Originally published in bigd.bracu.ac.bd on 14 May 2020 

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 road-side 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? In this study, we 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, we selected 122 Facebook pages managed by women in Bangladesh. The survey was conducted over a week, starting from 14 to 21 April, through an online questionnaire.

Our research findings show that:

  • More than 90% of businesses have been negatively affected due to the pandemic
  • 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
  • Although, most of the businesses are confident about reactivating their businesses and 84% perceive that they can revive the previous condition of the businesses within one year, this perception might be clouded with the assumption of lock-down being lifted after April
  • Immediate coping strategy is to reduce loss by cancelling orders and selling the stock at a discount;
  • Few businesses are coming up with innovating coping mechanisms like temporary close-down while maintain social media visibility, adding products which are now in demand
  • COVID-19 does not have discernible effects on businesses by the size or type of businesses, or the characteristics of owners—small informal online businesses are and will be hurt regardless
  • For 56% of the owners, their surveyed businesses are the only source of income, with more than 67% of these businesses contributing up to 60% to their family income
  • Although most enterprises have no formal registration or trade license, there is an expectation of support from the government. How and when this assistance will arrive is not clear to entrepreneurs
  • 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

Photo from UN Women Asia and the Pacific, licensed under CC BY-NC-ND 2.0