Lockdown: Enterprises diversify to tide over the crisis

Karnataka has registered around 16,691 new businesses under the Shops and Establishment Act since April this year, when the lockdown was imposed.

There has been nearly a 35% drop in registration of businesses this year when compared to the past three years, when an average of 37,000 new businesses were registered in the state.

Read | Innovation at knifepoint: Startups' bid to survive Covid-19

An analysis of data provided by the Department of Labour showed that most businesses opened under the Hotel industry, followed by Security and Housekeeping firms and Retail / Provision stores.

While there has been a slowdown in the registration of new businesses opening, many existing ones have shut down or consolidated their ventures. Many entrepreneurs have also taken the opportunity to open new businesses in established sectors like hotels, groceries, or retail outlets.

Manjunath, who runs a grocery store in RM Nagar, says that business was great during the lockdown but in the past couple of months, it has dropped by 30 - 40%, a fact he blames on the steady exodus of people from the city. “Most of our business comes from people who are from outside the city,” he says. “With ‘work from home’, most of them have settled down in their hometowns and our business has dipped."

Manjunath has used the slowdown to convert his shop into a walk-in supermarket.

Across the street from his store, a new vegetables and fruits store has popped up. Sanjeev, along with four of his friends, started the business in mid-August.

All five of them are working professionals who come from a cultivating background and wanted to do something in the agricultural space. When one of them lost his job, the friends decided to float the new venture together.

Their USP: they provide an extensive selection of fruits and vegetables under one roof, all sourced directly from farmers. In two months, Sanjeev and his friends have opened three more branches in this part of the city and provide employment to 60 people.

​

​

Ashwini worked in the travel industry for close to 15 years and switched careers after the lockdown. She opened an organic and natural food company in July and sells everything from groceries, snacks, fruit squashes and ready-made powders. She says her own contacts in the organic agriculture space allow her to source unadulterated items directly from the producers. She says that business has been slowly picking up since September this year.

Business yet to pick up

“Covid-19 has provided an opportunity for the youth to enter farming and agri-business. However, just 60% of businesses are currently working and labour-intensive sectors like tourism, hospitality, real estate, textile, and garments are yet to pick up. With the holiday season approaching, we expect another 15% jump in business,” said Perikal M Sundar, the President elect of the Federation of Karnataka Chamber of Commerce and Industry.

While Bengaluru is a far cry from the energetic, bustling centre of commerce it was a year ago, the current situation is forcing existing businesses and new entrepreneurs to adapt and make the most of the situation.

Sajjan Raj Mehta, a trade activist from Chickpet, says business is a pale shadow of what it used to be a year ago. “It is the worst time for trade and industry. Dasara is nearly here and if you come to the market, it is a curfew-like situation. If the festival season loses its colour, more than 50,000 shops will be on the brink of closing,” he says.

While strongly objecting to the proposed 15 - 30% hike in property tax by the BBMP, he said the government should provide some form of relief for traders and retailers.