Zoom to stop direct sales in China

Company says it will only provide video conferencing services through third-party partners in mainland China from later this month

Zoom to stop direct sales in China
Image: AFP.

(ATF) Zoom, the video conferencing software group, said on its official Chinese website on August 3 that it will stop selling new products or upgrade existing products directly to customers in mainland China. In the future the company will only provide video conferencing services through third-party partners in mainland China.

A report on Huanqiu.com, a news website set up by the People’s Daily and the State Council, posted a picture of the announcement (in Chinese).

Zoom customers in China got this message: "Dear customer, thank you for choosing our service. We would like to inform you that we will only continue to sell services in mainland China through our partners. If you need to use online video conferencing, please contact our partners."

It is reported that this rule change will take effect on August 23. 

It is worth noting that in May this year, Zoom changed its rules to only allow corporate customers to register for accounts in China. Free users who registered earlier are no longer allowed to initiate meetings, but they can still join meetings initiated by corporate customers.

"In the past, our marketing model in the Chinese market included direct sales, online subscriptions, and sales through partners. Two months ago, we stopped online subscriptions." Zoom wrote in its notice to users.

"Currently we are transforming to a model that is limited to sales through partners: these partners have embedded Zoom technology in their products, and they will provide you with better localised services."

Three partners in China

Zoom has three recommended partners in mainland China – Bizconf Communications, Suirui Zhumu Video Conference and Systec.

Zoom is a company established in the United States. Its founder, Eric Yuan, was born in Tai'an in Shandong Province, but later emigrated to the United States and became a US citizen. He worked as an engineer for Cisco, and was reportedly one of the team that developed WebEx software.

Zoom Video Communications Applications Inc was launched in 2013 and now has tens of millions of users. The group – based in San Jose in California – developed one of the most popular software programmes for teleconferencing and online meetings.

The company has boomed since the coronavirus spread – it was said to be worth $35 billion in April, The Financial Times reported.

Eric Yuan allegedly made nearly $4 billion in three months as use of his software exploded. His personal wealth has been put at about $7.6 billion.

Zoom now has over 30,000 corporate clients including Samsung, Uber, Walmart, and Capital One, according to Forbes.

Concerns were raised in June about the company's dealings in China, with researchers claiming that Zoom routed data through China, but the firm made changes to address this.