Digital platforms: Catalysts for growth and sustainability among Bangladesh’s microentrepreneurs: Part 2

• by Md Farista Andalib, Samveet Sahoo and Ihsan Mahboob Hoq
• Oct 25, 2024
• 4 min

Our previous blog explored the role of digital platforms in supporting Bangladeshi microenterprises. This part delves into sector-specific factors influencing platform adoption, the unique motivations of female microentrepreneurs, and the platforms’ broader social and economic impact.

Our earlier blog explored how microenterprises use digital platforms in Bangladesh. In this part, we dive deeper into the factors that influence platform adoption, female microentrepreneurs’ unique motivation to onboard digital platforms, the broader social and economic impact of these digital platforms, and the way ahead for these small businesses.

Factors that influence platform adoption

Various factors influence microentrepreneurs’ decision to adopt digital platforms, which differ across sectors. An understanding of these factors can help stakeholders design targeted interventions to increase platform adoption among microentrepreneurs.

Retail trade: Microentrepreneurs in retail trade prefer the convenience of having goods delivered directly to their shops and being able to access goods affordably. Additionally, comparing prices between suppliers is crucial for making informed purchasing decisions. Moreover, user-friendly interfaces play a significant role as they enable entrepreneurs to navigate the platform efficiently without requiring extensive technical expertise.

Transport and logistics: The adoption of digital platforms hinges on specific factors essential for operational efficiency. Microentrepreneurs in the transport and logistics sector prioritize ease of finding customers, fair treatment of drivers, and reliable tracking and reporting systems. Platforms that facilitate quick connections between drivers and customers, ensure transparent policies for drivers, and provide real-time tracking information are highly sought after, as they enhance operational efficiency and foster trust among users.

Social selling: Microentrepreneurs engaged in social selling consider certain features indispensable for success, which include robust marketing tools, secure payment processing mechanisms, and effective customer support services. These enabling factors help microentrepreneurs promote their products effectively, reach a wider audience, ensure secure transactions, and address customer inquiries and concerns promptly.

Additionally, perceptions of digital platforms’ usefulness vary. A slightly higher percentage of women, especially in rural areas, believe the platforms are not helpful. Notably, women in rural areas are motivated to join digital platforms for networking, safety, and visibility, while both genders value market access benefits.

If providers understand and address each sector’s unique needs, they can create targeted strategies to increase microentrepreneurs’ use of digital platforms. This is crucial for the growth of microenterprises across various industries, alongside economic development and empowerment.

Women microentrepreneurs’ perception and motivation to join and onboard digital platforms

Female microentrepreneurs are motivated to embrace digital platforms when they find networking opportunities, enhanced safety and security, and amplified visibility for their businesses. This need for connection and exposure is crucial to influencing women entrepreneurs, empowering them to expand their presence and engage with a broader audience.

Both male and female microentrepreneurs perceive access to the market as the primary benefit for women who participate in digital platforms. However, a difference emerges based on location. Rural female microentrepreneurs prioritize access to peer networks as the most crucial benefit, while both male and female urban entrepreneurs emphasize market access.

Interestingly, when they joined a digital platform, most women in both urban and rural settings did not encounter significant challenges or barriers related to cultural norms, societal biases, or other social factors. This suggests that women in both settings quickly embrace digital platforms for business purposes, despite potential societal constraints.

Broader economic and social impacts of using digital platforms

The broader economic and social implications of digital platforms extend far beyond mere financial gains for microentrepreneurs. While the increase in income and profits is undoubtedly significant, we must also recognize these platforms’ non-monetary advantages.

One key benefit of digital platforms is the access to training facilities provided by digital platforms. These resources empower microentrepreneurs, especially women, by equipping them with the skills and knowledge needed to succeed in their businesses. Microentrepreneurs can enhance their capabilities and drive business growth with access to training on marketing strategies, financial management, and customer relations.

Furthermore, digital platforms increase safety for microentrepreneurs, particularly women, who may face unique challenges and risks in their business operations. These platforms facilitate secure transactions and provide safety measures, such as real-time tracking and reporting, to create a safer environment for conducting business and thus promote confidence and peace of mind among microentrepreneurs.

Another significant advantage digital platforms offer is visibility. Microentrepreneurs can reach a broader audience beyond their local communities when they showcase products and services on online platforms. This increased visibility expands market opportunities and enhances the reputation and credibility of microentrepreneurs, which ultimately contributes to their long-term business success.

Moreover, digital platforms enable microentrepreneurs to make informed business decisions. The platforms provide reliable financial insights and analytics that empower entrepreneurs to assess performance, identify trends, and strategize for the future. This data-driven approach fosters better decision-making and improves business outcomes and long-term sustainability.

Digital platforms hold great transformative potential for Bangladesh’s microentrepreneurs. The platforms provide microentrepreneurs access to new markets, formal financial services, and valuable business insights, which empower them to grow their businesses and improve their livelihoods. However, to maximize their impact, stakeholders must address barriers to adoption, such as increasing platform awareness and ensuring user comfort. This can create a difference between traditional ways of doing business and the adoption of digital methods.

Targeted interventions, such as collateral-free credit, alongside supportive policies, such as faster registration, can help bridge these gaps to ensure more microentrepreneurs can benefit from the digital revolution. As we continue to explore the transformative potential of digital platforms, it is clear they hold the key to unlock new opportunities for Bangladesh’s microentrepreneurs, drive inclusive and sustainable economic growth, and capitalize on the opportunities of the digital age.