The rapid and innovative response by China’s e-commerce giants to the COVID-19 crisis offers vital lessons for businesses and governments around the world, the Harvard Business Review reports.
The way the likes of Alibaba and JD.com deployed new technologies and good old creativity to keep the supply chain going when Wuhan’s 11 million population faced a total lockdown suggests “digital-savvy retailers capable of accessing mass markets in Europe and the US can play their part in keeping the supply chain flowing”, according to an article in the HBR.
The case of Wuhan suggests the more valuable contributions can come when big e-commerce companies both leverage their digital logistics platforms and any “high-tech last-mile delivery capabilities, and from quickly engaging newly available workers with transferable skills from other sectors.”
Alibaba was first to react in Wuhan, the HBR says. In under 48 hours, it contacted all suitable manufacturing partners who reopened plants in over 58 cities during Lunar New Year to manufacture face masks and other medical supplies. Alibaba also quickly shipped critical stock to Wuhan, such as masks and hand sanitiser at guaranteed prices through its B2C and C2C platforms, Taobao and Tmall. Simultaneously, it used Alipay to collect donations from the entire country. It collected $1 million in just the first eight hours.
Along with e-commerce rival JD.com, Alibaba also rushed newly developed automated delivery systems into operation, operating smart delivery vehicles remotely from Beijing. In this way they were able to ramp up deliveries not only to homes, but also hospitals without having to put more people into the lockdown zone.
Alibaba grocery subsidiary Freshippo met a sudden spike in demand for staples like rice and flour by hiring staff from newly closed restaurants and shops to feed the supply chain. JD.com’s 7Fresh did the same. And these new hires were also used to adapt product ranges – 7Fresh, for example, ramped up production of “ready-to-cook” foods, using staff rehired from the catering industry.
In the same spirit, MTDP, a super-app restaurant delivery platform, adapted its business model by partnering with over 7,000 supermarkets to process orders and deliver everyday supplies to households.
The HBR makes the point that brands that act similarly to those that came to the aid of Wuhan’s citizens are likely to gain greatly in a post-virus marketplace, not only in terms of goodwill, but “also in their strategic competencies and opportunities”.
Sourced from Harvard Business Review