Playing on a tough pitch: Lessons for Bangladeshi businesses from Sri Lanka’s comeback
Political change and economic crisis compelled many Sri Lankan businesses to take drastic measures to adapt. As Bangladesh has recently witnessed its own political upheaval, their lessons can provide valuable insights
When Bangladesh and Sri Lanka go head-to-head on the cricket field, fans from both nations brace themselves for an unpredictable yet thrilling ride. It's a mix of optimism and anticipation, knowing the game could turn at any moment.
Oddly enough, the political and economic landscapes in both countries have mirrored this uncertainty, and much like our cricket teams, businesses in Bangladesh and Sri Lanka have had to adapt to complex, shifting environments.
In 2022, Sri Lanka plunged into one of the worst economic crises in its history. Years of heavy debt, costly infrastructure projects, and poor financial planning left the country with dangerously low foreign reserves, meaning it couldn't afford essential imports like fuel, medicine, and food. Inflation skyrocketed, people took to the streets as essentials became scarce, and the economy effectively ground to a halt.
One notable example is Coco Lanka, a coconut-based beverage and food producer. With imports dwindling, Coco Lanka ramped up production of its coconut drinks and snacks, which were both affordable and locally sourced, offering a much-needed alternative to international products. The brand saw rapid growth, leveraging Sri Lanka's reputation for high-quality coconut products.
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Amid the protests, the government collapsed, and the country sought help from the International Monetary Fund (IMF), which provided a bailout. The IMF's involvement meant strict economic reforms, but it was the only viable solution to restore stability.
This economic storm demanded drastic adaptations for Sri Lankan businesses. Many companies re-evaluated everything from supply chains to product lines, realising that agility and local resourcefulness were the keys to survival. As Bangladesh has recently witnessed its own political upheaval, the lessons from Sri Lanka provide valuable insights.
How Sri Lankan businesses evolved post-2022
When the crisis hit, Sri Lankan businesses were confronted with skyrocketing operational costs, scarce resources, and a steep decline in consumer purchasing power. Survival demanded adaptability at an unprecedented scale, and businesses had to reorient their strategies around the essentials that consumers could still afford.
One notable example is Coco Lanka, a coconut-based beverage and food producer. With imports dwindling, Coco Lanka ramped up production of its coconut drinks and snacks, which were both affordable and locally sourced, offering a much-needed alternative to international products. The brand saw rapid growth, leveraging Sri Lanka's reputation for high-quality coconut products.
Coco Lanka's commitment to affordability and sustainability struck a chord with consumers, propelling it to global markets in addition to strengthening its domestic footprint. This adaptability highlights a lesson for Bangladeshi businesses, particularly in the FMCG sector, to turn to local resources and develop products that resonate with consumer needs during times of crisis.
Meanwhile, businesses heavily reliant on imports, such as electronics and luxury goods, took a major hit as foreign reserves dwindled. With imports prohibitively expensive, retailers shifted focus to affordable, essential items that matched the times. For Bangladeshi businesses, building flexibility into product lines and prioritising locally sourced materials can offer a buffer against similar economic shocks.
The popular participation in political change: A parallel for Bangladesh
In both Sri Lanka and Bangladesh, dissatisfaction with corruption, economic mismanagement, and governance issues contributed to the political change.
In Sri Lanka, government missteps in handling foreign debt, along with years of financial mismanagement, culminated in an economic crisis. Public protests surged across the country, ultimately forcing the leadership out of office. Sri Lanka's businesses quickly realised that adapting to the changing public sentiment and prioritising community needs were essential to maintaining trust and stability.
Bangladesh recently saw a similar upheaval, as mounting public frustration led to protests that eventually forced the former Prime Minister Sheikh Hasina out of office. This environment provides an opportunity for Bangladeshi businesses to foster trust through transparency and public accountability.
For example, in the FMCG sector, companies that emphasise fair pricing, consistent quality, and community support can build loyalty that becomes invaluable during turbulent times. Establishing a reputation for ethical practices and community engagement will not only strengthen consumer trust but can also help businesses withstand times of political and social upheaval.
The migration wave and talent drain
One of the most striking aftereffects of Sri Lanka's crisis was the surge in migration. Many skilled professionals, seeking stability and better opportunities, left the country. This "brain drain" posed a severe challenge to industries such as healthcare, IT, and engineering, leading to labour shortages and driving up costs for companies trying to retain skilled workers.
