On January 23, 2020, the Chinese Government started quarantine in the city of Wuhan, where the coronavirus epidemic began. 11 million people quarantined and all roads were closed to traffic. The quarantine lasted 60 days.
In a city like Quarantine Wuhan, where the retail industry is huge, this has caused serious problems. Quarantine made an impact as if the retail industry had been stabbed. People quarreled after quarantine, after people panicked and unloaded on shelves in markets. In other words, everyone bought enough food and agreed to stay at home.
In this period, we will look at the strategies that China’s two largest retail giants, JD.com and Alibaba, have followed for 2 months to supply enough products to people under quarantine. We can explain the quarantine strategies of these two companies with the concepts of innovation and flexibility.
Drone Delivery – Driverless Vehicles
In this process, Alibaba became the first company to mobilize the digital logistics platform. In less than 48 hours, companies producing all masks and health products in 58 different cities were contacted. More attention was paid to the provision of critical products, such as masks and disinfectants, and prevented an exorbitant increase in the price of these products. In the first 8 hours of the quarantine, a 1 million dollar donation was collected through Alipay, an online payment system on Alibaba.
In terms of cargo and delivery, the sub-logistics company of Alibaba, Cainiao and the competitor of Alibaba, JD.com have been working on automatic delivery technologies for a long time. So Alibaba and JD.com had started to gain competitive advantage over their US rivals Amazon and Alphabet long before the epidemic.
In 2018, he experimented with cargo delivery with the JD.com drone. In Beijing, driverless smart vehicle technology was also being tested.
During quarantine in Wuhan, e-commerce sites faced great difficulty. We are talking about a problem such as increasing the delivery capacity without bringing staff into Wuhan city. It’s hard to say it’s a perfect plan, but JD.com and other e-commerce platforms decided to use automation technologies in Wuhan. Intelligent and driverless vehicles were used to deliver products to homes and hospitals in Wuhan city. These vehicles were controlled from the control center in Beijing, 1000 kilometers away. In other words, cargo vehicles were controlled remotely. The already empty streets of Wuhan were also ideal for driverless vehicle testing.
Due to the main roads closed during the quarantine, it was necessary to deliver products to the settlements away from the city center by ferry, but it was necessary to go at least 6 hours for ferry delivery. JD.com logistics team preferred delivery by drone instead of 6-hour ferry ride. Thus, under normal conditions, the 6-hour delivery time was reduced to 20 minutes.
Quarantine has greatly increased the demand for things like rice, flour, sunflower oil, vegetables, meat, fruit in China. People who went all these materials and bought from the markets had to buy online in one day. China’s e-commerce supply chain suddenly started to have staff shortages.
Freshippo, a subsidiary of Alibaba’s fruit and vegetable selling firm, hired people in closed restaurants and shops. A subsidiary of JD.com’s 7Fresh followed a similar method. Their experience in the retail and logistics industry has been leveraged, so there is no need to provide comprehensive training to the hired people.
In addition, thanks to the experience of the hired staff in their previous jobs, new products started to be offered. For example, JD.com has made a significant increase in “ready to cook” production thanks to its new staff working in the catering and catering industry.
MTDP (such as “Bring it in us”), a mobile application that also has the logic of delivering products bought from the supermarket, added other things to market delivery. Thus, MTDP couriers delivered the books and clothes that people bought to the customers’ homes.
Staff and Customer Health
People working in the field of delivery and cargo interact with many people daily. This means that they risk their lives in a sense and live constantly with the risk of getting infected. To reduce this risk, JD.com and Alibaba provided all kinds of masks, gloves and disinfectants to their employees; He also measured the body temperatures of these people regularly, ensuring that they were disinfected before and after each delivery.
Signature of the customer is normally required during product delivery. However, during the quarantine period, people stated that they did not want to be in direct contact with the couriers. As a result, many e-commerce companies such as JD.com were unable to deliver many products and took back the products that had to be delivered. JD.com had to pay the financial costs caused by this situation.
However, in order to eliminate this problem, JD.com placed a large number of boxes in the garden of apartments and sites. After the couriers placed the products in these boxes, they sent an SMS with a code to the customer. The customer also entered this code and took the product from the box in person. In addition, JD pioneered the establishment of a social network of volunteers to deliver orders to people who could not leave their home.
Online Health and Counseling Services
The corona outbreak has offered some e-commerce companies new opportunities in areas where they have not been very successful before. JD.com’s online healthcare division was left in the shadow of Alibaba’s Alihealth platform, until the epidemic.
As there was an intense demand for Covid19 online advice and consultancy, JD.com focused on the online healthcare business, also called telemedicine. In other words, thanks to this platform that enables people to contact doctors and people over the internet, JD.com not only increased its medical product sales but also became one of the most successful jobs in Covid19 detection throughout the country.
Thanks to this platform, which directed the survey questions prepared by the Chinese Ministry of Health to people, doctors were able to see online whether the patients were Covid19 positive. If the positivity of a person participating in the survey is too high, he immediately notified the relevant hospital in the city where he lived, and that person was immediately quarantined in the hospital. JD.com also provided psychological support to people within the scope of online health services.
AliHealth, on the other hand, informed millions of people about coronavirus through its sub-companies such as Taobao and Alipay. Free online consultancy service was offered across the country on both platforms.
Companies and government around the world continue to fight the coronavirus crisis. In this article, we have seen how China’s two big e-commerce companies successfully managed the crisis. Firms dealing with e-commerce in our country, by following these and similar strategies, can both prevent this crisis from shaking the economy and enable customers to spend the quarantine period more easily.
The example of China shows us that in the coronavirus outbreak, it can be extremely useful for e-commerce companies to take advantage of digital logistics platforms and experienced staff who are laid off. Combating the coronavirus outbreak is both a medical and moral duty, and companies that have successfully overcome this process will have gained an important competitive advantage in the post-corona period.
We wholeheartedly hope that the Covid19 outbreak ends soon!