From January to May 2020, more than one-quarter of businesses have closed down because of COVID-19, according to a new report.
Small and medium-sized businesses (SMBs) in Asia-Pacific have been some of the hardest hit by the COVID-19 pandemic, with almost half (46%) of SMBs having to close down during the period of January to May 2020.
In East Asia, 18% of SMEs have had to cease operation, compared to the global figure of 26%, according to the Global State of Small Business Report by Facebook, the World Bank and the Organisation for Economic Cooperation and Development (OECD).
Some countries are also more affected than others. In Taiwan (4%), Japan (10%) and South Korea (10%) registered lowly SMB closure rates than countries like Singapore (31%), India (47%) and Bangladesh (50%).
The report, which surveyed more than 30,000 small business leaders across more than 50 countries, also found that a third of SMEs still operating have reduced their workforces, while nearly two-thirds reported on falling sales on the same period from 2019.
As economies attempt to recover from COVID-19, perhaps more need to be done to help SMBs. Defining SMBs as those with 500 or fewer employees, the report also highlighted that SMBs employ 60-70% of workers in most countries and represent 99% of businesses within the OECD area.
Not all is doom and gloom however, as SMB leaders appear to be adapting and preparing themselves for the future. Of the 26% of SMBs to have closed, nearly three-quarters (74%) expect to reopen, while 45% of SMBs who remain opened do not expect their business to close, even if conditions persist beyond the next six months.
Sheryl Sandberg, COO, Facebook, said, “Entrepreneurs are resilient people, and the report shows that many remain optimistic about the future. Nearly three quarters of those that were closed at the time of the survey expect to reopen as restrictions are lifted.
“[However], the path to recovery is uncertain and many may need support from governments or other institutions to get back on track.”
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