Turning Retail Solutions To Crisis Mitigation

At this point, the COVID-19 virus has gone global, with a foothold on every continent but Australia, an increasing caseload and, most disturbingly, a mortality rate that has officially been upgraded by the Centers for Disease Control (CDC) from around 2 percent to 3.4 percent. According to Director-General of the World Health Organization (WHO) Dr. Tedros Adhanom Ghebreyesus, this is wholly new territory for the global medical community – in ways both good and bad.

“We are in uncharted territory with #COVID19. We have never before seen a respiratory pathogen that is capable of community transmission, which can also be contained with the right measure,” Dr. Ghebreyesus tweeted earlier in the week.

But while the virus’ impact across verticals and in the financial markets has become a global phenomenon, China – where the virus originated in the city of Wuhan, within the province of Hubei – has undeniably been hit the hardest. Of the slightly fewer than 100,000 cases that have been identified globally thus far, a little over 80,000 have originated in China. The country has also suffered the largest number of casualties via the rapid rise and spread of the infection – 2,981 out of the 3,160 deaths worldwide have happened in mainland China.

And the virus has infected more than the population – it has also affected the entire economy. Seeking to slow the spread of the virus, the government extended China’s Lunar New Year celebration, driving February output from its production segment to record lows. According to the country’s official measure of manufacturing activity, the Purchasing Managers Index (PMI), China’s score had dropped to 35.7 from 50 in January. To put that in context, China’s PMI score never fell that low during the entirety of the global financial crisis a decade ago.

And though factories have re-opened, they are only running at 60 percent to 70 percent capacity as of this week, according to BBC reports – largely due to the fact that about a third of China’s migrant labor force who traveled to their countries of origin for the Lunar New Year holiday is now unable to return to China due to travel bans. Since that segment is comprised of approximately 300 million people, the 100 million who are unable to return to work are acting as a major anchor in the manufacturing sector.

Compounding those issues in mainland China are quarantines, transportation shut-downs, school closures, forced work-from-home policies and event cancellations, on top of a host of other restrictions and curtailments aimed at stopping the spread of the highly communicable disease. Economic, commercial and social life in China has ground nearly to a halt, particularly in areas and regions where viral infections are widespread.

Nearly, but not entirely. Alibaba reported a 38 percent increase in sales activity at the end of Q4, and has seen eCommerce and same-day shipping orders rapidly increase. As homebound consumers still need to eat and shop for a variety of goods, home delivery has become a particularly appealing option of late.

And, according to recent reports, China’s retail giants like Alibaba and JD.com are leveraging their technology for crisis mitigations, beyond addressing the increased demand for home delivery. They are using their data science skill, sophisticated logistics platforms, high-tech innovations and massive network of connections within the Chinese economy to combat the outbreak in ways expected – and not.

Injecting Energy Into the Economy via Expertise

In an environment that is simultaneously confronting an outbreak, a collapse in consumer confidence, production delays and a worker shortage, moving goods from point A to point B can quickly become a challenge – particularly in regard to getting critical supplies to the people who most need them.

Alibaba and JD.com are both very good at delivering things and making supply chain connections – and they are bringing that capability to bear when it comes to moving emergency supplies throughout the 3.7 million square miles that comprise China. Thus far, the two platforms have aided in the delivery of five million masks, 500,000 gloves, 40,000 sets of protective clothing, 20,000 goggles, 7,000 cases of disinfectant, 30 tons of intravenous drips and 40 tons of food, according to reports in AdWeek.

To aid in moving all of those goods, Alibaba made the announcement last month of a B2B sourcing platform that matches sellers and their products to the needs of hospitals and local authorities.

“No matter where your goods are, we will deliver them to front-line medical personnel in the fastest and safest ways,” the online retailer said in an open letter, aiming to encourage participation in the program.

The global eCommerce giant further announced that its logistics arm, Cainiao, has created a logistics hub and 65,000-square-foot warehouse in Wuhan to speed up the delivery of donations and medical supplies and to store and dispatch goods.

