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Alibaba.com Report finds MSMEs to be the “Backbone of the Post-Pandemic Economy”

Alibaba.com Report finds MSMEs to be the “Backbone of the Post-Pandemic Economy”
PR Newswire
GENEVA, June 27, 2022

Global B2B e-commerce company, Alibaba.com, partners with AliResearch to co-publish a report that reveals telling research on the sur…

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Alibaba.com Report finds MSMEs to be the "Backbone of the Post-Pandemic Economy"

PR Newswire

Global B2B e-commerce company, Alibaba.com, partners with AliResearch to co-publish a report that reveals telling research on the survival of Micro- Small- and Medium-sized Enterprises (MSMEs) throughout and beyond the pandemic in time for MSME Day 2022.

GENEVA, June 27, 2022 /PRNewswire/ -- To commemorate MSME Day 2022 on June 27, Alibaba.com and AliResearch Institute, Alibaba Group's research arm, published the report "Challenges, Responses, and Transformation of MSMEs in the Post-Pandemic Era". The report takes a multi-focal look at how Micro- Small- and Medium-sized Enterprises (MSMEs) fared through the pandemic to provide a better understanding of what action businesses took in order to survive, revealing key findings that include:

  • MSMEs are critical to the global economy, comprising 90% of businesses worldwide and contributing 70%+ of global employment and 50-60% of GDP.
  • MSMEs were hit hard by the pandemic, with micro-businesses suffering disproportionately: up to 70% of global MSMEs saw sales decline with two-thirds reporting their sales dropped by 40%.
  • MSMEs offline business has been severely disrupted by lack of demand while online sales have skyrocketed; digitization is an effective way for MSMEs to risk-proof their business: the survival rate of MSMEs is 7 percentage points higher in the regions with the highest ecommerce than in those with the lowest.

This research report was led and drafted by Professor Gan Li, an economist at Texas A&M University, and his academic research team, based on key findings from a quantitative survey among MSMEs led by Alibaba.com and AliResearch, as well as studies through a wide variety of relevant public and academic information sources. The report is available in multiple languages and can be downloaded here.

The United Nations General Assembly designated 27 June as Micro-, Small and Medium-sized Enterprises Day (A/RES/71/279) in order to raise awareness of the contribution that small businesses make to sustainable, inclusive and resilient economic growth and, shared prosperity and decent work for all.

One of the most significant observations of the Alibaba.com report is that MSMEs are not only the backbone of the post-pandemic economic recovery but also a key contributor to a more inclusive and diverse economy. According to the report, MSMEs account for 90% of businesses, 70% of employment, and 50~60% of GDP worldwide. In the US, 28% of small businesses are minority-owned, and 33% are women-owned[1].

The research also uncovered that of all MSMEs, the pandemic took the largest toll on smaller MSMEs. This was to be expected since many smaller businesses simply did not have the resources or infrastructure to roll with the punches of repeated shutdowns, local restrictions, shortages, and other issues caused by the pandemic.

Less than a quarter of MSMEs escaped the negative effects of the pandemic-- with only 23.5% of MSMEs not suffering from a decline in sales. Two-thirds of MSMEs had business drop by 40%. These statistics only begin to encompass the effects of the pandemic that has now been going on for over two years,

"We have to recognize that MSMEs are not only critical economic players but their health and prosperity are also critical to a full and sustainable global economic recovery. Consequently, we have released this report to help return MSMEs to the center stage and facilitate broader and more practical discussions about supporting MSMEs and equipping them for greater economic impact." Said Hongbin Gao, Vice-president of Alibaba Group, Head of AliResearch Institute

Digital transformation has proven to be a lifeline to many MSMEs during the pandemic, by reducing their costs, providing timely access to information, optimizing workflows, and expanding into new markets. Although e-commerce was already very popular in retail, the pandemic has sped up its adoption in the wholesale and manufacturing industries.

The research revealed that the survival rate of MSMEs is 7 percentage points higher in the regions with the highest e-commerce penetration than in those with the lowest. In addition, the economic downturn was less severe in regions with higher e-commerce penetration rates. 

Andrew Zheng, Vice-President of Alibaba.com, said, "The pandemic has changed global trade forever. There is no denying that businesses and individuals have suffered tremendously. However, the creativity and ingenuity that MSMEs have put into action to overcome the many hurdles created by the pandemic are nothing short of impressive. E-commerce may have served as a survival mechanism throughout the pandemic, but moving forward, it will remain a valuable tool for global trade. Social selling, live commerce, virtual trade shows, and request for quotation (RFQ) marketplaces allow sellers to get creative in how they reach their audiences and make it easier for them to connect with their ideal clients. Through digitization, MSMEs can also easily access insights related to internet traffic, demand forecasting, and other key analytics that empower them to make better decisions for their businesses."

