Microsoft has been forced to slash the price of their Microsoft Office Suite by 70 percent in China because of rampant piracy.
According to the Financial Times in the UK, the promotion brings the cost of Office Home and Student 2007 down to $29. Despite wanting royalties for their own products, the Chinese by majority, steal software instead of buying authorised copies with the Chinese Government doing little to eradicate the problem, said one analyst. According to the Business Software Alliance, the piracy rate for personal computer software in China is more than 80 percent.
Microsoft claim that they saw a “very good pick-up” in sales for their Office offering after they slashed the price in June and are now seeking to test how consumers responded to additional reductions, said Garth Fort, general manager for business operations and marketing in Greater China.
Quoting Fort, The Financial Times said, “There was feedback from our retail partners that they think there is actually a lot more demand at lower prices, so this is an effort to test the hypothesis. In China … there is actually a pretty significant market for high-quality counterfeit goods that sells itself as genuine. We need to figure out how to tap into that with the real product.”
The difficulty of persuading Chinese consumers to pay for products easily available in pirated form has meant Microsoft has in the past put limited focus on retail strategy.