How SARS made Alibaba a $470b company
Way back in 1999, when China was emerging as a prolific production and manufacturing resource center, Alibaba was founded as an innovative online B2B platform for Chinese businesses looking to connect and sell their goods to other enterprises globally.
This proved to be a winning formula, with Alibaba providing the ideal platform at the time to connect Chinese businesses with foreign companies for commerce, just as websites like eBay had launched a nascent C2C platform in the US earlier in the decade.
Shaped by another coronavirus
What started in founder Jack Ma’s small Hangzhou apartment with a team of 18 grew to 400 by 2002. Alibaba was beginning to turn a profit and was now preparing to launch its first C2C platforml, Taobao.
Then later that year, a novel coronavirus that came to be known as SARS broke out in the country, and for the first time in the internet age, China was forced to deal with a large scale shutdown of its manufacturing sector. Workers and shoppers stayed home in droves, causing retail sales to plummet.
Alibaba’s planned launch of Taobao was in jeopardy when in mid-2003, the company was forced to quarantine its entire workforce after an Alibaba employee contracted the SARS virus. At a time before tech advancements allowed for easier remote working experiences, Alibaba staff took their desktop computers home to keep Alibaba’s B2B platform up and running.
Meanwhile, Ma and a core team returned to Ma’s apartment to complete the development of the consumer-oriented Taobao site, and this proved to be a telling moment in the company’s history.
The self-imposed quarantine restrictions were causing Chinese consumers to turn to the internet to procure items for the first time, launching the wider acceptance of e-commerce in the mainland a year after eBay had entered the Chinese market.
Taobao was launched on May 10 2003, competing with eBay by enticing users with a new promotional model: sell their goods on Taobao and the company would not take any commission or seller fees from sales for three years. By 2006, Taobao had overtaken eBay as the dominant C2C platform in the country, and that shift in SARS-related consumer attitudes helped turn Alibaba into the e-commerce juggernaut it is today, with over US$56 billion in yearly revenue and over 600 million users on the Taobao platform alone.
Alibaba: Giving back as a company
There are numerous parallels between the SARS epidemic of 2002-2003 and the COVID-19 coronavirus outbreak of 2020: both diseases originated in China, and both caused consumers to change expectations towards online shopping to fill a physical retail gap.
Since that earlier outbreak, Chinese tech giants have matured in scale, and in social responsibility. When reports of COVID-19 became known, Alibaba was one of the first private companies to contribute towards China’s research ad relief efforts.
Alibaba Cloud, the company’s cloud division, lent its AI and cloud computing capabilities in the field of genome research to the government, helping study methods to prevent the spread of the disease and to expedite development of a vaccine.
And despite declines in revenue of its core businesses, Alibaba has funded efforts (via the Alibaba Foundation and the Jack Ma Foundation) to cooperate with other countries and medical professionals to provide up-to-date information and guidelines on COVID-19 findings from China’s top medical experts, on the free medical resource platform Global MediXchange for Combating COVID-19 (GMCC).
In addition, the e-commerce giant has helped to alleviate the burden on overworked health workers with its AliHealth app. Hosted by more than 1,000 medical professionals, the app was receiving upwards of 3,000 consultation requests per hour during the height of China’s pandemic response.
With numerous enterprises impacted by the virus, Alibaba Cloud further revealed its Global SME Enablement Program to assist small and medium enterprises (SMEs) with over US$30 million in tech relief in the form of cloud-native solutions. Alibaba’s financial affiliate, Ant Financial’s MYBank unit is offering 20 billion yuan (US$2.9 billion) in loans to companies in China to help keep them economically solvent.
Alibaba is demonstrating what the organization has learned, and the company’s values that were built following the trials of the SARS ’03 outbreak. As former chairman, Jack Ma said during the launch of the GMCC, “We can’t beat this [latest] virus unless we share our resources, know-how and hard-earned lessons.”