About Alibaba.com

The first business unit of Alibaba Group, Alibaba.com is a leading platform for global B2B e-commerce that aims to make it easy to do business anywhere. Launched in 1999, Alibaba.com is engaged in services covering all aspects of commerce, including providing businesses with tools that help reach a global audience for their products and helping buyers discover products, find suppliers, and place orders online fast and efficiently. It serves millions of buyers and suppliers from over 200 countries and regions around the world.

About AliResearch Institute

Established in 2007, AliResearch serves as a platform to consolidate efforts from enterprises, academics and research institutions to help market players and industries to accelerate digital transformation.

As the research arm of Alibaba Group, AliResearch has been closely tracking the constant changes and innovations brought by the new era of digital technology.

Aided by a full spectrum of innovative use cases stemming from Alibaba's ecosystem, the institute stays at the forefront of producing insightful thinking and crucial findings on the country's fast developing digital economy.

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Angely Fan

Maja Hauke

Roger Zhang

chian.fan@alibaba-inc.com

maja.hauke@alibaba-inc.com

roger.zhang@alibaba-inc.com

 

[1] OECD, 2021, SME and Entrepreneurship Outlook 2021

 

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Economics

Target Sets Sights on Holiday Season, Has Plan for High Inventory

Target said that it still expects spillover from inventory rightsizing to the tune of $200 million in the third quarter.

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Target said that it still expects spillover from inventory rightsizing to the tune of $200 million in the third quarter.

Target's  (TGT) - Get Target Corporation Report strategy is paying off as the company's stock falls on heavy volume following its earnings release. 

Normally, a profit miss as wide as Target's, 39 cents per share vs. expectations of 72 cents per share, would result in a bigger drop than Target's, but the retailer has been prepping the market for this miss all summer. 

The inventory the company built up during the height of the pandemic, as Americans shopped more from home, needs to go, and the only way get rid of the excess product is deep discounts. 

"Back in June, we announced that our team would be undertaking a bold effort to rightsize our inventory position in the categories for which demand patterns have radically changed," CEO Brian Cornell said during the company's earnings call. "While this decision had a meaningful short-term impact on our financial results, we strongly believe it was the best path forward."

Now, looking forward the company sees some overhang for the third quarter, but expects a big holiday season ahead. 

While some fear a recession and what it might do to the economy, Target is convinced that the holiday season will be strong.

Image source: John Smith/VIEWpress.

Target Aims for Holiday Season

While Target is focused on the back-to-school season currently underway, the company expects "spillover" from its inventory issues to be present during the third quarter to the tune of $200 million. 

But the company's own checks suggest that its shoppers are excited about the holiday season. 

"The one thing that seems to be very consistent is a guest and consumer who says they want to celebrate the holiday seasons so we certainly expect that they are going to be celebrating Halloween this year and actively trick or treating and hosting parties with friends and family," Cornell said.

"We know they're looking forward to Thanksgiving and they're going to look forward to celebrating the Christmas holidays and that comes down each and every week as we survey consumers and talk to our guests so that gives us great optimism for our ability to perform during these key holiday seasons"

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Not only does Target expect a strong quarter, but the company also expects favorable comps as fourth quarter headwinds from a year ago aren't present this time around. 

"Guests already have their sights set on upcoming holidays and seasonal moments in Q3 and beyond," Cornell said.

Target's Q2 Collapse

Target said adjusted earnings for the three months ending in July were pegged at 39 cents per share, down 89% from the same period last year and well shy of the Street consensus forecast of 72 cents per share.

Group revenues, Target said, rose 3.5% to $26 billion, essentially matching analysts' estimates of a $26.04 billion tally. Target said same-store sales rose 2.6%, again shy of the Refinitiv forecast of 3.2%, while operating margins fell to 1.2%, below the group's July guidance of a 2% level. 

Earlier this summer, Target cautioned that its bigger-than-expected 35% build-up in overall inventories over the first quarter would trigger price cuts, adding that deeper discounts would be needed to shift the excess goods onto a customer base that was already pulling back on discretionary spending.

Walmart  (WMT) - Get Walmart Inc. Report, Target's larger big box rival, said Tuesday that improving spending trends, as well as actions the group has taken to shift excess inventory, will ease some of the pressures it expects to face in terms of overall profits over the back half of the year.

Walmart said adjusted earnings for the three months ended in July came in at $1.77 per share, down one penny from the same period last year but well ahead of the Street consensus forecast of $1.62 per share.

Group revenues, the company said, were tabbed at $152.9 billion, an 8.4% increase from last year that topped analysts' estimates of $150.81 billion. U.S. same-store sales rose 6.5% from last year, the company said, firmly topping the Refinitiv forecast. 

