” Salesforce said at the time.

Salesforce could also potentially woo China’s e-commerce exporters who are fleeing centralized marketplaces like Amazon for self-hosted stores. But it has not shown visible effort to attract this crowd, while its competitor Oracle offers a one-stop shop for export-led sellers to handle data analytics, digital payments, and more. That said, Shopify is an affordable go-to solution for most sellers seeking independence from Amazon.

A report by Chinese business publication Ebrun reported on Wednesday that Salesforce has “disbanded” its China unit, which oversees the firm’s business in mainland China, Hong Kong, and Taiwan. Alibaba will be taking over the firm’s sales in mainland China and Hong Kong, while Taiwan will fall under the management of its Singapore office, the report said.

When asked to verify these claims, Salesforce’s spokesperson pointed to the statement provided to us (mentioned above).

“We look forward to continuing to serve our customers in Greater China and helping to drive their success,” the spokesperson added.

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