24pc women online entrepreneurs go out of business as pandemic bites

As many as 24 per cent of the women online entrepreneurs were compelled to close their businesses in June as their desperate efforts to stay afloat since the pandemic went in vain, a new study found. 

Of the women entrepreneurs who tried hard to reduce the loss in revenue by cancelling orders and selling off stocks in April, a quarter closed their businesses finally in June, said the study by the Brac Institute of Governance and Development (BIGD) under the Brac University.

Mehnaz Rabbani, programme lead for research, policy, and governance at the BIGD, presented the findings of the study titled "Knocked Down, but Up Again: The Case of Female Online Entrepreneurs in Bangladesh" at a webinar yesterday.

The study selected small online businesses owned by women mostly in the informal sector.

In the first round, 122 such entrepreneurs were interviewed through online questionnaires from 14 April to 21 April. In the second round, 103 of them were interviewed over the phone from 31 May to 11 June.

Though online sales of health products and daily essentials flourished because of the pandemic, the crisis took a heavy toll on online retailers of fashion, cosmetics and other imported products.

According to the study, 27 per cent had resumed operation after the temporary closure at the beginning of the pandemic. Nearly half of the respondents said they had been able to continue their businesses despite the crisis.

Those who closed businesses, 16 per cent were homemakers, meaning they had to shut their ventures due to the burden of unpaid care work at home.

Of the entrepreneurs who are still running businesses, they had to spend an average 7.5 hours on unpaid care and household chores every day, way higher than 5.4 hours before the pandemic hit, the study showed. 

After the lockdown was eased in June, they could manage to dedicate 3.3 hours to their businesses, down from 5.5 hours previously.

As many as 79 per cent of the respondents reported lower sales compared with the pre-crisis level. In the first round, 84 per cent said they made lower sales compared with that during Baishakh last year.

In the first round, the respondents predicted that 122 employees would be laid off out of their total of 668. In the second round, they said 121 employees were laid off within one month.

The entrepreneurs say if demand does not pick up and business operations don't resume, another 547 staff will have to be let go in the next three months.

The report showed 68 per cent of the businesses were operating with money coming from personal savings while 19 per cent were relying on family and friends for support.

As many as 65 per cent of the sellers have no formal registration or trade licence and none of them is receiving any assistance from the government or non-government organisations.

In June, 63 per cent of the respondents were found to be unaware of where to seek government assistance.

Speaking at the webinar, Selima Ahmad, a lawmaker and president of the Bangladesh Women Chamber of Commerce and Industry, stressed on the importance of trade licence to expand the business of online entrepreneurs, as it becomes difficult to lobby for them in absence of registration.

"There is no noticeable mention of women entrepreneurs in the Bangladesh Bank's circulars on stimulus packages related to COVID-19 although women entrepreneurs continue to play an essential role in contributing to the economy of Bangladesh," she added.

Maheen Sultan, a senior fellow for practice at the BIGD, moderated the event. Nasheeba Selim, a senior social development officer for gender at the Asian Development Bank Resident Mission in Bangladesh and Imran Matin, executive director of the BIGD, also spoke.