Micro-entrepreneurs in the creative industry: how resilience overcomes the impacts of the pandemic

Abstract

Purpose

This study aims to understand the resilience process through the initiatives of micro-entrepreneurs at a creative fair to deal with an external shock context.

Theoretical framework

The study is based on the resilience lens and seeks to add new reflections on this lens in the context of social commerce.

Design/methodology/approach

A case study was conducted on the changes brought about by COVID-19 in the creative industry. Interviews were carried out with micro-entrepreneurs in Crato, in the state of Ceará, Brazil. In addition, regional decrees were collected to analyze

how micro-entrepreneurs reacted to the implementation of measures against the spread of COVID-19.

Findings

It was possible to create a framework that reflects how micro-entrepreneurs saw the trade fair before the pandemic and their resilient and adaptable attitudes to overcome external shocks and sell their products through social commerce on the Internet.

Practical & social implications of research

This study develops new reflections on resilience and the role of social commerce, in addition to filling gaps in the understanding of micro-entrepreneurs’ resilience. In addition, this study can help micro-entrepreneurs understand how social commerce can help develop their businesses.

Originality/value

This article managed to fill some gaps about the resilience of micro-entrepreneurs in the creative industry. It also showed that social media were used to overcome the external shocks caused by COVID-19. However, the physical space is still important for this type of market, even during a pandemic.

Keywords:
Trade fair; resilience; s-commerce; creative industry

1 Introduction

World commerce has suffered drastic changes due to the SARS-CoV-2 pandemic, commonly known as COVID-19. This virus emerged at the end of December 2019 (Ejaz et al., 2020), and soon the transmission capacity was very high, causing governors to seek ways to avoid higher disease transmission. The measures recommended by the World Health Organization (WHO) were to avoid crowded places, maintain physical distance, wear a face covering, keep rooms well ventilated, wash hands, and cough into a bent elbow or tissue (World Health Organization, 2021).

In Brazil, the large geographical area of the country - 8.516 million km² with 26 states and the Federal District - hindered the synergy of governors regarding the strategies to be adopted to fight the pandemic (Borelli & Goés, 2020). The main measures adopted were legislative decrees aimed at maintaining social isolation, which included the closure of several types of stores, with the exception of those that sold essential products or services. Businesses outside this scope had to close their doors to comply with the regulations, which reduced the country’s gross domestic product (GDP) by 4.1% (Instituto Brasileiro de Geografia e Estatística, 2021). In Brazil, the creative sector includes 251 thousand companies, whose production is responsible for 2.6% of GDP, constituting an organized creative economy network based on small entrepreneurs, small businesses and, in most cases, self-employed people without registered companies (Itaú Cultural, 2023). In this sense, confinement was the main way to keep people safe, since they had to stay at home to avoid contracting or spreading the disease.

The trade fair economy has been and continues to be affected by the disease (Barbosa, 2020), as fairs are only about selling, but also about developing a social space for people to interact (Rajagopal, 2010). Moreover, the COVID-19 pandemic has significantly impacted micro-entrepreneurs in the creative industry, which relies heavily on social interaction to promote the commercialization of their products and offer immersive experiences to their customers (Canedo & Paiva No., 2020). Creative industry fairs that focus on this sector must have physical spaces that encourage socialization and foster an atmosphere of interaction to facilitate the exchange of ideas and experiences among participants (Gerhard & Peñaloza, 2018). These spaces are crucial for promoting cultural products, allowing consumers to engage with and appreciate the creative work of micro-entrepreneurs (Pavo, 2020). Thus, developing such physical spaces is vital for the growth and sustainability of the creative industry. In the face of the measures restricting social interaction, micro-entrepreneurs adopted a digital transformation process to sell their products (Barbosa, 2020) on social networks and sought to share their experiences.