Bangladesh might anticipate a similar trend if political and economic conditions remain unstable. If skilled professionals migrate in significant numbers, it could impact consumer spending power, especially in urban areas, thereby affecting the demand for non-essential goods.
For FMCG businesses, this migration trend would mean a shift toward essentials and budget-conscious options, as middle-class purchasing power would likely weaken. Companies may also need to take proactive steps to retain talent by creating supportive work environments, offering growth opportunities, and providing competitive compensation.
Preparing for this possibility now by investing in talent development and building a resilient work culture can mitigate potential disruptions.
The rise of local industries and consumer loyalty
Sri Lanka's crisis also sparked a shift toward supporting local products, as imported goods became increasingly scarce and expensive. This opened the door for Sri Lankan brands to fill gaps left by foreign companies, promoting a "buy local" sentiment among consumers.
For instance, Dilmah Tea, already a staple in Sri Lankan households, ramped up its local branding and introduced initiatives to appeal to the national spirit, fostering loyalty that extended beyond just their products.
In the FMCG sector, emphasising the quality and reliability of locally made products can help companies build a strong brand presence that resonates with national pride. Additionally, investing in local supply chains, as many Sri Lankan businesses did, reduces dependency on imports and allows for greater control over resources, helping companies manage costs and maintain consistent availability.
Preparing the FMCG sector in Bangladesh for the journey ahead
Bangladesh's FMCG sector can learn a great deal from Sri Lanka's resilience in the face of economic and political turmoil. Here are some ways to be better prepared for similar challenges:
Focus on essentials and flexibility: Like Sri Lankan brands that quickly adapted to the demand for affordable, essential products, Bangladeshi FMCG companies should be ready to pivot to core items that meet basic consumer needs. Offering affordable, high-utility options can help maintain market share and build brand loyalty in challenging times.
Invest in digital infrastructure: The crisis in Sri Lanka accelerated digital adoption, with e-commerce becoming a lifeline for businesses. By investing now in digital infrastructure, Bangladeshi FMCG companies can prepare for shifts in consumer behaviour, ensuring they can reach customers directly if traditional retail channels are disrupted.
Strengthen community bonds: Building connections with consumers and local communities through ethical practices and transparency can be a significant asset. Sri Lankan businesses that prioritised resilience and community support found themselves in a stronger position when the crisis hit. In Bangladesh, brands can similarly enhance loyalty through CSR efforts, fair pricing, and product quality, reinforcing trust that sustains consumer relationships.
Localise supply chains: Reducing dependency on imports by sourcing locally can mitigate risks during global disruptions. In Sri Lanka, businesses that focused on local resources were able to keep operations running despite import restrictions. Bangladeshi companies, particularly in FMCG, can benefit from developing local supply chains, ensuring cost stability and supply consistency.
Talent retention and workforce stability: Given the possibility of talent migration, preparing for workforce retention by fostering a supportive, growth-oriented work environment can help retain skilled professionals in Bangladesh. Businesses that offer development opportunities and competitive compensation will have a stronger chance of keeping talent, even if external conditions become more challenging.
Another challenge that Sri Lankan businesses faced amid the economic crisis was the surge in smuggled or duty-free goods entering the market. As consumers tightened their budgets, demand for cheaper alternatives grew, creating an opportunity for untaxed, illicit goods to flow in.
For legitimate businesses, particularly in FMCG, this posed a serious threat, as they struggled to compete with these low-cost, unregulated products. The increased presence of black-market goods not only eroded market share for established brands but also disrupted pricing standards and weakened overall profitability.
For Bangladeshi businesses, the lesson here is to prepare for these external pressures by reinforcing brand loyalty and working closely with regulators to maintain fair competition in the market.
Sri Lanka's recent experience shows that political and economic crises profoundly impact business resilience. For Bangladesh, the recent political shifts and public discontent signal that it's time for businesses to adopt flexible, community-focused, and locally empowered strategies. Much like a cricket match where each turn demands a new strategy, Bangladeshi businesses can prepare for uncertainty by focusing on core strengths and drawing lessons from Sri Lanka; even when the pitch gets a little unpredictable.
Rahat Ara Kabir Kheya is a B2B Development Manager at BAT Bangladesh.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
