Innovation during infection: On finding opportunities during a calamity

That the Covid-19 infection has triggered unprecedented digital transformation, pivots in business models, and unforeseen opportunities for tech startups has been a theme Forbes India has been on top of for the past one and a half years. The pandemic may be a once-in-a-century phenomenon, but this isn’t the first infection in the past two decades to spur such disruption. 

The SARS (severe acute respiratory syndrome) virus outbreak started in southern China in 2002, spreading to at least four other countries. Face masks, sealing of offices, work from home, isolation and quarantine were the order of the day. At the heart of an “innovative startup culture” in that period was Jack Ma, who launched Taobao Marketplace to complement flagship Alibaba and to take on eBay in the Chinese consumer ecommerce market. The SARS outbreak provided Chinese tech and internet companies an opportunity to innovate for growth, and Jack Ma grabbed it with both hands.

As Duncan Clark, author of the riveting Alibaba: The House that Jack Ma Built (2016)—which is as much a story about the emergence of Chinese tech and internet giants as it is about ‘Crazy Jack’—writes: “Although it sickened thousands and killed almost 800 people, the outbreak had a curiously beneficial impact on the Chinese internet sector, including Alibaba. SARS validated digital mobile telephony and the internet, and came to represent the turning point when the internet emerged as a truly mass medium in China.”

As Clark notes, cellphones and PCs became the windows to information about the virus for the Chinese and how to protect themselves at a time when reliable information about SARS was hard to come by. “Crucially for Alibaba, SARS convinced millions of people, afraid to go outside, to try shopping online instead.” The stage was set for Taobao, which offered free listings to sellers, and “adopted a series of guerrilla marketing techniques, including reaching out to hundreds of small but fast-growing sites and online communities that eBay had deemed unimportant”. eBay exited China in 2006.

Taobao by then had 30 million users, which shot up to 170 million in three years; sales had surged from $2 billion to $30 billion.