Regarding the use of social networks to sell products, there is a term that describes this virtual market: social commerce - or s-commerce - which is a type of commercialization involving social networks as an intermediary between sellers and buyers (Shen & Eder, 2011). The rapid development of services in social networks, such as Facebook and Instagram, has increased the tools for many brands to create fan pages and commercial profiles to attract consumers (Chiang et al., 2019). Thus, micro-entrepreneurs in the creative industry are moving to these social networks to reduce the impact of COVID-19 on their sales. In this sense, resilience is a way to understand how micro-entrepreneurs deal with external shocks (Erkip et al., 2014).

While there is a body of research examining organizational resilience, little attention has been paid to the role of the physical spaces in which creative firms commercialize. Moreover, it is important to note that the “places” in which these firms operate are not merely physical locations, but rather the atmosphere and environment of these spaces, which includes the relationship between the creative firms and their customers. As noted by Andres and Round (2015) and Portuguez Castro & Gómez Zermeño (2021), understanding the dynamic relationship between small creative firms and their workspaces is crucial for identifying the factors that contribute to their survival. Therefore, it is important to investigate how the absence or inadequacy of this atmosphere in such spaces may hinder the operations of creative firms and undermine their ability to adapt and thrive amidst uncertainties. Similarly, Korber and McNaughton (2017) note that it is necessary to understand exactly how micro-entrepreneurs react to external shocks. Furthermore, Abed (2020) states that there are few empirical studies on the adoption of s-commerce by micro-businesses. Thus, this study aims to understand the resilience process through micro-entrepreneurs’ initiatives at a creative fair to deal with an external shock context.

This study managed to create a conceptual framework that reflects how micro-entrepreneurs viewed the trade fair before the pandemic and their resilient and adaptive attitudes to overcome external shocks and sell their products through social commerce on the Internet. The case study investigated the micro-resilience process of 12 (twelve) micro-entrepreneurs in the Cariri region, Ceará, Brazil. The state of Ceará was one of the states where the decrees were more restrictive to the operation of fairs compared to other states (see Figure 1). It is also one of the states that have suffered the most from deindustrialization in recent years. The study develops new reflections on resilience and the role of social commerce, in addition to filling gaps in the understanding of micro-entrepreneurs’ resilience.

Figure 1
Timeline for the publication of the decrees by the State Government of Ceará

Furthermore, this study can help micro-entrepreneurs understand how social commerce can help develop their businesses. This article was able to fill some gaps about the resilience of micro-entrepreneurs in the creative industry. It also showed that social media were used to overcome the external shocks caused by COVID-19. However, physical space is still important for this type of market, even during a pandemic. Finally, the model resulting from the study is expected to be tested in different locations in Brazil where small businesses shifted between physical and virtual environments as a survival tactic.

2 Resilience to external shocks in micro-enterprises

Resilience is a crucial factor for business success, since this factor helps companies to overcome the disturbances and problems that can impair the organization’s development (Portuguez Castro & Gómez Zermeño, 2021; Stumpp, 2013). In fact, there is a truth in the researchers’ thoughts. They believe that resilience occurs when external shocks suddenly appear and postpone the enterprise’s actions (Williams & Vorley, 2014; Andres & Round, 2015; Korber & McNaughton, 2017).

Gerhard and Peñaloza (2018) state that the concept of resilience originated in the natural sciences. Lang (2010) asserts that resilience is the ability to stabilize a system despite a disruption. Moreover, Stumpp (2013, p. 164) states that resilience is “[...] the need for intensified collaboration between different disciplines and between science and practice”, and in this line of thinking, Lang (2010) states that concepts of resilience seek to describe the integration of solution insights that emerge when hard times such as economic or health crises occur unpredictably. Thus, resilience is a process through which “[...] the feasibility and vitality of an urban core can only be sustained through the resilience of different retailers” (Erkip et al., 2014, p. 113). This is due not only to the variability but also to the sustainability that exists in the relationship between economic resilience and trade fairs (Conz & Magnani, 2020; Erkip et al., 2014; Erkip & Ozuduru, 2015; Shutters et al., 2021).

