The great majority (96.4%) of Chinese micro, small and medium-sized enterprises (MSME) expect to incur losses during the current coronavirus outbreak, at least in the short-term, but they remain confident about future business opportunities.
Around two-thirds (66%) of them are optimistic about future activity in 2020, including 14.4% who expect rapid growth in scale or profits and 11.3% who think there will be little change from the previous year.
Just 11.7% are pessimistic and expect significant losses or even bankruptcy, while 21.7% are unsure about their prospects with another 40.9% confident they can keep going through the difficulties.
And in a further sign of resilience in the small business sector, nearly all MSME vendors (99%) say they have no intention of giving up, while 90% say they will not cut jobs this year.
These are some of the headline findings from an online survey of nearly 24,000 MSME sellers on Alibaba’s Taobao and Tmall platforms that was conducted by the Ali Research Institute, the China Household Finance Survey and the Research Center of Southwestern University of Finance in the first week of February.
While Covid-19 has spread since then, the comprehensive research sheds light on the enduring entrepreneurial spirit of the small business sector in China, according to news portal Alizila.
Full details of the study, entitled Jumpstarting Recovery Amid the Covid-19 Outbreak, have been published by Luohan Academy, an Alibaba think tank, which observes that the purchasing power of a large proportion of the population has not been severely affected yet.
Furthermore, the report expects consumption to “recover strongly” once the outbreak is over and, most importantly, the “new digital economy has played a stabilising role in fighting the spread of the virus and avoiding a collapse of retail sales”.
According to the study, disrupted logistics and distribution channels have been the main causes of delays to the resumption of business operations, while other pressure points included rent, labour costs, interest on loans, material backlogs and virus-prevention costs.
“It is essential to alleviate the MSMEs’ cost burdens and equip them with the new technological infrastructure to cope with the challenging situation,” the report said.
But it added on a more positive note: “While the firms were rightly worried about short-term impact from the outbreak and stringent measures implemented to contain the outbreak, they were optimistic about China’s economic prospects in 2020 and remained confident in the business environment and their ability to turn their businesses around.”
Sourced from Alizila, Luohan Academy; additional content by WARC staff