Alibaba joins peers in offering small business support

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Alibaba-logo
Alibaba’s booth at the World Artificial Intelligence Conference on August 30, 2019 in Shanghai. (Image credit: TechNode/Shi Jiayi)

Chinese tech behemoth Alibaba has unveiled a number of measures to support smaller sellers in its ecosystem as the economic impact from the novel coronavirus outbreak begins to set in, including offering service fees waivers or reductions and financial assistance.

Why it matters: The coronavirus epidemic that has immobilized China is hitting the country’s already-slowing economy, the growth rate of which has inched down to a multi-decade low (in Chinese) in 2019. Business interruption, rising costs, and consumer panic caused by the outbreak are pressuring small business owners.

  • Alibaba’s efforts to support small- to medium-sized sellers may help it to retain merchants in a battle to fend off competition from rivals like Pinduoduo.

“Now, the second battle is upon us: Economic development must continue, lives must go on and small-and-medium sized enterprises must survive.”

—Alibaba statement

Pinduoduo boosts support for smaller merchants during crisis

Details: The support program covers every major business segment in its ecosystem from its core online marketplaces, logistics, financial offerings to local life services. Merchants can apply for support as soon as their operations resume, according to the company announcement on Monday.

  • With the goal to minimize merchant operational costs, the company is waiving the platform service fee, rental fees, and commission for merchants on online marketplace Tmall, logistics arm Cainiao, and lifestyle unit Koubei for a period ranging from two to six months.
  • Low-interest loans will be provided through Mybank. The Ant Financial-backed online bank will provide 12-month free or low-interest loans totaling RMB 10 billion ($1.4 billion) to Taobao and Tmall merchants from central Hubei province, the epicenter of the outbreak. Another RMB 10 billion in loans are allocated to merchants located outside of Hubei.
  • Taobao, Tmall and Cainao have co-launched a RMB 1 billion fund for online sellers to offset rising supply chain and logistics service costs.
  • Flexible job opportunities at the company’s operations like Hema and a number of other sectors including dining, hospitality, movie theaters, and department stores are on offer to help shore up incomes.
  • All offline store operators can join Taobao Livestream without prerequisites and can use its operational tools free of charge.
  • Enterprise software Dingtalk is offering its “Work from Home” function free of charge.

Context: Other Chinese tech companies like Meituan and Pinduoduo had already announcement supportive small business measures amid the crisis.

  • Alibaba rolled out the “A100” program to help companies embrace digital transformation in January last year.