Specifically, informal retail systems must be more resilient than formal ones for several reasons, including the number of resources and planning processes to deal with crises. Shopping centers are more inviting in cities, and these establishments strategically invest in new ways to attract consumers and create public spaces for socialization or other types of entertainment (Erkip et al., 2014; Gerhard & Peñaloza, 2018). In this sense, it is possible to observe that trade fairs have more difficulty remaining in the market, either in a competitive environment (Rajagopal, 2010) or in a disruptive crisis that may appear (Lang, 2010).

Trade fairs, also called penny markets, swap meets, and merchandise marts (Maisel, 1974), “[...] are considered more as social organizations with ethnic congregations than business networks” (Rajagopal, 2010, p. 278). These fairs cover much more than just the buying and selling of products. There are also different types of trade fairs, such as those that sell only fresh produce (e.g., fish, fruit, vegetables) (Rajagopal, 2010) and others that sell handicrafts (Maisel, 1974; Sherry Jr., 1990). In this study, we evoke creative trade fairs, such as those for handmade toys, clothes, and food, where innovative products are commercialized.

Micro-resilience is the resilience process of micro and small companies in the creative industries. Andres and Round (2015) proposed micro-resilience based on Martin’s regional resilience theory. Micro-resilience is the regional resilience process typical of micro and small companies in the creative industry, as these are already born in an adverse context of economic slowdown and insecurity. These companies can adapt by leveraging shared knowledge, coping tactics, and a sense of community within their business or social environment.

Many studies approach resilience to survive crises, especially in small and medium enterprises (SMEs) (Andres & Round, 2015; Portuguez Castro & Gómez Zermeño, 2021; Fitriasari, 2020; Smith et al., 2020). For example, Smith et al. (2020) investigated how fishermen adapted to the impacts of COVID-19. Owenvbiugie (2020) sought to understand how resilience influenced the survival of SMEs. These manuscripts further reinforce the need to understand how different micro-enterprises react to external shocks.

3 Social commerce as a resilience tool

The rapid development of the Internet and the increased use of social media are transforming the market (Shin, 2013; Chiang et al., 2019). Consumers use social media to acquire products more effectively (Abed, 2020) and with greater bargaining power (Kim, 2012). Social commerce (s-commerce) is seen as a valuable tool for companies’ relationships with their customers, and if this connection is managed professionally, big advantages can be created (Abed, 2020; Chiang et al., 2019). Once on the Internet, enterprises have more opportunities. However, increasing the opportunities to go online helps to create more competitors. Therefore, people are likely to perceive the usefulness of technology and social commerce, which leads users to use this segment for their shopping (Abed, 2020).

Regarding the conceptualization of social commerce, researchers have different interpretations. Abed (2020, p. 2) states that social commerce “[...] is a combination of commercial and social activities”; that is, websites combine several features to enable their users to sell peer-to-peer (e.g., Facebook Marketplace) without the intermediation of a store such as Amazon (Chiang et al., 2019). Moreover, Shin (2013) believes that it is a new form of electronic commerce that can use social media to trade goods and services, and this idea is widely defended by Chiang et al. (2019), Bugshan and Attar (2020), and Abed (2020).

Social commerce enables a stronger social interaction between sellers and buyers (Costa & Castro, 2021; Shin, 2013), which leads us to reflect on the concept of a virtual sharing economy, where people can create individual accounts and sell their products or create a single social network, further expanding the interaction of small entrepreneurs, improving operations, and widening the reach of businesses (McCann & Barlow, 2015).

The idea of sharing is common at trade fairs, since creative values support the spread of the sharing environment (Gerhard & Peñaloza, 2018). Moreover, the collaboration between merchants at trade fair expands the capacity of these businesses to be more flexible and adaptable (Erkip & Ozuduru, 2015), making them increasingly resilient to external shocks that may arise. In this context, social commerce through trade fairs tends to be a great way to overcome COVID-19, although few manuscripts focus on the relationship between social commerce and small and medium enterprises (Abed, 2020).

