Seventeen years ago, the outbreak of SARS was spreading rapidly across China, and the Alibaba workforce had gone into quarantine. At the time, Alibaba was only four years old and it was unclear whether the young start-up would survive. Suspending operations would have dealt a devastating blow to the company. But Alibaba employees packed up their desktop computers and telephones, carried piles of documents home and began to work.
The crisis was, in hindsight, a transformative moment for the company. During the outbreak, Alibaba launched Taobao, its first consumer-facing platform and now the world’s largest retail online marketplace. In doing so it proved that in times of crisis, challenges can be turned into opportunities so long as there is optimism, determination, and a common purpose.
Today another novel coronavirus has struck the world and we are facing an unprecedented public health crisis. As businesses and entrepreneurs from across the globe confront immense challenges, Alibaba has again moved to help small and medium-size enterprises (SMEs) address business roadblocks posed by the COVID-19 pandemic, and to keep essential services flowing.
The digital economy represents a departure from the traditional zero-sum-game business model with its focus on shared value creation.
Immediately after the outbreak of COVID-19 in China, the company announced 20 measures to support businesses hit by the pandemic. When stores in China were forced to close, merchants from a wide range of industries turned to Taobao Live in a bid to reach their consumers online, thus maintaining sales. Meanwhile, farmers from China’s rural areas embraced it to sell their produce.
Freshippo, Alibaba’s “New Retail” grocery chain, helped bring fresh goods to urban consumers, allowing shoppers to place orders directly through its app and select contactless delivery options. DingTalk, the online collaboration and communications tool, launched features to enable over 200 million workers from more than 10 million companies to stay connected. On average, over one million active classroom sessions were held over DingTalk each school day in March 2020.
Although the current pandemic has had a severe impact on the global economy, the digital economy has proven instrumental in the battle against COVID-19. As founder of Alibaba, Jack Ma, noted, those who had already embraced internet technology in the past had the advantage of being able to fast-track their business growth; the ability to leverage digital tools has become a must for businesses to survive the ongoing crisis.
We need to help entrepreneurs better leverage the digital economy and create solutions to solve the problems of their communities so that they can have a chance to survive the crisis and even thrive in the long term.
The Alibaba Global Initiatives (AGI) team under the Alibaba Business School recognizes this urgent need to encourage and empower entrepreneurs and SMEs. To that end, we have created a handbook to share lessons learned from Alibaba’s efforts to combat COVID-19 and to serve as a resource for entrepreneurs around the world as they look to use new digital technologies to rise above the outbreak.
The pandemic has accelerated the process of digital transformation across almost all sectors. As the world slowly but steadily shifts to the recovery stage, we’ve also seen that the pandemic has brought on changes to consumer behavior that are likely to stay for good. The question then becomes how we can empower entrepreneurs to leverage digital tools and innovations while navigating the pandemic.
What opportunities should entrepreneurs on a path to recovery have their antennae tuned into, to adapt to new consumer behaviors using digital tools?
First, it is clear the digital economy will play an increasingly important role in the recovery of the global economy post COVID-19. As reflected in the response in China, an ecosystem built upon the digital economy is resilient, nimble and able to rapidly adapt to change.
The digital economy represents a departure from the traditional zero-sum-game business model with its focus on shared value creation. The digital services that people relied on during the outbreak like online marketplaces, cashless payment, contactless delivery and livestreaming will almost certainly become ubiquitous now. In building an ecosystem, entrepreneurs need to adopt a platform approach that can enable multiple players to solve issues together.
Secondly, the ability to build new systems from the ground up could accelerate the rise of SMEs and entrepreneurs from emerging markets and put them in a more advantageous position in economic recovery post-COVID-19. This presents enormous opportunities for entrepreneurs across these markets.
Within the AGI entrepreneur networks in Asia and Africa, we’ve already seen many success stories by entrepreneurs who have turned to digital solutions amidst COVID challenges. eFounder fellow Davis Musinguzi, who runs an Uganda-based telemedicine company, has expanded his 24/7 call center, pivoted his business to create an e-commerce platform for PPEs, and consolidated his company’s pharmacy delivery services.
Elsewhere, two Rwandan eFounders, Nadia Uwamahoro and Origiene Igiraneza, launched eShuri Platform and O'Genius Panda, two digital education platforms to help Rwandan students receive education online during the pandemic. Josha Aragon and Steve Sy in the Philippines helped deliver fresh produce from farm to home via Zagana, an e-commerce platform inspired by the Taobao Village model witnessed on the eFounders Fellowship Programme, a joint UNCTAD-Alibaba Group project helping entrepreneurs in developing countries become catalysts for the digital transformation in their home nations.
Those leveraging digital technology are not only in a position to adapt their own businesses to meet new challenges, but also to help others and lead the path to recovery. RumaKita, a national collaboration platform founded by Daniel Lim from the Netpreneur Training Program, is supported by a number of eFounders and Netpreneurs in the logistics and manufacturing spaces in Malaysia. The platform was created to source, allocate and deliver much-needed resources to frontline healthcare organizations effectively and efficiently.
SMEs are the backbone of any society for job creation and economic contribution. They are the pathfinders during the journey to economic recovery.
The benefits of the digital economy will also see mass entrepreneurship spur on social mobility, and there will be greater economic participation from marginalized populations.
Our company's experience has shown how the digital economy can be integral in opening up new opportunities and driving inclusive growth – having created more than 40 million direct and indirect job opportunities in China and enabling tens of millions of SMEs and startups via its platforms.
Moreover, the increased adoption of remote work as a result of COVID-19 also opens new opportunities for entrepreneurs to rethink their organizational structures as their access to talent will be expanded beyond physical borders.
SMEs are the backbone of any society for job creation and economic contribution. They are the pathfinders during the journey to economic recovery. Those among them who can pivot their venture and team to adopt digital technologies and enable their customers, partners and the local community will have the best opportunity to survive and thrive in the long term.
Although it is hard to predict a recurrence of the virus and the lasting impact of this pandemic, the future we envision post-COVID is one where people and businesses are prepared and enabled through technology. Whether it is to continue business operations or maintain access to essential needs, the digital economy will play a crucial role in all aspects of our lives. This is the brave new world we will have to create together, and now is the time to empower and work with entrepreneurs to help build it.