Rural Taobao: Alibaba's Expansion into Rural E-Commerce

Tarun   Khanna; Ryan  Allen; Adam  Frost; Wesley  Koo

Case | HBS Case Collection | January 2019 (Revised October 2019)

Rural Taobao: Alibaba's Expansion into Rural E-Commerce

by Tarun Khanna, Ryan Allen, Adam Frost and Wesley Koo

Abstract

Alibaba's Rural Taobao initiative had been launched in 2014 as a public service initiative to increase e-commerce adoption in China’s remote rural areas. In the first two iterations of the initiative, dubbed “1.0” and “2.0,” Alibaba had partnered with local businesses and young returnees to operate village stations. Village stations served as logistical and educational hubs to help villagers make online purchases. Despite significant growth in sales through village stations, the business model was operating at a loss, and competitors JD and Pinduoduo were growing quickly, threatening to challenge Alibaba by claiming the rural e-commerce markets. Bill Wang, the head of the initiative, was tasked with designing and implementing the next model for Alibaba’s future expansion into rural areas. The decision centers around whether Alibaba should copy the successes of competitors JD and Pinduoduo, escalate commitment to its original value proposition (hands-on service to villagers), or embrace an entirely new model. The case highlights the competing pressures of financial performance, CSR and corporate mission, government relations, and long-term competitive positioning that are common to major strategic decisions.

Keywords: strategy; Business growth; ecommerce; corporate social responsibility; Business and Government; emerging market; Market Platforms; Online Technology; Emerging Markets; Rural Scope; Growth and Development Strategy; Competitive Strategy; Corporate Social Responsibility and Impact; Business and Government Relations; Decision Making; China;

Language: English

Format: Print

22 pages

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Citation:

Khanna, Tarun, Ryan Allen, Adam Frost, and Wesley Koo. "Rural Taobao: Alibaba's Expansion into Rural E-Commerce." Harvard Business School Case 719-433, January 2019. (Revised October 2019.)

While there is evidence about labor market discrimination based on race, religion, and gender, we know little about whether physical appearance leads to discrimination in labor market outcomes. We deploy a randomized experiment on 1,000 respondents in India between April and May 2020 to investigate how “looks” affect labor market outcomes. Using machine learning and computer face rendering techniques, we simulate North, South, and Northeastern Indian faces and randomize two waves of treatments where we attach faces with otherwise identical CVs. However, the second wave also contains a vignette where we provide respondents with information about the incidence of discrimination. We focus on Northeastern Indian faces that resemble those in China to focus on the potential for discrimination that has historically been present in anecdotal accounts. While we do not find evidence of discrimination against Northeastern faces in the first wave, we do so in the second among those who do not see the vignette. We provide suggestive evidence that these results are consistent with the presence of homophily under limited attention.

Pallak Seth, Group CEO of PDS Multinational Fashions, is contemplating options to bring better collaboration across his global apparel supply chain platform. PDS, a group of 50-plus subsidiary companies, each led by its own CEO and with different apparel industry specialties, has grown rapidly over the past decade, yet the industry is increasingly competitive and challenges remain constant. Looking for ways to reach the Group’s 2023 goals of $2 billion in revenue, Seth and his executive board are considering two ways to increase collaboration and reward performance: a joint P&L approach to drive partnerships across the subsidiaries and an employee stock option plan, to unlock value across the Group.

Article | Journal of Medical Internet Research | September 2020

Regulatory Sandboxes: A Cure for mHealth Pilotitis?

Abhishek Bhatia, Rahul Matthan LLM, Tarun Khanna and Satchit Balsari

Mobile health (mHealth) and related digital health interventions in the past decade have not always scaled globally as anticipated earlier despite large investments by governments and philanthropic foundations. The implementation of digital health tools has suffered from 2 limitations: (1) the interventions commonly ignore the “law of amplification” that states that technology is most likely to succeed when it seeks to augment and not alter human behavior; and (2) end-user needs and clinical gaps are often poorly understood while designing solutions, contributing to a substantial decrease in usage, referred to as the “law of attrition” in eHealth. The COVID-19 pandemic has addressed the first of the 2 problems—technology solutions, such as telemedicine, that were struggling to find traction are now closely aligned with health-seeking behavior. The second problem (poorly designed solutions) persists, as demonstrated by a plethora of poorly designed epidemic prediction tools and digital contact-tracing apps, which were deployed at scale, around the world, with little validation. The pandemic has accelerated the Indian state’s desire to build the nation’s digital health ecosystem. We call for the inclusion of regulatory sandboxes, as successfully done in the fintech sector, to provide a real-world testing environment for mHealth solutions before deploying them at scale.

Citation:

Bhatia, Abhishek, Rahul Matthan LLM, Tarun Khanna, and Satchit Balsari. "Regulatory Sandboxes: A Cure for mHealth Pilotitis?" Journal of Medical Internet Research 22, no. 9 (September 2020). View Details

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