4 Method

Along with the theoretical foundation, it is possible to recognize that all micro-entrepreneurs who depend on physical trade fairs must be resilient to new challenges. Moreover, it is important to mention the limitation regarding the resilience context and object of study of this article, in which the context is penny markets. In this context, merchants at the Cariri Criativo Fair (a trade fair) and Casa Ucá (a collaborative store) were selected to examine their actions against the barriers suddenly imposed on their businesses by COVID-19. The Cariri Creative Fair is a project organized by the Federal University of Cariri to promote the creative micro-entrepreneurs, artists, and artisans linked to the creative economy in Cariri, Ceará, Brazil. Casa Ucá, on the other hand, is a private establishment organized by an ex-merchant of the Cariri Criativo Fair. This place seeks to promote the collaborative economy by encouraging local micro-entrepreneurs to display their products in the store.

However, it is important to highlight that the interviews were first conducted with the main managers of the Cariri Criativo Fair, those who helped to make the fair happen. Through the snowball effect, new contacts emerged from the managers to be able to interview other micro-entrepreneurs who had already sold at the fair or who started to sell their products during the pandemic. In order to detail the preparation of the interview script, it is worth mentioning that people involved in the organization of the fair were interviewed before the data collection with the traders started. This first data collection took place in July 2021. After the interview script was completed, the second data collection was conducted through interviews with traders in August of the same year.

A qualitative case study was carried out since this method helps to understand the case and the external influences a priori, such as the society in which it is embedded and the public policies adopted by the regional government (Stake, 2005). Regarding the case study, it followed Stake’s line of thought based on instrumental research to analyze a case whose essence is “[...] to provide insight into an issue or to redraw a generalization” (Stake, 2005, p. 445), that is, to understand the trade-off adopted by the merchants to create a collaborative profile in social networks and not in big e-marketplaces of the country, for example.

A review of government decrees on the pandemic was carried out to analyze the main points where traders needed to adapt to the obligations proposed by the government. In addition, semi-structured interviews were conducted with the micro-entrepreneurs of the fairs based on the theoretical lenses of resilience and social commerce (see ^{Appendix A}. Interview script for new merchants (NM) and ex-merchants of the fair (EMF) and ^{Appendix B}. Interview script for main managers of Cariri Criativo). They were carried out between July 1^st and August 31^st, 2021, in order to better understand their resilience and give them more freedom to respond to the phenomenon (Braun & Clarke, 2012; Flick, 2009).

In summary, our research involved the collection of data and the manual transcription of interviews using the oTranscribe website. We applied three different types of analysis (^{Appendix C}. Supplementary data 1 - Techniques_used): (i) content analysis, following Bardin’s (2016) guidelines, was employed to code the existing content within the decrees; (ii) thematic analysis, as described by Ayres (2008) and Braun and Clarke (2012), was used to categorize the interviews; and (iii) we conducted discussions centered around the themes derived from the previous analyses, employing narrative and pattern matching techniques inspired by Trochim (1989). It is important to note that we used MAXQDA to organize and analyze the data. These three analytical approaches were chosen due to their complementary nature and their ability to uncover different aspects of the data. Content analysis reinforces our exploratory efforts by facilitating the discovery of insights through the lenses applied (Bardin, 2016). On the other hand, thematic analysis serves as a strategy to delve into and reconstruct new concepts based on the data and theoretical frameworks at hand (Ayres, 2008; Braun & Clarke, 2012).

4.1 Participant characteristics and information about the decrees

The interviews were conducted so that the researchers could immerse themselves in the field to be studied based on the experiences of merchants working in the creative industry (Braun & Clarke, 2012). Therefore, 12 people were interviewed, eight of whom had already participated in the Cariri Creative Fair (who were coded as ex-merchants of the fair - EMF), and four of whom had only participated as fair customers and who started working in the creative industry during the pandemic (new merchants - NM) (see ^{Appendix A}. Interview script for new merchants (NM) and ex-merchants of the fair (EMF) and ^{Appendix B}. Interview script for main managers of Cariri Criativo). This division into groups helped to analyze the different perceptions among merchants and how each group viewed the pandemic. A total of 572 minutes and 8 seconds of interviews were transcribed (an average of 52 minutes and 7 seconds per interview), and it was possible to summarize the participants’ socio-demographic data (Table 1). Regarding the decrees, 83 decrees that specifically dealt with controlling the transmission of coronavirus were extracted from the website of the Government of Ceará (Governo do Ceará, 2020).

