Alibaba Group Holding Ltd is emerging as one of China’s biggest corporate winners of the coronavirus crisis, gaining the opportunity to expand its businesses and solidify its status as a critical part of the country’s socio-economic engine.
While many companies are hurting from disruption caused by the virus, Alibaba has seen traffic at its online marketplaces shoot higher and demand grow for services like food delivery. Local authorities have even turned to its cloud business to build health-tracking apps.
The company, which emerged as China’s leading e-commerce company after the 2003 SARS outbreak, is now positioning itself as a hirer and a lender too, advertising for over 100,000 jobs and offering billions of dollars in loans to small and mid-sized enterprises (SMEs) at a time when many others are retrenching.
Such moves have further embedded the firm in the lives of consumers, arguably more so than rivals like Tencent Holdings Ltd or JD.com Inc, which are trying similar initiatives but have narrower offerings.
“That’s a classic gangster strategy: When the market pulls back, one company doubles down, and then when it returns, you have the whole market,” said Jeff Towson, a professor of investment formerly at Peking University.
“It’s something I haven’t seen ... any other company do at that scale,” he said of Alibaba’s plan, announced in March, to lend $282 billion to SMEs in 2020.
It is pattern being repeated in the United States, where technology giants Amazon.com Inc and Microsoft Corp have been able to weather the coronavirus storm better than smaller peers and concurrently reinforce their position, not only in the market but in the fabric of society itself.
But that also signals that big tech companies like Alibaba are only going to get bigger, potentially stifling smaller firms, analysts said.
To be sure, it is not all good news for Alibaba. E-commerce growth is slowing overall, with the company posting a loss of $1.09 billion on the value of outside investments in its most recent quarter during which the virus impact was most acute.
Still, online merchants said Alibaba was able to use the crisis to pull further ahead of newer rivals like Pinduoduo Inc, building on earlier moves to promote services like livestreaming which soared in popularity with both users and merchants due to travel curbs.
The Insight Partners is a one stop industry research provider of actionable intelligence. We help our clients in getting solutions to their research requirements through our syndicated and consulting research services. We specialize in industries such as Semiconductor and Electronics, Aerospace and Defense, Automotive and Transportation, Biotechnology, Healthcare IT, Manufacturing and Construction, Medical Device, Technology, Media and Telecommunications, Chemicals and Materials.
Severity: Warning
Message: count(): Parameter must be an array or an object that implements Countable
Filename: amp/news_details_amp.php
Line Number: 252
Backtrace:
File: /home/smartmarketnews/public_html/application/views/amp/news_details_amp.php
Line: 252
Function: _error_handler
File: /home/smartmarketnews/public_html/application/controllers/Amp_controller.php
Line: 41
Function: view
File: /home/smartmarketnews/public_html/index.php
Line: 315
Function: require_once
Smarter Decisions with Smart News
Smart Market News is committed to getting its readers the latest updates and insights on industries that help in making “smarter” business decisions. With insights and inputs from corporate decision makers, we bring you the stories of adopting innovative solutions and strategies that have been changing the world. Our editorial insights on products, solutions, companies, and adoption of best practices not only help in understanding the markets better, but also prove to be a complete package for your information needs.
media@smartmarketnews.com | sales@smartmarketnews.com
Contact Us