Salesforce expands footprint into China with Alibaba partnership

FILE PHOTO: The company logo for is displayed on the Salesforce Tower in New York City, U.S., March 7, 2019. REUTERS/Brendan McDermid/File Photo

(Reuters) - Inc CRM.N said on Wednesday it will partner with Chinese e-commerce company Alibaba Group Holdings Ltd BABA.N, as the U.S. cloud-based service provider looks to make inroads into the Chinese software market with its products.

"Alibaba will become the exclusive provider of Salesforce to customers in mainland China, Hong Kong, Macau and Taiwan, and Salesforce will become the exclusive enterprise CRM product suite sold by Alibaba," the company said in a blog

The Customer Relationship Management (CRM) platform that San Francisco-based Salesforce intends to sell in the regions include Sales Cloud, Service Cloud, Commerce Cloud and Salesforce Platform, the company said.

Partnering with Alibaba, which has a large cloud service business itself, offers Salesforce access to China’s vast online population via its marketing channels but also potentially brings Salesforce closer to full compliance with China’s laws regarding data security.

China’s Cybersecurity Law, which was approved in 2017 and has been implemented and fleshed-out in more detail gradually since then, calls for all companies conducting business activities in China to store their data inside Chinese borders.

The policy has prompted some overseas internet and software companies, such as Apple AAPL.O and Amazon AMZN.O, to make arrangements for data generated from its Chinese customers to be stored locally.

“The supporting implementation standards and guidelines of this law are fast moving and they created a great deal of uncertainty for organizations operating in China - particularly multinational companies - in terms of how to get compliant and at the same time support one of their most important overseas markets,” said Olive Huang, who tracks the CRM sector at research firm Gartner, in a company blog post.

“Salesforce’s partnership with Alibaba is another example of international cloud vendors finding solutions to offer privacy-compliant software services to serve their customers in China,” she added.

Reporting by Sathvik N in Bengaluru and Josh Horwitz in Shanghai; Additional Reporting by Cate Cadell in Beijing; Editing by Leslie Adler and Muralikumar Anantharaman