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Economics

Why Is No One at Nike Working This Week?

And will the move gain broader acceptance among American employers?

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And will the move gain broader acceptance among American employers?

You go into an office, pull at the door and find that it doesn't give and nobody's there. 

It may sound like the start of the common rushing-to-the-office-on-a-Saturday nightmare but, more and more, collective time off is being embraced by employees as part of a push for a better work culture.

While professional social media platform LinkedIn  (MSFT) - Get Microsoft Corporation Report and dating app Bumble  (BMBL) - Get Bumble Inc. Report had already experimented with collective time off for workers, the corporate ripples truly began with Nike  (NKE) - Get Nike Inc. Report.

In August 2021, the activewear giant announced that it was giving the 11,000-plus employees at its Oregon headquarters the week off to "power down" and "destress" from stress brought on by the covid-19 pandemic.

"In a year (or two) unlike any other, taking time for rest and recovery is key to performing well and staying sane," Matt Marrazzos, Nike's senior manager of global marketing science, wrote to employees at the time.

Nike Is On Vacation Right Now

The experiment was, not exactly unexpectedly, very well-received — a year later, the company instituted its second annual "Well-Being Week." Both the corporate headquarters in Beaverton, Ore., and three Air Manufacturing design labs with over 1,500 employees are closed for a collective paid vacation from Aug. 15 to 19.

"We knew it would be impactful, but I was blown away by the feedback from our teammates [...]," Nike's Chief Human Resources Officer Monique Matheson wrote in a LinkedIn post.

"Because everyone was away at the same time, teammates said they could unplug – really unplug, without worrying about what was happening back at the office or getting anxiety about the emails piling up."

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Of course, the time off only applies to corporate employees. To keep the stores running and online orders fulfilled but not exacerbate the differences between blue and white collar workers, Nike gave its retail and distribution employees a week's worth of paid days off that they can use as they see fit.

Nike has tied the change to its commitment to prioritize mental health. In the last year, it launched everything from a "marathon of mental health" to a podcast that discusses how exercise can be used to manage anxiety and depression.

Rippling Through the Corporate World?

But as corporations are often criticized for turning mental health into positive PR without actually doing much for employees, the collective week off was perhaps the most significant thing the company did for workers' mental health.

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The practice of set office closures has long been common practice in many European countries. In France, not only corporate offices but even restaurants and retail stores empty out over the month of August for what is culturally considered sacred vacation time. 

But as American work culture prioritizes individual choice and "keeping business going" above all else, the practice has been seen as radical by many corporate heads and particularly small businesses that may find it more difficult to have such a prolonged drop in business. 

But in many ways, the conversations mirror some companies' resistance to remote work despite the fact that one-fourth of white-collar jobs in the U.S. are expected to be fully remote by 2023

"This is the kind of perk that makes employees want to stay," industry analyst Shep Hyken wrote in a comment for RetailWire. "And knowing they can’t completely shut the entire company down, I like the way they are compensating the distribution and retail store employees."

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Economics

New principles for biological fieldwork will build equity for researchers and local communities

LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens…

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LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens and data about our natural world. Today, such work can demand collaboration between large international teams of biologists, extensive permitting with authorities, interaction with local communities and research plans often led by one or two senior investigators.

Credit: Michael Cuesta

LAWRENCE — For hundreds of years, teams of biologists have carried out fieldwork around the globe, often trekking to remote places to collect specimens and data about our natural world. Today, such work can demand collaboration between large international teams of biologists, extensive permitting with authorities, interaction with local communities and research plans often led by one or two senior investigators.

Too often, these factors can result in power imbalances between researchers and local communities where fieldwork takes place. Moreover, inequities based on race, gender, sexual orientation and seniority can develop within the teams of researchers themselves.

Now, a new paper appearing in the Proceedings of the National Academy of Sciences lays out a set of principles for biological fieldwork designed to lessen inequities between researchers and local populations, as well as internally among research teams themselves. Many “best practices” in the paper are adapted from procedures for permitting and licensing developed over years at the University of Kansas Biodiversity Institute and Natural History Museum.

“When I was invited by colleagues at Berkeley to be part of this conversation, I was really happy to contribute,” said co-author Rafe Brown, curator-in-charge of the Herpetology Division at KU’s Biodiversity Institute. “After more than 30 years of working in the Philippines, I had lots of experience in managing groups of people working together in the field. I’d seen a lot of things work out well, and a lot of things work out so-so, where we needed some improvement in the way we interact, as groups of people, working often in remote and stressful field conditions. I’ve seen some real trainwrecks of group psychology during fieldwork — and things that just struck me as potentially dangerous. I never had any real disasters myself, but I saw some risky and even scary behavior, and heard a lot of stories over the years, in my early career, and in grad school.”

