By Swastika Pulami Magar
The first wave of the Covid-19 had hit almost every sector of the Nepalese economy. The outbreak of the pandemic in the whole world also affected Nepal severely. The government imposed the lockdown from March 2020 to control the spread of the virus, which led to a massive hit in the economic sectors. Due to the lockdown, numbers of sectors such as tourism, trade, and health sectors were affected and disrupted the supply chain. Nepal experienced negative economic growth. At that time, the launch of the visit Nepal 2020 campaign in January, hoping to attract two million tourists, cancelled due to the pandemic. It has also worn out the hospitality and tourism-related business sector. Nepal’s economy highly depends on the tourism sector, and due to the pandemic, the arrivals of tourists stopped. The consequence of lockdown has resulted in the job loss of Nepalese people. Migrant workers, who had a great contribution to Nepal’s economy through remittance, had to return to Nepal due to the pandemic. Many Nepali people working in Gulf countries lost their jobs and lives and were forced to come back home. The manufacturer and small businesses were facing losses, and the import and export of the goods fell drastically. During such a pandemic, people were either closing their business or shutting them down.
That apart, the challenges and impact of the first wave of Covid-19 also provided opportunities to small businesses. Due to continued lockdown, even small and local businesses started to adopt the digital platform providing the facilities for purchasing goods online and have them delivered at home. Although Nepal is the least developed country, small businesses play a vital role in the economy and contribute to the state budget. During the pandemic, entrepreneurs and other Nepali youths were motivated and came up with innovative ideas to startup a small or home-run business.
Business startup during pandemic:
Starting a business is not an easy thing. Whether it is a small firm or a big manufacturer, you have to be psychologically and financially prepared for numerous challenges whatever business you want to open. Nepal was slowly inclining towards e-commerce, but the pandemic has advanced the business to undergo digital transformation more rapidly. This helped and encouraged more youths to start up a small business through digital platforms during the pandemic. They got more chance to think, learn and gain more knowledge about the digital business in lockdown. People were also moving towards technology, and it has given new-found importance to e-commerce sites.
In Nepal, during the Covid-19 pandemic, online payment gateway such as e-sewa, IMEpay, Khalti, among others, helped Nepalis startups to become cashless. Moreover, Daraz and Muncha became busier during this crisis as well as the food/beverages were easily dropped to a common people’s house through foodmandu, foodmario, online laundry, and many others have already shown the potential of e-commerce as an alternative way and opportunities for small and local businesses. Due to which it has made an entrepreneurs mindset among Nepali youth during a pandemic to investigate more deeply in this area. The young generation has the potential to drive economic evolution by making use of technology in everyday transactions. In the lockdown, many entrepreneurs and youth-led entrepreneurs started small businesses such as providing medical supplies, food delivery, shopping online, selling customized masks through social media, selling their creative art of work through social media etc., became popular. Entrepreneurs were motivated to start a small business and did not have to be jobless during quarantine. This trend continued after the lockdown ended. The number of startups or small business has increased during the crisis due to the lack of job opportunities.
An increase in covid 19 cases in neighbouring country India in a massive way; the second wave has created fears in Nepal to those startups. The government has shown less initiative about the spread of the coronavirus, and people are also unaware of the second wave and often walked unmasked and did not maintain physical distancing. Our country has suffered a lot in the first wave and still is in term of recovery. If the second wave is not controlled and spread in large numbers, it will be tough for Nepal to maintain the economy. It will again show its impact in different sectors like production, import and export of goods and service, small businesses etc. The most likely to be affected are those who have just started a small business during or after the first wave.
New startups and their consistency in the second wave:
The Nepal government has issued prohibitory orders, so they have been forced to shut down the shops and business again in this second wave. Entrepreneurs are afraid of going into losses after the recovery in the first wave. The risk of the second wave might affect small business and startups. The situation is alarming. There may be a case of loss of sale, revenue and cash flow. The problem such as loss of sales order, loss of business network, and inability to pay liabilities can occur. To tackle such a crisis again, entrepreneurs should change their business models, working environment and maintain a good relationship between clients. Again lots of challenges to be faced in business, nevertheless, the pandemic has accelerated the shift towards a more digital world which will create new business opportunities. The government effort at the time of crisis is not satisfying. So, individuals need to look after innovative ideas, current situation and new market opportunities to strengthen business prospects. Covid-19 cases are increasing day by day in Nepal and are creating fears among people. To reduce the challenges in the second wave, proper strategies should be made to go through this crisis. In Nepal’s context, we can see a massive change in consumer behaviour as people are getting used to online shopping, working from home, online education and entertainments. Hence, they have to invest in technology, market development, innovation, build a strong relationship with consumers and explore new market potentials both within Nepal and abroad. They need to invest in technology as there is the rapid growth of mobile devices, which is making it easier to capitalize on the growth of e-commerce. They need to observe market shifts, identify the opportunities, and streamline mobile application, social media, and digital marketing.
The writer is a first-year BBA student at the Kathmandu University School of Management (KUSOM).
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