Although the online sales of health products and daily essentials were booming due to COVID-19, the ongoing pandemic has taken its heavy toll on the online retailers of fashion, cosmetics, and other imported products, says a recent study, reports UNB.
Many of those who were trying to reduce the losses of revenue by cancelling orders and selling off their stocks in April, 24 per cent of them shut their businesses in June.
The study, first conducted in April and then followed in May-June, by the Brac Institute of Governance and Development (BIGD), Brac University revealed the information.
In a webinar on Sunday, Mehnaz Rabbani, programmeme Lead, Research, Policy, and Governance at BIGD, presented these findings.
With lower startup costs and a broader reach, a growing number of entrepreneurs in Bangladesh have recently turned to the online retail market. A large per centage of these entrepreneurs are female who operate their businesses through social media like Facebook.
These online businesses usually see a rise in their sales on special occasions, such as Eid and Pahela Boishakh.
But this time around, as both the events were observed under a nationwide lockdown, 79-84 per cent of the entrepreneurs experienced lower revenue earnings than last year's Eid and Pahela Boishakh.
Though the impact of this decline in revenue has been nothing short on female entrepreneurs who rely on their online businesses as the only source of income, it also has knock-on effects on those employed in these businesses.
The study found that within one month after the first round of survey, 121 employees were laid off. If things do not improve for these businesses, the study apprehends that nearly 550 more people's jobs could be at stake within the next seven months.
Besides, a greater number of entrepreneurs now, in fact, do believe that their businesses will improve. The study findings show that the per centage of entrepreneurs who are confident that their businesses will bounce back has increased from 15 per cent in April to 21 per cent in June.
There has also been a decline in uncertainty with regard to overcoming this shock from 30 per cent to 18 per cent.
With this overall increase in confidence level, nearly half of the entrepreneurs now believe that it will take them from six months to nearly a year to recover from the losses they suffered.
Meanwhile, these resilient female entrepreneurs are still practising the same coping mechanisms they had adopted in April, such as cancelling orders, giving discounts, laying off employees, or remaining the same.
According to the study, though fewer orders have been cancelled in June compared to April, there has been an increase in the per centage of entrepreneurs who were giving discounts-from about 13 per cent in April to 33 per cent in June.
