The COVID-19 pandemic, which has affected over eight million people globally, has severely impacted economies around the world, resulting in established and smaller businesses across the globe to shut down. Recent news reports said that more than 2,000 small F&B establishments in Malaysia closed down permanently and over 70 per cent SMEs lost half their income.
But when I look at my experience in managing Alibaba Global Initiatives (AGI) under the Alibaba Business School, this upsetting trend overshadows some steady and rare achievements several entrepreneurs have made amidst the crisis. We’ve already seen many success stories by entrepreneurs across Asia and the rest of the world who have turned to digital solutions amidst COVID challenges.
Consider the experience of Sabari, a Malaysian SME owner who attended the Alibaba Netpreneur Training Programme. Inspired by the Bainiu Village (a model e-commerce village in China), Sabari launched an online marketplace, Fregee, for farmers, consumers and retailers in Malaysia. Sabari and the Fregee team have been assisting farmers in marketing their produce by going digital since May last year.
When the Movement Control Order (MCO) was announced, farmers struggled to sell their produce and were unable to assess the demand, which essentially led to much wastage. At the same time, Lazada introduced the fresh produce category, and Sabari capitalised on this development. He worked with Lazada to get Cameron Highlands’ farmers on the platform. To avoid wastage, Fregee provided a 14-day forecast to the farmers using their data and analytics capability and helped them sell directly to both consumers and retailers.
He went further to collaborate with Touch ‘n Go to facilitate payments and worked with another netpreneur’s logistic startup, Golog, for cold chain delivery. Sabari is currently engaging with more netpreneurs and eFounder fellows (a digital entrepreneur community co-organised by the Alibaba Business School and the United Nations) to further expand Fregee's footprint beyond Cameron Highlands and the Klang Valley.
Similarly, the Malaysian Insurtech startup Policystreet's experience embodies a key advantage of being agile. When COVID-19 hit Malaysia, Policystreet moved quickly to offer food delivery riders, SMEs and the community with insurance protection against COVID-19. Furthermore, to protect the community at large, the team established a COVID-19 insurance helpline dedicated to Malaysians. By partnering with Malaysia Digital Economy Corporation (MDEC), Policystreet offered guaranteed savings to help SMEs with their insurance renewal. The platform also enabled Malaysians to renew their car insurance from the comfort of their homes.
Policystreet co-founders Wilson Beh and Winnie Chua, who are also Alibaba Netpreneurs, raised RM7.85 million in equity crowdfunding and venture capitalists during the MCO. It was the most significant amount raised on a Malaysian crowdfunding platform ever and a testament to the company's success.
We have seen many inspiring stories of Malaysian businesses transform their operations to adapt to needs during the pandemic. As the country faced a shortage in Personal Protective Equipment (PPEs) and other critical medical equipment, Kristy, an Alibaba Netprenuer and business owner of Ms. Read, and her fellow netpreneur, Daniel, founder of RumahKita platform, came together to develop a solution. They transformed a number of the production lines in the Ms. Read factory to produce PPE gowns and boots for frontliners.
Ooi, an Alibaba Netpreneur and founder of Dot2Dot Print, transformed his printing and packing business to offer new products such as face shields. Capitalising on the enterprise messaging app DingTalk, Ooi’s team was able to work from home and successfully launched new products amidst the outbreak. Jack Ma’s advice on how to adapt to the crisis also helped Ooi to restructure his team to adjust to the new ‘normal’.
Karl Loo, the co-founder of ServisHero, a home services marketplace operating in several Southeast Asian countries, decided to diversify from offering home services (which were not allowed to be provided under MCO) to virus containment services including professional disinfection and advanced antimicrobial coating services, under the brand name Disifnection2U. His services have been provided to national healthcare centres, Fortune 500 companies, private homes and public infrastructure locations and become synonymous with quality virus-containment services in Southeast Asia.
Disinfection2U by ServisHero was launched in Malaysia, Singapore and Thailand within 36 hours following the introduction of MCO – since then, Disinfection2U has established operations in Australia and South Africa with more countries to follow. ServisHero also introduced its own line of premium disinfectant products in May in collaboration with Alibaba's Netpreneur, Chun Chieh Keong, founder of IGL Coatings.
Utilising digital economy imperative
Although the current pandemic has had a severe impact on the global economy, the digital economy has proven instrumental in the battle against COVID-19.
To navigate this crisis, building new ecosystems utilising the digital economy is imperative. The digital economy is resilient, agile and can rapidly adjust to changes in market conditions, as reflected by China's pandemic response and other countries with a more integrated digital economy ecosystem.
The advantage of emerging markets, like Malaysia, is its ability to build new systems from the ground up, without the impairment from the legacy systems. In such nations, the digital economy can ensure the rise of mass entrepreneurship in place of old systems, which limits rapid social mobility and participation from marginalised groups in the formal economy.
Alibaba's experience has shown that the digital economy has been integral in opening new opportunities for over 10 million SMEs and start-ups on its platforms. Many of those are in rural areas and have limited education. According to a recent report, in 2018 Alibaba created more than 40 million jobs within its broader ecosystem; through over 800 Taobao villages in impoverished counties, farmers sell their agricultural and artisanal products to online shoppers and have added to households about RMB 2 billion (US$283 million).
The impact of the digital economy also helps in creating additional income opportunities. Leveraging the Taobao Live marketing tool, over 60,000 farmers became Taobao livestreamers, running over 1.4 million live streaming sessions that covered 31 provinces and more than 2,000 counties. Over 2,000 new rural live streamers have already achieved a monthly income of above RMB10,000 (roughly over US$1,400; eight times of the average monthly income in rural China).
As businesses and entrepreneurs from across the globe confront immense challenges, Alibaba has again moved to help small and medium-sized enterprises (SMEs) address business roadblocks posed by the COVID-19 pandemic and to keep essential services flowing. The Alibaba Global Initiatives (AGI) team under the Alibaba Business School recognises this urgent need to encourage and empower entrepreneurs and SMEs. To that end, we have created a handbook to share lessons learned from Alibaba’s efforts to combat COVID-19 and to serve as a resource for entrepreneurs around the world as they look to use new digital technologies to rise above the outbreak.
More than ever, there is a strong need for a public-private partnership to make this work effectively. Public-private collaboration can provide the right soil to nurture mass entrepreneurship and provide policy and financial support, essential to innovation. The scale of mass entrepreneurship will also allow entrepreneurs to rise to the challenges through collaborating with other entrepreneurs in the community where there are common understanding and trust.
Small and medium-sized enterprises (SMEs) are the backbone of any society for job creation and economic contribution. They are the pathfinders during the recovery journey. Those who can pivot their venture and quickly adopt digital technologies to enable their customers, partners and the local community, will have the best opportunity to survive and thrive in the long term.
We have been observing businesses disrupted by the pandemic, and the lessons it offers for SMEs are timeless. Sooner or later, nearly all business owners will battle with most of the challenges they faced during the pandemic. Entrepreneurs who rise to the challenge stay true to their mission and vision in crisis, and continue to create an impact in their communities and industries leveraging digital economy concepts and tools will play a pivotal role in accelerating Malaysia into a digital economy with the support from ministries and government agencies like MDEC and MITI.
Brian A. Wong is Vice President of the Alibaba Group
Malaysia National News Agency
No.28 Jalan BERNAMA
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel : +603-2693 9933 (General Line)
Email : email@example.com