And to keep the white-collar economy humming while the government is encouraging workers in non-critical support functions to stay home, Alibaba has moved to buttress teleworking capability nationwide, in collaboration with the collaboration app Dingtalk. The two are joining forces to “enable instant communication and remote teamwork, including video conferencing, live-streaming for over 300 participants, cloud-based document editing and approval, and daily health surveys for employees,” according to a Dingtalk release.

The companies have recently added 100,000 cloud servers to support demand for cloud-based communication for remote workers, and have created connections for roughly 600,000 teachers to interact with their now housebound students. That service, care of the partnership, is now available at no charge for 200 million workers from more than 10 million organizations.

Meanwhile, JD.com has been equally busy, albeit in slightly different ways. The firm’s artificial intelligence (AI) cloud unit has launched an Emergency Resources Information Platform to enable municipal and medical institutions to access online suppliers and emergency logistics services, while also matching suppliers and organizations to providers in need. Their digital supermarket arm has donated 630,000 adult diapers and 2,000 packages of feminine care products to more than 100,000 workers in the Hubei province. And if that seems like an odd choice, it’s actually highly practical, considering that the protective hazmat suits worn by medical personnel are single-use: If they are removed, no matter how briefly, they can’t be reused – and they are in short supply.

“The protective suits can only be worn once, and we don’t have enough of them. To save resources, we have to try not to use the restroom once we put on the suits. The adult diapers can really help us during this hard time,” said a Wuhan region doctor, quoted by JD.com.

JD.com has also installed 75 massage chairs in hospitals in Hubei, and is working with Driscoll’s to donate thousands of cases of blueberries, raspberries and apples to hospital staff in Wuhan.

On the backend logistics side, the company is currently at work constructing a custom supply chain management platform for the Hubei provincial government to help with the efficient procurement and distribution of supplies. That also includes delivery of international donations, including 1,800 sets of medical protective clothing, nearly 8,500 pairs of gloves and 70 pairs of goggles from the U.K., helping to ensure that the materials get in the right hands in a matter of days, not weeks.

And those are just some of the more expected and perhaps mundane applications of Alibaba’s and JD.com’s technology as the situation unfolds.

The Out-of-the-Box Solutions 

As we noted, employees are returning to work after a nearly 60-day hiatus, and while any number of public health campaigns around hand-washing and other containment etiquette are making the rounds, JD.com has come up with a slightly more high-tech solution:

Using drones to spray people with disinfectant while they wait for the train.

“Each drone can carry 10 liters of disinfectant at a time,” according to JD.com. “With a flight radius of 5 km [3 miles], using drones enables the city to cover a wider and more thorough area than they would be able to cover with human personnel, in a shorter period of time.”

The drone solution thus far is only being tested in a single Mongolian city, where a high infection rate left some people quarantined in a compound for a month. It is unknown whether the drones – which were created by modifying drones used in agriculture to spray fertilizer on crops – will be used to disinfect any other civilian populations.

In other high-tech and unexpected applications of retail technology to fight infection, last week Alibaba announced it had created an AI algorithm to identify Coronavirus cases that was 96 percent accurate in about 20 seconds, based on results from 5,000 CT scans. The eCommerce giant also reported that its cloud computing arm has engaged with the Zhejiang Provincial Center for Disease Control and Prevention to work with global research institutions in speeding up viral gene sequencing, protein screening and the search for treatments. According to Dr. Sun Yin, the technology head of the Zhejiang CDC, that will make it easier to confirm cases going forward and possibly hasten the development of vaccines and other treatments.

Will those efforts be enough to level out the impact crater that the COVID-19 virus has created? That would be an optimistic prediction, given the amount of damage already done – and the slowdowns, sluggishness and tremendous uncertainty that already exist.

But as Alibaba CEO Daniel Zhang noted, the Coronavirus outbreak is a “black swan event” – so perhaps comprehensive solutions are a lot to ask for, as the situation is still emerging. But successful mitigation might not be out of reach – even where the virus has hit the hardest – which might be seen as encouraging news for a global community that is struggling to adapt.