As small businesses around the world still struggle to cope with the ongoing pandemic amid vaccine roll-out, small and medium businesses (SMBs) in India have reported higher rates of closure, with SMB leaders being least confident in their ability to continue for at least six months, a new Facebook global report revealed on Thursday.
The SMBs in India and Pakistan reported higher rates of closure, with 32 per cent (rising from 24 per cent in October and dropping from 46 per cent in May) and 28 per cent (rising from 23 per cent in October and dropping from 38 per cent in May) reporting they were closed at the time of the survey, respectively.
“While the roll-out of vaccines gives a reason to be hopeful, our latest ‘Global State of Small Business Report’ is a timely reminder that many are still vulnerable and need support,” Sheryl Sandberg, Chief Operating Officer at Facebook, said in a statement.
“Those feeling the impact of the pandemic the most are women and minority-owned businesses – a further reminder that whenever crises hit, it’s always the most vulnerable who are hit the hardest,” she lamented.
SMB leaders in Egypt and India were least likely to be confident in their ability to continue for at least 6 months, with only 31 per cent and 39 per cent, respectively, indicating confidence.
In contrast, SMBs in the US (68 per cent), Belgium (72 per cent), Germany (74 per cent), and Australia (79 per cent) were the most confident.
“Over half of operational SMBs in India reported decreased employment. About two fifths of operational SMBs reported that they had rehired former employees in the past three months in India (42 per cent),” the report mentioned.
The Asia-Pacific region saw a seven-percentage point increase in average closure rates since October.
For the report, Facebook surveyed more than 35,000 small business leaders across 27 countries and territories in February.
“Nearly a quarter (24 per cent) reported their businesses were closed, up from 16 per cent in October and not far from the peak of 29 per cent when many countries were in the first major Covid wave last May. The sharpest increases were in Europe, coinciding with recent lockdown measures,” Sandberg said.
Those that are still open continue to cope with lower sales, and 30 per cent have had to reduce their workforce.
“Worryingly, just over half of those surveyed were confident in their ability to continue operating for at least 6 months if current circumstances persist, and a similar proportion said they didn’t plan to rehire laid-off or furloughed employees in that time either,” she noted.
If there’s a silver lining, it is that many businesses found success online.
More than half of those surveyed said they used digital tools to communicate with customers. Those reporting higher shares of digital sales were also more likely to have reported more robust sales overall.