Table 1
Socio-demographic data of the participants

Code	Code %	Gender	Age	Main source of income	Educational level	Marital status	Average family income	Financial dependents
EMF1	66.66%	F	55	Creative industry	High school graduate	Married	R$ 10,000	Granddaughter
EMF2		F	27	Creative industry	Incomplete college degree	Single	R$ 2,500	Son
EMF3		F	43	Creative industry	College graduate	Married	R$ 9,000	Daughter
EMF4		M	44	Creative industry	Postgraduate	Married	R$ 12,000	Two sons
EMF5		M	32	Creative industry	High school graduate	Married	R$ 2,400	None
EMF6		F	34	Creative industry	College graduate	Divorced	R$ 6,000	Son
EMF7		M	27	Professor	Incomplete postgraduate degree	Single	R$ 6,000	None
EMF8		M	36	Maintenance manager	College graduate	Single	R$ 5,000	Daughter
NM1	33.34%	F	44	Creative industry	High school graduate	Single	R$ 2,400	None
NM2		F	37	Creative industry	Incomplete college degree	Single	R$ 2,400	Daughter
NM3		F	25	Scientific scholarship	Incomplete college degree	Single	R$ 3,600	None
NM4		F	32	Creative industry	College graduate	Divorced	R$ 2,500	None

As shown in Table 1, some traders have already participated in the fair and their income is much higher than the others (EMF1, EMF3, and EMF4). During the interviews (See Supplementary 2 - transcriptions of intervews), it was possible to note that through the fair, these merchants managed to create a loyal clientele, since their businesses already had a certain maturity that was greater than the others, and they managed to maintain themselves during the pandemic. In this case, it was only necessary to change the way the products were sold in order to comply with the decrees and prevent the spread of the pandemic. Finally, it is important to mention that EMF1, EMF5, EMF6, EMF7, EMF8, NM1, NM2, NM3 and NM4 used the physical space of Casa Ucá to display their products.

5 Findings and discussions

Building upon Korber and McNaughton’s (2017) argument that the existing literature lacks a comprehensive discussion of the conditions and contextual circumstances in which entrepreneurial resilience applies, it is imperative to further explore the concept. Merely assuming that resilient entrepreneurs and their firms will outperform others, regardless of the challenges they face, overlooks the nuances of the issue. While most of the existing literature focuses primarily on economic downturns, resilience has been recognized in a variety of contexts, including psychological trauma, short-term disasters, and gradual socio-ecological changes (Rose, 2007; Portuguez Castro & Gómez Zermeño, 2021; Korber & McNaughton, 2017).

A fundamental aspect is to develop a deep understanding of entrepreneurial resilience within historical, temporal, institutional, spatial, and social contexts. These contexts not only provide individuals with different opportunities, but also define the boundaries within which they can act (Welter, 2011). As such, context serves as both an asset and a liability for individuals involved in entrepreneurship, providing entrepreneurial opportunities while imposing constraints on their actions. By examining these multifaceted contexts, researchers can gain a comprehensive understanding of the interplay between resilience and the various factors that shape entrepreneurial outcomes.

In the context of the Cariri region, its development is deeply connected to the pilgrimage movements of devout individuals, which have contributed significantly to the flourishing of religious tourism (Menezes & Batista, 2022). This notion is further emphasized by the author, who highlights that the municipalities of Cariri have nurtured their creative economy through a unique blend of faith and culture. Within this framework, the economy has seamlessly integrated popular cultural characteristics that interweave people’s beliefs with their everyday work. This symbiotic relationship between the economy and popular culture is particularly important in small municipalities, as it not only drives economic growth but also preserves and strengthens the local cultural heritage (Santana et al., 2023). By applying the principles of the creative economy, these communities can harness the power of their rich cultural traditions to generate sustainable development, attract visitors, and improve the overall well-being of their residents.

