Multinational tech company Alibaba is launching a sweeping programme of support for SMEs in China, to shore up struggling businesses in their hour of need. This could help propel emerging Chinese brands and manufacturers, so that they are in a strong position to export their goods easily to Europe, Australia, India and Russia as soon as the coronavirus threat fully subsides.
Putting its muscle to good use
The ‘2020 Spring Thunder Initiative’ aims to help small and medium enterprises in China succeed during the coronavirus pandemic. The move echoes Alibaba’s actions to support smaller businesses following the 2008 financial crash and recession. As delegates heard at NRF this year, Alibaba is presenting itself as strategically-geared to supporting other businesses globally, and the wider Chinese economy through its vast ‘ecosystem’ and financial and technological abilities.
Alibaba chairman and chief executive Daniel Zhang said the initiative includes, but is not limited to helping export-focused SMEs expand into new markets through ecommerce platforms AliExpress, Lazada and Tmall World. Loans, and the setting up of digitised manufacturing facilities are expected to help small companies come through the storm in better shape.
Turning danger into opportunity
“The pandemic has exacted tremendous pain to our world, but it cannot stop hope from being born,” said Zhang in a statement to launch the initiative. “We must band together with the SMEs that need the most help, and convert Alibaba’s resources into strength for the SMEs. We must turn the “danger” brought about by the pandemic into “opportunity” for SMEs to prepare for the future through digital transformation. Now is the time for Alibaba to give back to our community and to give back to our SMEs.”
How can Alibaba help SMEs in China?
Zhang has explained that Alibaba is also helping a subset of these SMEs transform and develop their business in the Chinese market through measures such as resource support, fee reductions and fast track processing.
To do this, Alibaba is activating manufacturing belts, incubating a group of “Super Producer IP” designations, and fostering 10 digitized manufacturing clusters with production output valued at tens of billions in RMB.
Alibaba will also help alleviate financing challenges for more SMEs by extending “immediate settlement” services until June 30. Ant Financial’s online merchant bank will work with hundreds of traditional banks to provide zero-contact loans to tens of millions of small and micro-businesses.
Previous relief efforts
During the 2008 financial crisis, Alibaba rolled out three major relief initiatives for SMEs to survive what was described as an “economic winter” for them. The tech giant claims that its initiatives collectively helped 40 million SMEs “bring new life to their businesses”.