KU’s Biodiversity Institute is seen as a leader in collaborating with local authorities and populations to make sure biological fieldwork is ethical, legal and safe — in part because of its extensive checklists and procedures for permitting and licensing. Supplemental documents to the PNAS paper — a Field Safety Plan Template and a Scientific Permit Checklist – are adapted in part from KU’s procedures.

“I’d like to see these shared widely and adopted by institutions around the world as a foundation for fieldwork planning,” said Lori Schlenker, assistant director of collections and facilities at the Biodiversity Institute. “We’re committed to participating in safe and legal fieldwork and training the next generation of students to be able to lead their own programs and mentor their own students in these practices when they graduate from KU. We’ve been building on our experiences — good and bad — and have developed procedures so that prior to departure, permits are in place and researchers have considered how they will collect, export and import research specimens safely, legally and ethically. This ensures that resources are not expended on specimens that we cannot legally accession into our collections. Most importantly, the safety of all field team members is critical. Applying the experience of our BI researchers, and with guidance from KU, emphasis is placed on communication and transparency as part of the fieldwork planning process.”

Much of this to hone the way KU biologists tackle permitting and interacting with local authorities and communities has taken place in the Philippines, where Biodiversity Institute personnel strive for locally inclusive fieldwork.

“Our 15-year, multi-institutional collaboration with KU has resulted the traditional products and outputs — like students trained, papers published, grants obtained — but it has also profited from many deep discussions and steps taken, to correct the past landscape of exclusively foreigner-led, expeditionary fieldwork,” said co-author Tess Sanguila of Father Saturnino Urios University in the Philippines. “Additionally, here within the country, our own scientific community often only considers and prioritizes the contributions and inputs from the so-called experts in the capital city over those of the researchers from the provinces in the southern Philippines, who are stereotyped as being of inferior expertise. This paper provides a simplified and practical starting point, from which we hope to establish a solution to this whole imbalanced culture, and from which we fundamentally advocate to ‘support local’ for more inclusive and invigorated long-term collaborations of the future.” 

The PNAS paper advocates four main principles for fieldwork to promote “equity, reciprocity, access, benefit-sharing and safety”:

  • Be collaborative: We embrace collaborative science and fieldwork practices with our partners, field teams and the communities with whom we work.
  • Be respectful: We prioritize local sovereignty and long-term benefits for the community, and we invest time and effort in learning about and respecting local history and cultures.
  • Be legal: We commit to obtaining all necessary permits, authorizations, and land permissions, and to following all legal guidelines and requirements.
  • Be safe: We work proactively to promote a safe physical and emotional environment for all members of research teams and local communities with clear guidance and communications.

Lead author Valeria Ramírez Castañeda, doctoral student in integrative biology at the University of California, Berkeley, said her own time conducting biological fieldwork in the Amazon inspired her work on the paper.

“My own personal experience comes from the Global South,” Castañeda said. “I’m Colombian, and my focus was in particular on how we interact with local communities when conducting fieldwork. My research in biology takes place in the Colombian Amazon, where I work with predator-prey interactions between snakes and frogs. The local community — biologists, drivers, field assistants, among others — sustain and inform my work there. However, are we scientists reciprocal when it comes to thinking about benefits and acknowledgments for the community? I’ve been trying to change or at least acknowledge practices that exclude the local communities from research. I was born in the biggest city in Colombia — Bogotá — so I was an uninvited guest in the Amazon territory. I’ve been trying to get to know the community where I work, ask for consent for every procedure, explain my research, collaborate with biologists and field assistants from indigenous and local communities, and participate in community-science projects.”

In addition to working with local populations and authorities, the new paper offers recommendations to alleviate power asymmetries that can plague fieldwork teams internally.

“With all the recent civil unrest in the U.S. and the existing inequities that have been exacerbated by the pandemic, it’s a good time to reevaluate how we do things in our profession because people are listening and reflecting,” said Rebecca Tarvin, assistant professor of integrative biology at the University of California, Berkeley. “Personally, I’ve wanted to think more deeply about field biology for some time. I didn’t receive any formal training on how to do collaborative science involving fieldwork and I think this is largely true for others in field biology. The way people conduct fieldwork thus often depends on the norms and culture of their lab and on the default approaches to doing science. However, doing equitable science takes intentional planning, and many default approaches are not equitable. That’s why we wanted to provide some general guidelines that can help anyone proactively plan more equitable research programs.”

Tarvin added that data show diverse teams can produce more innovative and robust research.

“Having diverse groups doing fieldwork in a way that is fair, open and collaborative with the people living where we work has the further benefit of including everyone in conducting, communicating and benefiting from science,” she said.


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