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Thursday, Oct 22, 2020

Chinese e-commerce giants Alibaba, JD.com offer support for small and medium enterprises to aid in coronavirus recovery

Chinese e-commerce giants Alibaba, JD.com offer support for small and medium enterprises to aid in coronavirus recovery

The need to support SMEs has gained urgency as businesses across China have struggled since the Covid-19 outbreak in January. SMEs, which account for more than 90 per cent of enterprises in the country, are the backbone of China’s economy

China’s leading e-commerce firms Alibaba and JD.com are offering support for small and medium enterprises (SMEs) to help revive the world’s second-largest economy, which is showing signs of recovery after being stricken by the coronavirus pandemic.

“Small and medium businesses (SMEs) are the lifeblood of an economy. If SMEs are alive, then the economy will remain alive,” Daniel Zhang, Alibaba Group chairman and chief executive, said in a staff memo on Tuesday.

“We will deploy the power of commerce and technology that Alibaba has harnessed over the past 20 years to create new supply chains, stimulate new demand, and promote new trade through a series of aggressive measures.”

SMEs, which account for more than 90 per cent of enterprises in the country, are the backbone of China’s economy. Collectively they contribute to about half of all tax revenue, more than 60 per cent of gross domestic product and account for over 80 per cent of urban employment, according to China’s central government.

The need to support SMEs has gained urgency as businesses across China have struggled since the Covid-19 outbreak in January, which prompted the central government to extend the Lunar New Year holiday, restrict travel and transport, and order a number of communities to go into lockdown.

As part of several measures announced on Tuesday, Alibaba will help export-focused SMEs expand into new markets through business-to-business e-commerce platform AliExpress, Alibaba’s Southeast Asian e-commerce subsidiary Lazada and Tmall World. In addition, it will give a subset of these SMEs resource support, fee reductions and fast-track processing to help develop their business in the China market.




Alibaba also said it will foster what it calls digitised manufacturing clusters with production output valued at tens of billions yuan. Within three years, it wants to help 1,000 factories realise direct-to-consumer sales of over 100 million yuan (US$14 million).

Zhang said the company will also help the agricultural sector through implementation of digitisation to improve efficiency.

On the financial side, Alibaba will extend its “immediate settlement” service, where merchants can get paid as soon as Alibaba receives the money from consumers, to June 30 to help alleviate financing challenges for SMEs, while Alibaba affiliate Ant Financial will work with traditional banks to provide zero-contact loans to tens of millions of small and microbusinesses.

Alibaba, which owns the South China Morning Post, is not the first Chinese tech giant to offer help to smaller players. On February 21, JD.com launched an initiative to allocate nearly 500 million yuan in support to SMEs using its e-commerce, logistics, financial, cloud and AI resources.



The Beijing-based e-commerce giant promised to lower operation costs for SMEs by providing procurement and logistics subsidies as well as helping them boost sales by launching expedited channels on JD.com, enabling them to open an online store in only six hours.

“JD has 250,000 merchants on its platform and more than 7 million small and medium enterprises among our clients,” said Luo Xiaohua, head of the JD Business enterprise platform. “We are the partner who stays the closest to SMEs so we share in their prosperity and misfortune.”

On March 10, JD Worldwide, the platform for imported products on JD.com, announced supportive measures for overseas merchants in countries such as Japan, South Korea and Italy, which have been severely impacted by the pandemic.

The company will provide marketing solutions, traffic and logistic support to help overseas businesses increase sales and improve inventory turnover, and speed up the launching process for them on the platform.

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