Curated by Alibaba Business School
Author: Kangyu Xie
COVID-19Mission & Vision
From SARS to COVID-19, Alibaba has grown up and is available to help protect others.
Outline
- How are Alibaba business units engaging in their battle against COVID-19?
- What actions have the company and its employees taken in this anti-epidemic battle?
- What combination of the collective company thinking and the individual’s attitudes make a company’s execution so effective?
In the past 20 years, there were a number of key turning points in the history of Alibaba: the experience of the SARS epidemic and the battle between Taobao and eBay in 2003, the creation of Alipay to provide a more trustworthy transaction payment method in 2004, the establishment of Alibaba Cloud and the launch of the first Double 11 shopping festival in 2009, and the birth of Cainiao Smart Logistics for global delivery in 2013.
If you ask any Alibaba employee why Ali-day (May 10th every year) is dedicated for families of employees and why Alibaba organizes group wedding ceremony on that day, he/she would joyfully answer that it relates to the SARS epidemic in 2003 during which all Alibaba staff and their families combated SARS together. And one of the reasons for Taobao rapid rise was due to fact that people had to stay at home and at the same time needed to buy things.
Jack Ma has also mentioned many times in his public speeches that the battle with SARS was an important sign that Alibaba had grown up. Besides the cause and effect relationship between Alibaba’s growth and SARS, there’s no other logical explanation that links the two. In truth, any startup company encountered a crisis like SARS, would have likely responded in a similar way like Alibaba, and the result of its growth would have been similar.
Alibaba’s combat with SARS in 2003 was considered as the best action for a small-sized company confronting a major crisis. The main achievement of Alibaba was not how it donated and helped the society to fight against the epidemic, but its growth after surviving the crisis.
Now in 2020, Alibaba has taken responsibility as a large company amidst the COVID-19 outbreak. And its key achievement is how Alibaba has gone all-in in the battle against the epidemic with all of its resources and how it has redefined the role and responsibilities of an enterprise.
In 2003, the newly-born Alibaba had to assure itself not to be defeated by the epidemic.
In 2020, the large Alibaba seized its responsibility to help the larger society fight against the COVID-19 outbreak.
We are not going to review all of what Alibaba has done in the past 2 months, although there are many outstanding actions. At the beginning of the crisis, Alibaba set up a RMB 1 billion anti-epidemic fund which was the largest amount to date among all the enterprise level donations. In February, Jack Ma himself helped China source anti-epidemic materials globally, and now he is returning the favor to help other countries in the same way, a complicated operation in itself.
Because Alibaba now is so large, it’s difficult to track the many contributions its various basis have made in battling the COVID-19 outbreak, even Alibaba staffs can’t remember everything the company has done in this time. This is because many of the Group’s business units including Hema, Alipay, Cainiao, Alibaba Cloud, Tmall, B2B, Customer Service, have all taken initiative to fight against COVID-19 by uniting together. And they are doing best to contribute by leveraging their unique resources capabilities to help in some way.
What an Internet company can do during the outbreak can be concluded in 4 points:
- Donate materials (Alibaba Group, Cainiao Logistics)
- Support people’s daily consumption (Hema)
- Support merchants in need (Alipay, Tmall, B2B, Customer Service)
Provide open technology resources (Alibaba Cloud)
All these actions above are partly under the direction of Alibaba leaders, and partly from spontaneous actions of different business units, and even individual staffs. The company seems to integrate two contradictory traits at the same time: to maintain consistency from the top to bottom (in the same way Alibaba treasures its corporate values), and acknowledge and encourage the autonomous thinking and spontaneity for each individual staff. Alibaba tries its best to maintain the collective consciousness and individual freedom all at the same time.
If two seemingly contradictory conditions can co-exist in one entity, it works well. It is not unlike an harmonious marriage that exists in simple daily life. In order to continuously maintain the freshness of love, the elements of collective consciousness and individual freedom should be both co-exist. This is also the guarantee for a large company not to lose its essence.
Alibaba always said it is going to be a company that can last 102 years. The 20-year old Alibaba is quite young comparing to 102 years old. But as a Chinese company which has experienced 2 cycles of catastrophic risk, it is old enough. As the first batch of Aliren including the 18 founders who experienced the SARS epidemic in 2003 with Jack retired, very few of senior Aliren are still working the current company.
Now the Alibaba belongs to the new generation. The real reason we are discussing Alibaba in light of the COVID-19 outbreak is that we want to help people understand how Alibaba can maintain its freshness and vitality after being established 20 years.
A mini Alibaba sprouts from the epidemic
Cainiao Logistics Network, which defines the upstream resources in logistics, was the first Alibaba business team that drew nationwide attention even before the lock down in Wuhan. Cainiao dedicated 400 hotlines to collect the requests for COVID-19 related resources from all over the country, particularly from the Hubei province. Cainiao has also launched a green channel to fast track the delivery of the much needed resources purchased through Alibaba’s global sourcing platform. These actions taken by Cainiao provided the critical resources that the frontline hospitals needed in late January and early February. By February 1st, Cainiao enabled the delivery of 300,000 units of life saving items donated by 9 provinces to Wuhan Xiehe Hospital. This was a huge confidence booster to the hospitals as well as the society and widely praised by the public.
Even as early as 26th January, a truck loaded with 100,000 masks arrived in the Dong Xi Hu district in Wuhan at 5am in the morning. Alibaba and Cainiao started mobilizing the resources and stakeholders even earlier than that.
These masks were the first donation Alibaba Group sent to Wuhan. They left Anhui at 7pm the day before. Through the green channel, they arrived in Wuhan in less than 24 hours.
In comparison, the donations sent out on the same day to Wuhan Xiehe hospital through a different channel did not arrive until January 31st, 5 day later.
This would not have been possible without the support from the 25 employees who worked hard to source the masks from social organizations and the smart logistics network which leveraged AI to mobilize close to 80% of the logistics resources.
And this was just one gear in the huge Alibaba machine. At almost the same time Cainiao launched the green channel, Alibaba also announced the All-in strategy to support Wuhan.
Apart from setting aside a dedicated RMB 1 billion fund to source medical resources and ensuring the operation of logistics services to deliver supplies to Wuhan, Alibaba also mobilized the business teams to ensure the supply of food, masks and other essential products to the public living in Wuhan.
In fact, even before the announcement from the group level, Alibaba’s business units and employees in Wuhan have already started to respond to the outbreak.
The Aliren in Wuhan were the first to act. Without leaders or organizations, they took their own initiative to protect the city they called home. Their individual acts were self-initiated.
Huang Hui who works in a Hema store in Wuhan was one of these employees. As the outbreak escalated, more and more customers came in to empty out the shelves. He worked hard to constantly restock the shelves to ease off the panic buy situation from the customers.
To support the frontline healthcare staff who did not even have time to eat their meals, Huang Hui drove his own car to deliver lunch boxes to the local hospitals.
In a city that was overwhelmed by the pandemic, a lot of real pressing challenges surfaced during the peak period in early February.
There was a shortage of medical supplies, so the Alihealth employees looked for medicine, masks and protective wears day in and out. The transportation system had come to a halt and the healthcare staff could not commute to and from work. The Aliren in Wuhan organized themselves to take turns to drive the healthcare staff to and from work. Some of the healthcare staff could not get back to home as they take around the clock shifts. The Fliggy employees would contact the nearby local hotels to provide free accommodations to the healthcare staff.
These volunteers used Alibaba Daily report and meeting system to create SOPs and standardize these self-driven rescue activities. A mini Alibaba was born and expanded in the city.
Soon after that, the business teams behind these individual employees started to mobilize themselves. Similar to the Wuhan rescue team, these business units very quickly started to operate and manage without any direction from the company group level.
Hema promised that they would not stop their operation in Wuhan nor would they increase the price on 22nd January. Since then, they increased the stock supply to Wuhan many fold compared to the normal times. With the support from Hema’s HQ in Shanghai, they mobilized the much in demand disinfectant and soap from Shanghai to Wuhan.
Three days before Wuhan’s lock down, the outbreak news spreading through social media caused panic in the public and masks became the most sought after products overnight. To prevent chaos on the platform, Taobao issued an urgent announcement to the mask sellers on both the Taobao and Tmall platforms that they could not inflate the price of masks. Alibaba was the first ecommerce platform to publicly urge the merchants to control their prices.
The outbreak happened during the Chinese New Year festival when most people had booked tickets to go home or go on holiday. The turn of events saw many people cancelling their travel plans including flight tickets. Fliggy was the first to issue the refund notices on multiple channels including Alipay on 21st January even before the airlines issued their refund policies.
In order to mobilize the resources to support the COVID-19 battle, 1688.com, Alibaba.com and other business units created a joint task force to coordinate the mask suppliers in China and overseas. At the same time, the factories on the Alibaba supply chain also called their workers back to start the production.
Two days after that, Tmall Supermarket joined hand with Cainiao and ShuiFeng to setup the first emergency warehouse dedicated to medical supplies. The supply of masks could be delivered directly to the consumers bypassing the logistics centers at the provincial and city levels. This operation significantly shortened the delivery time to the consumers.
Launch a product within 13 hours
Running faster than the Alibaba group, industry peers, and the formulation of government directives, there lies a platform with a business mechanism operating with a flat hierarchy. This platform enables unexpected innovations and can quickly turn ideas into reality.
During the days when the epidemic was spreading, every business unit in Alibaba was grappling with the question: What can we do to fight against this epidemic?
It was January 26, the second day of the Chinese New Year and around 1:00am, the teams of Alipay and Ant Insurance were still actively debating what practical protection can they provide for medical staff? After serious discussion, everyone agreed to offer a free health insurance to frontline medical staff.
Around that time, there were also some organizations which provided medical personnel with a certain amount of insurance coverage, but the usual model required the relevant departments or charity organization to provide a name list. This model had two problems: one, there is no way to directly reach the medical staff; two, under the current situation, this arrangement would increase the workload for related departments and public welfare organizations.
Therefore, in terms of product design, Ant Insurance took the approach to allow medical staff to collect the insurance directly from Alipay, which could then bring direct assurance to medical staff once they purchase.
What’s more, in this epidemic, the protection provided by many institutions for medical staff was only effective on the condition of “death”. In other words, only when medical staff lost their lives due to infection with coronavirus, could they get compensation. In contrast, the health insurance fund of Ant Insurance covered the medical staff who have had confirmed diagnosis.
Think and decide, decide and act. On the second day of the Chinese New Year (January 26th), a team of about 50 people of Ant Financial, located all over the country, all resumed working from home. The project kicked off at 13:00, and several teams including engineering, PD, UED, legal, finance, PR, customer service, etc. all started to work independently. The product pre-released at 23:00, and fully released at 2:00 am on January 27.
Just 1 hour after launching online, 10,000 people signed up. 100,000 people in 4 hours, and more than 1 million people in 3 days.
In the past, the chain of insurance product development was very long. Generally, building an influential commercial product takes half a month to one month time in average, from project approval, evaluation, actuarial, to claims service and risk control system. While with this medical staff protection project, it took Ant Financial staff only 13 hours in total from project approval to launching online.
According to Ben Tan, the product owner of the team, the most heard one sentence in the whole process is “Give me one minute, I will solve it.” After this battle, we all become one team.
“In general, interaction design job only starts after the business requirements are confirmed, and visual design after the interaction design is confirmed. But this time, the interaction design has started while the business requirements are still to be confirmed, and so does the visual design. All collaborative work goes in parallel, everyone is taking the initiative to cover the position and race against time to ensure that the project goes online quickly. “Project UED designer Qing Cang said.
When others lamented that the Alibaba people were really a group of workaholics, everyone in the team only felt that they were pushed forward by a spirit of “If not now, when? If not me, who?”. With a strong sense of purpose, they’ve accomplished the mission.
In such moments of epidemic outbreaks, there are examples of Alibaba’s “on fire” stories that emerged from many different business units.
A few days before Wuhan city lockdown, a key Alibaba business related to everyone’s daily life, “Eleme’, the company’s “local life “delivery service, had been discussing internally about whether this epidemic would affect consumers ’dining and grocery shopping access.
On January 25, the first day of the Chinese New Year, Wang Lei, president of Alibaba local life service, asked new retail business team: “Can we think of a way to supply fresh food in Wuhan?”
Fresh e-commerce is the larger end of new retail business. This new business, which was established only in August 2019, was pushed to accelerate at a rapid rate in the fight against the epidemic.
Put forward ideas, make quick decisions, and solve problems quickly. “In the thick of things, we break through barriers, one by one. Solve one problem, and move to the next. Many of these challenges we encounter for the first time. We must make quick decisions and solve them quickly with the limited resources, “ said Ban He, the fresh e-commerce business owner.
At that time, Wuhan city was locked down, and many offline wet markets had closed due to the Chinese New Year holiday period. Ban He and his team wondered if they could use some new methods to solve the problem like self-pickup, perhaps it’s a good meth.
In fact, before this epidemic, Eleme had already been planning to offer fresh food self-pickup service in second and third-tier cities, and the sudden outbreak quickly put this business on track. Ban He said that during this week, the entire team only slept for four to five hours a day.
The business model was decided on the first day of the Chinese New Year, prepared on the second day and on the early morning of the third day, this new service was officially launched for business.
The first problem to be solved was finding self-pickup points. At that time, the first thing that came to Eleme team’s mind was contacting the local partners, starting from the convenience store. But then the team found that there are not many convenience stores open during the Spring Festival.
After that, Eleme team tried to find some bakery stores, but still ended up with the same problem. Later, Eleme tried to contact the local government, hoping that the local government could open the property management offices and neighborhood committee property management offices as self-pickup points.
After continually calling district mayors and Commissions of Housing and Rural and Urban Construction, the problem was finally solved.
The supply chain is another big problem. The original main suppliers were wet markets and online service providers, but most of them had closed during the Spring Festival. In this case, the Eleme fresh food team had to start rushing to take in fresh food stores with higher operating rates in the residential community.
Alignment of individual thinking is the alignment of collective action. Everyone is focused on the big goal of solving the same key problems. When everyone faces every problem in an aligned way, things get solved more quickly.
Internal Collaboration
On the other side, Ban He realized that many B2B companies providing products to companies also had a lot of inventories, especially frozen food products, hence it would be a good idea to also include these products into the supply chain.
The Fresh Department under Ele.me found a local company called WanDunTong, which used to partner with Alibaba Cloud and Ant Financial. It had its own cold storage as well as food products delivered by cold chain logistics, which met the expectation of Ele.me.
However, this company had not done any B2C business before, and Ele.me had no local staff to assist. In a hurry, Ban He came up with the idea of “borrowing local staff” from HEMA and Cainiao to help WanDunTong to streamline the operation process.
This was simply an idea brought by Ele.me which had nothing to do with the KPIs of HEMA, Cainiao and other business units, and it was a risky idea. Why would people agree with it by the end? “Actually, I don’t think I need to say anything at that moment. Everyone shared the same goal.” During the cross-departments collaboration, Ban He felt very efficient and smooth.
Besides sharing the same goal, the business relationships also became stronger partnership because they shared a common problems they all wanted to solve.
Alipay went to Ele.me, and asked whether some cities can help deliver masks, Ele.me went back to ask Alipay how many fresh markets are reachable through their payment system, Ele.me went to seek out AMap (Alibaba Group’s digital mapping company) and asked them to add the pick-up service locations to the city maps…. These partnerships of solving “mutual problems” are happening everyday among Alibaba’s business units. This has also become a point of attraction in working together to create new value together.
This partnership model has even been introduced to companies outside of Alibaba. For example, HEMA created the “shared staff” movement with external partners.
A store is in urgent need of labor, while an employee is at home waiting to restart work. On the February 3rd, Hema and various catering companies began to cooperate with each other. The first batch of employees came from restaurants like Yun Hai Yao and New Century Youth Food and Beverage, who couldn’t go to work because of the epidemic. They started to work in HEMA and were able to take part time jobs while waiting out their other job deferments..
When the news came out that night, it caught a lot of attention. Hema’s HR department point of contact Mr. Ma, suddenly received and onslaught of calls.
After Hema launched the cooperation with restaurants including Yun Hai Yao, Xi Bei, Tan Yu and Youth Food and Beverage, gradually, overall 32 enterprises, ranging from hotels, theaters, shopping malls, ride-hailing and car rental companies all started to join the partnership. as of February 10th, more than 1800 employees joined Hema and started to work on a “borrowed” basis.
Some of these “borrowed” employees helped solve the problem of labor, while some solved the problem of insufficient logistics capacity. On February 8, Dazhong transportation started to help deliver products for Hema Shanghai. The next day, more than 200 deliverymen from another eCommerce platform joined Hema to help as well.
Hema’s “shared staff” movement has attracted many peers to join. At this moment, Hema is still in a special development period: a start-up that enters the fifth year of its business needs enter its sprint phase in development.
We know that a start-up goes through several stages of development: In the first three years, a business model shall be established ; during the 3rd to 5th years, one must scale the business to the next level; during the 5th to 8th years, it’s time to enter the profitability period as efforts are harvested, and during the 8th to 10th years, entrepreneurs shall pay special attention the challenges brought by macro economy risk and figure out how to adjust the company’s life cycle as an enterprise
Many start-up companies fail to enter Series C in their third year, or are not able to enter the key period of going public in the fifth year, or gain no profits in the eight year, or suffer from the shock of their first round of risk cycles.
Of course, every company and every industry has its own unique characteristics. In the fifth year, Hema did not need to go public, and it had made a round of expansions in advance in its third year. However, in the end, Hema needed to expand again in its fifth year.
We have seen that after the “shared staff” model become popular, Hema released news that it would recruit 30,000 people this year. Hema will incubate another business model, the mini stores, besides the existing offline super markets, which will witness a least 50 new stores to open this year. And the Hema Fresh Stores will continue to explore second-tier cities this year.
Hema’s participation in combating the epidemic is a bit like an early “military exercise” before the expansion this year. During the epidemic, the orders on Hema have witness 6 times increase. Though still having some interruption in its delivery, after this fight, Hema has come out stronger and more capable than before.
Get everyone involved spontaneously
In Alibaba, almost all departments have been involved in the fighting against the epidemic. On March 5, Alibaba launched the “zero billing period” method to help sellers quickly withdraw funds. Meanwhile, Taobao, together with Ant financials MYBANK, provided loans of RMB 50-100 billion to small and medium-sized enterprises such as catering, agriculture, e-commerce sellers, etc. On March 13, Alibaba Cloud announced that its AI technology would not only support the domestic anti-epidemic initiatives, but also it would open COVID-19 detection technology access to medical research institutions, Centers for Disease Control and Prevention or other organizations around the world, free of charge.
Alibaba was not defeated by the SARS epidemic 17 years ago. 17 years later, Alibaba and the larger society fought together against the COVID-19 epidemic. Within a 2 month period, Alibaba has taken more actions than can be tracked.
How could Alibaba have done so much in its anti-epidemic efforts? These actions come from the integration of individual will and collective consciousness.
The novel coronavirus can penetrate into the cells and endanger human life. If we want to defeat the epidemic, we need to do a good job in two ways. On the one hand, through medical technology we must eliminate the virus in the human body, and strengthen people’s immune system. On the other hand, we should aggregate all the people and resources of the entire society to fight against the epidemic.
There is also the combination of people and organizations. On the one hand, we should find ways to transform a group of individual people into an organization with a common goals and strong execution ability, On the other hand, we need to find ways to develop each individual person, constantly optimize their abilities, and invigorate each individual with energy and passion.
Alibaba is well known for its mission, vision and values, and Alibaba developed its organization system in past 20 years. As a result, organizational consciousness and individual will can be relatively balanced and shared together.
Alibaba’s anti-epidemic efforts are actually two anti-epidemic stories. One is Alibaba as a company, supports the whole society to fight against the epidemic. The other is every Alibaba employee does their best to fight against the epidemic.
The company contributes the company’s resources, and the individual contributes his/her ability. Once individual strength and organization are integrated, it created the powerful execution ability during any crisis.
After all, what problem cannot be solved if you liberate the power of the individual to contribute in the best way possible? This is the key creating a culture and community of individuals that can help solve the challenges of today and those of the future to come.
Alibaba Business School’s vision is to empower entrepreneurs, women and youth globally through the education and training programs on the digital economy and the benefits it brings to larger society.
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