The global economy has experienced rapid digitalization in the last decade, with digital platforms playing a crucial role in economic recovery from shocks. The COVID-19 pandemic accelerated this trend, particularly in China, where stringent containment policies were implemented. This study examines the role of digital platforms in supporting the UN SDGs, specifically focusing on the impact of different containment policies on the business sustainability of micro, small, and medium-sized enterprises (MSMEs). The research uses large-scale administrative data from Alibaba Group's Ele.me platform, a major online food delivery service in China, to quantitatively evaluate the impact of different containment policies on various aspects of the business, including the number of orders, gross merchandise value (GMV), subsidies, product variety, and price discounts. The study also examines the role of business strategies such as having a chain store network or being listed on multiple apps in relation to MSME resilience. The importance of this research lies in its detailed examination of the long-term impact of COVID-19 containment policies on MSMEs' sustainability and its contribution to a better understanding of the interplay between digitalization and sustainable development. The focus on MSMEs is critical because they employ a large portion of China's workforce, and their sustainability is directly relevant to achieving SDG target 8.3. The study further contributes by examining the food and pharmacy industries, thereby providing insights into the role of digitalization in food security (SDG target 2.c) and healthcare (SDG target 3.8). The unique dataset provides an opportunity to measure the extent of digitalization during the pandemic, adding to the limited existing research that employs quantitative methodologies in the context of SDGs and COVID-19's impact on MSMEs.

The literature review covers two main areas: tackling the UN SDGs through digitalization and the impact of COVID-19 on the sustainability and resilience of MSMEs. Regarding digitalization and SDGs, the literature acknowledges the transformative potential of digital technologies in achieving various SDGs, including improving healthcare, education, and environmental sustainability. However, it also highlights potential negative impacts, such as increased inequalities and threats to privacy. Most existing studies use qualitative approaches or focus on aggregate SDG indices at the country level. Regarding COVID-19's impact on MSMEs, the literature emphasizes the economic consequences, particularly revenue losses, layoffs, and business closures. Many studies rely on surveys or financial data, lacking detailed, high-frequency administrative data on MSMEs. This study addresses the gap by using high-frequency, comprehensive data to quantify the long-term impacts of containment policies and business strategies on various aspects of MSME operations, particularly in the food and pharmacy sectors.

The study utilized 104 weeks of detailed administrative data from Alibaba Group's Ele.me platform, covering the period from 2019 to 2021. The data included information on the number of shops, active users, delivery riders, operational data at the merchant-week level, and shop characteristics. The data was augmented with information on COVID-19 cases and containment policies at the city level from public sources. Three stringency levels of containment policies were defined: complete lockdown, partial lockdown, and checkpoint lockdowns. Seven cities in China with varying policy implementations were selected for analysis. The study employed two main empirical models. The first model (Equation 1) focused on the impact of containment policies on shop entry, platform agents (shops, users, riders), and overall operation performance at the city-district-week level. This model used a quadratic time trend to capture the nonlinearity of policy effects. The second model (Equation 2) examined the impact of containment policies on individual merchants' performance at the shop-week level. This model controlled for various shop characteristics such as chain store status, network size, multi-app status, and included shop fixed effects, and district-week fixed effects. A third model (Equation 3) specifically analysed the impact of two business strategies – chain stores and multi-app stores – on individual merchants' performance during and after the Wuhan lockdown. The analysis included several proxy variables, including the number of orders, net GMV, average net GMV per order, number of SKUs, and ratio of subsidies to GMV. These variables were used to assess the impact of containment policies on both the extensive margin (number of entrants) and the intensive margin (performance of individual shops).

The key findings of the study are as follows: 1. **Impact of Containment Policies on Digitalization and Platform Agents:** Complete lockdowns in Wuhan and Yichang led to a significant decrease in the number of new entrants, particularly in the cooked food industry, demonstrating long-term negative impacts on the extensive margin. In contrast, cities with partial or checkpoint lockdowns experienced an initial increase followed by a gradual decline, suggesting that milder restrictions accelerated digitalization. The share of chain stores and multi-app stores increased across all cities, especially during complete lockdowns, reflecting the resilience of these business models. The number of shops, active users, and delivery riders decreased during lockdowns, with cities under complete lockdown taking longer to recover. 2. **Impact of Containment Policies on Overall Operation Performance:** In cities with partial or checkpoint lockdowns, the number of orders and net GMV recovered quickly after the lockdowns. Wuhan, under complete lockdown, took much longer to recover to pre-pandemic levels. The average net GMV per order increased during the lockdowns, suggesting consumers consolidated their orders or stockpiled goods. The net GMV of cooked food recovered slower than uncooked food and other goods during complete lockdowns, implying long-term negative impacts on this sector. 3. **Impact of Containment Policies on Individual Shops:** The number of orders, net GMV, and average net GMV per order for individual shops increased sharply during lockdowns, indicating a rise in demand per seller on the intensive margin. The ratio of subsidies to GMV decreased during the lockdown, suggesting less price competition among the shops that remained open. The number of SKUs decreased initially in most cities but gradually increased post-lockdown, indicating disruptions to supply chains during lockdowns. 4. **Impact of Business Strategies:** Chain stores, especially those with larger networks, and multi-app stores exhibited greater resilience and business sustainability. Being a chain store increased net GMV by 7.6% during lockdown and 13.1% post-lockdown. Being a multi-app store increased net GMV by 10.2% during lockdown and 13.8% post-lockdown. The effectiveness of these strategies varied across different product categories, suggesting that supply chain advantages are more prominent when demand reaches a certain threshold.

The findings highlight the heterogeneous impact of COVID-19 containment policies on MSMEs, with complete lockdowns leaving lasting negative impacts on the extensive margin (new entrants), while milder policies accelerated digitalization. On the intensive margin, chain stores and multi-app stores showed greater resilience, demonstrating the importance of business strategies in navigating economic shocks. The results demonstrate the potential of digital platforms to support the UN SDGs, contributing to food security, healthcare access, and job creation. However, the long-lasting and potentially contagious effects of stringent lockdowns underscore the need for carefully designed policies. The study's findings have implications for policymakers, suggesting the need for a balanced approach to containment policies that avoids long-term negative economic effects while promoting digitalization. The observed resilience of certain business models suggests opportunities for policymakers to incentivize these strategies among MSMEs. Future research could focus on comparative analysis of online and offline businesses and explore the role of multihoming strategies.

This study provides valuable insights into the complex interplay between COVID-19 containment policies, digitalization, and the sustainability of MSMEs. The findings underscore the importance of considering both the extensive and intensive margins of the market and highlight the significant role of business strategies in ensuring resilience. The study's findings offer crucial insights for policymakers seeking to support MSME sustainability and leverage the power of digitalization to achieve the UN SDGs. Future research should focus on comparing online and offline businesses, investigating multihoming strategies, and exploring the role of government support in fostering MSME resilience.

The study has some limitations. First, a lack of data on offline businesses prevents a direct comparison with the online sector. Second, the data is limited to Alibaba's Ele.me platform, excluding information on multihoming strategies. Future research should address these limitations by including data on both online and offline sectors and data from multiple platforms. Data privacy concerns restrict the public availability of the Alibaba dataset, but the authors have made the data and code available upon reasonable request and after obtaining permission to access Alibaba's server.