The coronavirus has crippled China’s supply chains in recent weeks and taken a huge toll on Alibaba’s e-commerce platforms such as Tmall.
Alibaba platforms sell two-thirds of everything bought online in China.
The company said the virus has hit production in the economy because many workers can’t get to their jobs or perform them. It has also changed buying patterns, with consumers pulling back on discretionary spending, including travel and restaurants.
For some big brands on its platforms, such as Uniqlo, Estée Lauder and Big Eve, average daily sales since the outbreak started have plunged 40-80% compared with January to February 2019, according to data the company provides to merchants.
Since Alibaba signed a partnership with Austrade in September 2016, more than 2000 Australian brands have started selling on the Tmall site.
Wine Australia opened a flagship store on Tmall. With 49% of upper-middle class imported wine drinkers purchasing online, the store was created to provide wineries and brand owners an opportunity to access this consumer base and leverage a significant and influential e-commerce channel.
Alibaba Group Executive Chairman and CEO Daniel Zhang said: “Like all other companies in China, we were confronted with a Black Swan event soon after the start of 2020 – the novel coronavirus.
“The outbreak is having significant impact on China’s economy and may potentially affect the global economy.”
“For our e-commerce business, the delay in employees returning to work following the Spring Festival holiday is preventing merchants and logistics companies from resuming operations.
“For the first two weeks after the Chinese New Year holiday, we have observed negative impact on our commerce business as merchant operations have not returned to normal and a significant number of packages were not able to be delivered on time.”
Guangdong Province wine and spirits distributor Yvonne Ma told Hindustan Times that customers usually stock up on Kweichow Moutai LVMH’s Hennessy XO Cognac for post-Lunar New Year holiday celebrations with friends, colleagues and family members. Instead, her sales have collapsed.
“We can’t even sell a bottle of wine,” she said. “And the most horrible thing is, we don’t know when this situation will end.”
Alibaba is pulling out all the stops to mitigate the damage.
“We’ve announced a comprehensive set of relief measures that fall under six categories,” Zhang said.
“One, reduction of business operational costs on our platforms. Two, financial support by waiving or lowering interest rates. Three, subsidies for delivery personnel and raising level of logistics efficiency. Four, provision of flexible job opportunities to guarantee income. Five, additional tools for businesses to accelerate digitization. Six, remote working management for enterprises.’
Alvin Liu, Tmall import and export general manager, added: “It has always been Alibaba’s mission to make it easy to do business anywhere, and now it’s the time to commit.
“Tmall Global will stand firmly with merchants from all over the world, supporting them and uniting as one to overcome challenges and difficulties at this special moment.”