Alibaba helps itself by aiding small firms amid the virus crisis

February 13, 2020 09:38
Alibaba Group has announced measures to help the online merchants and small businesses affected by China's coronavirus outbreak. Photo: Reuters

E-commerce giant Alibaba has announced a multi-billion yuan "relief package" to help Chinese firms hit by the coronavirus outbreak.

Among the measures, the platform fees for merchants on Tmall marketplace will be waived for the first half of 2020.

Also, Alibaba will operate online shops on behalf of merchants from Hubei province, the epicenter of the epidemic, for free for three months.

New merchants joining its Cainiao courier service will see a waiver of the warehousing fee for two months.

The firm will also make available 20 billion yuan for lending to companies in China. Half of that will go toward Hubei firms.

Meanwhile, Alibaba’s Hema grocery unit will expand its worker-sharing program with hotels, cinemas, shopping malls and other sectors. The arrangement is about temporarily taking on staff from these businesses that have to shut down amid the outbreak, thus reducing their wage expenses.

All these measures announced by Alibaba are far beyond the usual scope of a private business, but they make a lot of commercial sense.

The fact is, everybody is in the same boat in this outbreak. Alibaba derives most of its profit from hundreds and thousands of online merchants on its platforms. If a large number of these merchants are forced to go out of business due to the crisis, Alibaba would lose its revenue streams.

Ensuring the well-being of its merchants is, thus, in Alibaba's own interest.

This article appeared in the Hong Kong Economic Journal on Feb 12

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist