COVID-19 is putting all businesses, big and small, in danger of bankruptcy. From large retailers, such as JC Penny in the United States, to roadside vendors in Bangladesh, the effect of COVID-19 is felt sorely by all entrepreneurs. In Bangladesh, there is a large number of online entrepreneurs, mostly women, who use social media platforms to sell products. How resilient are these businesses? The study focused only on female online entrepreneurs who operate on Facebook to investigate how they cope with the COVID-19 shock and what strategies they use to sustain their businesses. In line with our particular interest in micro and small enterprises owned by women, 122 Facebook pages managed by women in Bangladesh were selected. The survey was conducted over a week, starting from 14 to 21 April, through an online questionnaire. Some of our research findings show that more than 90% of businesses have been negatively affected due to the pandemic, and more than 80% of businesses are facing lower revenue compared to this season in last year, which means most businesses will face the liquidity crisis, given the small cash reserves these small businesses usually have. Furthermore, their immediate coping strategy is to reduce loss by cancelling orders and selling the stock at a discount, while a few businesses are coming up with innovative coping mechanisms like temporary close-down while maintaining social media visibility, and adding products which are now in demand. Although most entrepreneurs have not laid off their employees, if sales do not pick up, they will not be able to retain employees for too long.
Authors: Rabbani, Mehnaz; Zahan, Iffat; Matin, Maria
Type: Policy Brief
Year: 2020