The rise of the self-employed
A staggering total of 756 online based startups, all formed within a year, were registered on Avas Mall MV in 2020.
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One third of the population lives in Malé for better access to basic facilities. However the living situation for most have not been easy easy. In addition to the high cost of living, families are cramped into small apartments or dwellings with no social well-being. To afford a living in Malé, an average of five to seven households live together to enjoy greater economies of scale by resource pooling and sharing of common facilities. Earning MVR10,474 per month on average from their main job, households are forced to engage in other economic activities to make ends meet. According to the Household Income and Expenditure Survey (HIES) 2019, 44 percent of women and 36 percent of men work in informal employment.
Over the past few years, the rise in adaptation to the internet and high usage of social media has created the opportunity for stay-at-home mothers and employed individuals to earn an additional income through online ‘side hustles.' Such home-based startups include, among others, online retailers, bakeries, arts and craft businesses, gift shops, thrift stores and food businesses. The process of showcasing products, communication and payment is processed digitally through online platforms such as Facebook and Instagram, whereas the products are produced or bought and stored in their own homes.
These businesses are relatively small in scale and require much less capital to start. It is easier for more enthusiastic individuals with skills and motivation to enter the market. This micro economy showcases characteristics similar to a farmers’ market, where a large number of businesses are involved, with high competition and almost no barriers to entry. The difference is that it is based online and are able to conveniently reach thousands of customers through the internet. The most predictable aspect of such businesses is that they follow the trend at the time of startup. One example is, the boom of thrift stores and businesses selling plants seen in 2020. Seeing individuals enter the market and earning income, the rest wonders, if they can replicate this success. The trend continues until the bubble pops and it is no longer popular among buyers, then another category of businesses pops up and thrives.
Avas Mall Mv was established in 2018 with a view to support such online businesses. Initially the website was a business directory, of online based businesses aimed at creating a platform for buyers to find items they needed, and a place for sellers to advertise their businesses. Eventually Avas Mall Mv created an Instagram account for easier navigation for businesses. Today, Avas Mall has enlisted over 1,200 businesses, in 16 categories, across 15 atolls. The initiative has helped many businesses grow their market share, and customer reach, while assisting thousands of buyers to find suitable products they need.
According to Avas Mall, the number of startups increased in 2020 amidst the pandemic, as unemployment increased and impacted the incomes of many. Striving to make ends meet, came the rise of the self-employed. Statistics indicate that since 2009, the highest startups recorded was in 2019 — when 158 businesses were registered. However, a staggering total of 756 startups were registered on AvasMall in 2020. The number peaked between May and October 2020 — the period of the lockdown with strict restrictions imposed in Malé due to the COVID-19 pandemic. The majority of these businesses were in the categories of food, fashion, thrift stores, and home & gardening. Among these were, however, 106 businesses that became inactive soon after being established. The majority of startups utilise Instagram as their main platform, aside from Facebook. Twenty of the total businesses listed on the site, own a website while a few others utilise Twitter and Viber.
MFR sat down with three of these businesses started in the year 2020.
I created my page while working at Crossroads ,but I wasn’t really active back then because of work and due to COVID-19. I lost my job and really needed to earn money someway. The idea was always there and I figured that this was the perfect time to start this. Now I am doing it as a full-time venture. The purpose of this store is to provide an affordable shopping experience for everyone and to promote sustainable shopping. We opened our store in September 2020, a few months after the lockdown was lifted. Surprisingly, we got lots of support and love from our customers and managed quite well during this time. Due to the recent lockdown measures imposed, we have been running low and only surviving on deliveries. Once the situation gets better, our goal is to relocate the store with various other products such as secondhand furniture, books and home appliances.
I had to stay back in Malé during the final year of my degree since my flight got cancelled due to the lockdown. During that time I decided to do something small to help myself mentally and financially. At first I was just doing it for fun, sending brownies to my family and friends. Alhamdhulillahi, I got a lot of support and love, so I decided to take it to the next level and open a dessert page offering a variety of desserts. I have quite a number of loyal customers and my business has been growing steadily. My dream is to own a little bakery-café combo place where we serve both sweet and savory pastries with good coffee to enjoy it with. But right now, I am focusing on establishing a strong business brand with unique products.
I’m not sure I’m doing this as a small business. Just started painting again when lockdown started last year. I wanted to keep myself busy, with kids home and doing online classes, there was time to spare. I started painting to keep myself occupied with something I love and passionate about. But after the artwork I did for the exhibition, ‘Unveiling Vision’ last year, people started noticing and started asking for paintings. Right now I am happy with the pace I am taking commissions. But I would love to expand when the time is right.
The stories of Sajaya, Nishwa and Nifa, are emblematic of individuals who have thrived and managed to expand over a short period of time while others are taking their time and pace in developing their business. At the same time, individuals, such as Nifa, are comfortable with their current levels of business and do not plan to expand further anytime soon. One thing common to all is that, despite the pandemic, they have all managed to start something meaningful from scratch, whether it meant starting a business or picking up lost hobbies, while bringing a positive impact to the lives of many. In other words, the rise in the self-employed over the pandemic was a definite silver lining.
However, established as they may be, any plans to expand to a wider market, has its subsequent hurdles in terms of access to finance and business, and unfriendly regulatory requirements. The government should create more opportunities for businesses in this micro economy, understanding the characteristics and features of this unique environment. Fostering its growth can empower budding entrepreneurs, who can in turn super-charge the economy and create a more vibrant, competitive and plentiful market.
