With Sales Slowing, China's Ecommerce Giants Pivot to Coronavirus Assistance

As the Chinese government takes steps to contain the coronavirus outbreak—like extending the Lunar New Year holiday, canceling transportation, keeping schools closed and encouraging companies to allow employees to work from home, China's two ecommerce giants, Alibaba and JD.com, are responding with efforts of their own. Daniel Zhang, CEO of Alibaba, has called the coronavirus outbreak a “black swan event” that will significantly impact company revenue. In the quarter ending Dec. 31, 2019, Alibaba's revenue was $23.19 billion, up 38% year-over-year. China’s overall economy is already taking a hit. This week's massive declines across global markets--a loss of $6 trillion over the last six days--were overwhelmingly due to fears over the growing epidemic. So, as retail sales slow, Alibaba and JD are using their technology, supply chain and economic power to combat the outbreak. [article_summary section="1"]Developing new diagnostic tools [kickout id="1"] On Feb. 21, Alibaba said it had developed an AI algorithm that can identify coronavirus cases. Based on 5,000 CT scans, the platform said its algorithm can make a diagnosis within 20 seconds, with a 96% accuracy rate. Alibaba is also working with the Zhejiang Provincial Center for Disease Control and Prevention on analysis and diagnosis. Its cloud computing arm has offered to work with global research institutions to speed up viral gene sequencing, protein screening and the search for treatments. This, said Dr. Sun Yin, head of the Zhejiang CDC, is narrowing the diagnostic criteria to confirm cases and will hopefully lead to the development of vaccines and other drugs. In addition, Alibaba Cloud has developed IT management platforms for government departments to help track and share information about the outbreak, including case reporting and chatbots that provide information on infection prevention. In a similar vein, a smart epidemic assistant from JD was integrated into the WeChat account of the Mayor’s Office in Wuhan, the capital of Hubei province and epicenter of the epidemic. Services include screening, medical advice and inquiries into whether a plane or train had a coronavirus patient on it. JD said the assistant can respond to queries, such as what to do if you are experiencing symptoms, and how to properly wear and dispose of face masks. On the first day, it had over 250,000 visits and has since expanded to six provinces. Ecommerce platform JD Health has also launched free online medical consultation services with doctors and a new online platform to help patients with chronic diseases maintain their drug supply during the outbreak. [article_summary section="2"]Donating items and logistics [kickout id="4"] Both platforms are also soliciting and transporting donations of medical supplies, including 5 million masks, 500,000 gloves, 40,000 sets of protective clothing, 20,000 goggles, 7,000 cases of disinfectant, 30 tons of intravenous drips and 40 tons of food. On Feb. 6, Alibaba announced a business-to-business sourcing platform that matches sellers and their products to the needs of hospitals and local authorities. To encourage donations, the online retailer published an open letter, saying, “No matter where your goods are, we will deliver them to frontline medical personnel in the fastest and safest ways.” Meanwhile, JD’s cloud and AI unit launched an Emergency Resources Information Platform to provide municipal and medical institutions access to online suppliers and emergency logistics services. This also helps match supplies with institutions in need. On Feb. 14, online supermarket JD Super donated 630,000 adult diapers and 2,000 packages of feminine care products for the over 100,000 workers in Hubei province. JD quoted a doctor in Wuhan saying, “The protective suits can only be worn once, and we don’t have enough of them. To save resources, we have to try not to use the restroom once we put on the suits. The adult diapers can really help us during this hard time.” A week later, JD installed 75 massage chairs in hospitals in Hubei and it worked with berry brand Driscoll’s and an apple supplier to donate 1,500 cases of blueberries and raspberries, as well as 1,320 cases of apples to hospital staff in Wuhan. Expedited shipping and customs clearance [kickout id="5"] The platforms are leaning into their supply chain management capabilities to transport donations from abroad as quickly as possible—and they’ve even worked out expedited customs clearance at airports and seaports. Alibaba’s logistics arm Cainiao launched a logistics hub called the Green Channel to speed up deliveries of donated supplies. It also opened a 6,000-square-meter (65,000-square-foot) warehouse in Wuhan for storing and dispatching goods. JD, too, is building a supply chain management platform tailored to the needs of the Hubei provincial government to better distribute supplies, and it is working with organizations around the world to deliver donations as quickly as possible. That includes transporting 1,800 sets of medical protective clothing, nearly 8,500 pairs of gloves and 70 pairs of goggles from the U.K. in less than three days. Keeping workers safe as factories resume business [kickout id="3"] [kickout id="2"] As employees return to work from the extended Lunar New Year Holiday, JD provided smart body temperature screening systems at railway stations in 10 cities, including Beijing and Tianjin. The body scanners have infrared sensors capable of detecting the temperature of a moving group of people in real time. When a high body temperature is detected, it triggers an alarm. JD also used drones to spray disinfectant as a protective measure in Ordos City in Inner Mongolia. “Each drone can carry 10 liters of disinfectant at a time,” according to JD. “With a flight radius of 5 km [3 miles], using drones enables the city to cover a wider and more thorough area than they would be able to cover with human personnel, in a shorter period of time.” It wasn’t immediately clear if JD has plans to spray disinfectant in any other locations. A spokesperson said JD chose the site because there were about 800 families that weren't allowed to leave a compound for a month. The drone technology was previously used to spread fertilizer and pesticides on crops, but reconfigured for disinfectant before the community reopened. [kickout id="6"] [article_summary section="3"]Meanwhile, Alibaba touted its cloud-based technology and platforms such as communication and collaboration app Dingtalk, which added features to “enable instant communication and remote teamwork, including video conferencing, livestreaming for over 300 participants, cloud-based document editing and approval, and daily health surveys for employees.” It said the features are free for over 200 million workers from more than 10 million organizations. Dingtalk also added 100,000 cloud servers to support demand for cloud-based communication for remote workers. In addition, more than 600,000 teachers are using Dingtalk’s livestream feature to interact with students. JD’s cloud video conferencing service is also free for enterprises and individuals, and it is offering a free online classroom service for students and teachers in Hubei who are unable to go to school. [article_summary section="4"]Temporary work for customer service staff Many workers in public-facing roles in restaurants, hotels, movie theaters and retail aren’t back at work yet, so JD plans to offer 35,000 jobs during the epidemic, including: 20,000 positions such as warehouse workers, pickers, couriers and drivers at JD Logistics 10,000 couriers for on-demand delivery platform Dada Now 5,000 pickers and packers for local on-demand retail platform JD Daojia thousands of part-time customer representatives for JD In addition, JD’s supermarket chain 7Fresh has implemented its own “talent-sharing” plan to hire short-term staff from businesses that are temporarily closed. Similarly, Alibaba’s supermarket Freshippo, along with online food delivery service Ele.me and local commerce platform Koubei, are also helping employees in public-facing industries find temporary work. Alibaba’s shopping sites Taobao and Tmall, along with logistics platform Cainiao, launched a 1 billion yuan fund ($142 million) to give couriers extra compensation and to provide waived fees and subsidies for companies. JD has announced its own initiative to provide nearly 500 million yuan ($71 million) in subsidies and resources for small- and medium-sized businesses.