COVID-19 containment policies, digitalization and sustainable development goals: evidence from Alibaba’s administrative data

Abstract

The impact of digital platforms on the implementation of the United Nations’ (UN) Sustainable Development Goals (SDGs), especially the business sustainability of micro, small and medium-sized enterprises (MSMEs), under different containment policies during and after the COVID-19 pandemic has not yet been studied in detail. Using detailed administrative data from Alibaba Group’s online on-demand food delivery platform, we found that the digital platform contributed to the food security, wellbeing, employment and business sustainability of MSMEs both during and after the pandemic. We uncovered merchants’ heterogeneous responses to the COVID-19 pandemic during and after the implementation of different containment policies in China. On the extensive margin, the period of complete lockdown left long-term scarring on online merchants by decreasing the number of entrants, especially in the cooked food industry. In contrast, on the intensive margin, chain stores, especially those with large chain networks or multiapp stores, exhibited stronger resilience than their counterparts during and after lockdown. Thus, specialization (at the outlet level) and wider coverage (at the network level) emerged as key factors that enable business sustainability under challenging economic circumstances.

Unintended Consequences of Business Digitalization among MSMEs during the COVID-19 Pandemic: The Case of Indonesia

“…Indeed, the extent to which digitalization helped MSMEs withstand the negative shocks of the pandemic and lockdowns was largely unknown-particularly in developing countries due to the lack of suitable microdata (Miguel and Mobarak 2022). Exceptions include (i) Elhan-Kayalar, et al (2022), which use administrative records and merchant survey data (collected digitally) to investigate MSME business strategies and performance in Indonesia during the pandemic; (ii) Shinozaki (2021), which evaluates whether and how platforms provide potential benefits using unique microdata from selected Asian countries; (iii) Zhou, et al (2024), which uses detailed administrative data from Alibaba Group's online on-demand food delivery platform (in the People's Republic of China) to find that the digital platform contributed to the food security, wellbeing, employment, and business sustainability of MSMEs both during and after the pandemic; and (iv) Todo et al (2022), which uses a unique firm-level dataset from Asia to examine the potential determinants of the robustness and resilience of supply chain links against economic shocks due to the spread of This study aims to bridging the remained evidence gap in the literature by adopting granular microdata collected by ADB through business surveys in Indonesia in 2020 and 2021 (ADB 2020b(ADB , 2021a. 1 The canonical difference-in-differences method is used to identify the arguably causal impacts of COVID-19 and the effectiveness of digitalization in mitigating the harmful effects of the pandemic.…”