To highlight the main categories identified by the interviewees in this research, it is important to underscore the categories identified by Andres and Round (2015) in their study. First, the authors emphasized expertise and production flexibility as forms of micro-resilience. Production efficiency and flexibility play a crucial role in ensuring the resilience of small and medium-sized creative enterprises (Borin et al., 2018). These companies are constantly faced with challenges related to precariousness and risk, and they continuously adapt to ensure their survival. In this context, the importance of an entrepreneurial approach and product excellence is emphasized to ensure customer satisfaction and business longevity. The small size of these companies is seen as an asset that stimulates adaptability and innovation (Andres & Round, 2015). Various forms of adaptation are explored, such as diversifying revenue sources, controlling costs, seeking partnerships, and using informal networks (Borin et al., 2018). These strategies are associated with building trust, enhancing reputation, and developing expertise (Abed, 2020). In summary, both physical space and people are considered important elements for micro-level resilience (Andres & Round, 2015).

Another category highlighted by Andres and Round (2015) seeks to contextualize space and explore its importance in the resilience of small and medium-sized creative enterprises. In a context of urban and economic uncertainties, the location of creative industries has proven to be a crucial supporting factor in facing the challenges of economic recession (Comunian & England, 2020). The flexibility of the space, combined with strategic location choices, rent levels, and the overall design of the environment, plays a fundamental role in shaping resources. It is important to emphasize that the historical legacy of a place also plays a significant role in the identity and visibility of creative enterprises (Martin, 2012). The representation of the past and the history of the space contribute to creating a sense of belonging and give authenticity to the activities carried out by these businesses (Santana et al., 2023). Therefore, the connection with the location and its historical roots creates a sense of continuity and tradition, while at the same time adding value to the brand.

Furthermore, the locality of the space plays a vital role in micro-level resilience (Andres & Round, 2015). Proximity to other creative agents, cultural institutions, and innovation centers provides opportunities for collaboration, knowledge exchange, and networking, strengthening the competitive position of creative enterprises (Borin et al., 2018). The presence of a unique and distinctive built environment also provides a non-monetary, attribute-based competitive advantage that contributes to the development of the companies’ reputation and creates a lasting competitive advantage (Martin, 2012). In summary, the benefits provided by space and location as non-monetary competitive advantages are essential levers for the resilience of small and medium-sized creative enterprises. By recognizing and capitalizing on the unique characteristics of the space, these companies can strengthen their ability to adapt to change, face economic challenges, and create an environment conducive to innovation and continuous growth.

Andres and Round (2015) also emphasized the importance of networks, communities, and a flexible workforce. The importance of locality and space intersects with the micro-level resilience mechanisms of small and medium-sized enterprises (SMEs), particularly regarding people and how networks, community engagement, and a flexible workforce enable adaptability (Khurana et al., 2022). The clustering ability of creative industries is pivotal in this argument, as it facilitates the circulation and exchange of information, creating fluid channels for knowledge sharing. Spatial clustering is a significant factor for SMEs located in specific regions, as being present where a critical mass of creative industries exists makes sense in an industry that relies heavily on networks and contacts (Andres & Round, 2015). Networks and word-of-mouth play a central role in successful business development (Ruswanti et al., 2020). They foster a sense of community and provide potential support for SMEs, especially during economic crises when everyday coping strategies such as favors, information exchange, and recommendations are employed. The importance of networks extends beyond emotional support and also impacts companies’ reputation and competitiveness. In addition, workforce flexibility, including the ability to transition from formal employment to freelance work and the use of volunteers and interns, contributes to the adaptability and resilience of SMEs (Khurana et al., 2022). This flexibility is crucial during economic downturns, allowing companies to adjust their development strategies and maintain a creative and efficient workflow (Martin, 2012). In summary, locality, networks, and workforce flexibility play a vital role in the resilience of SMEs facing economic challenges.

The comparison of the traders’ perceptions is presented in light of the impacts of the pandemic and how the decrees made it difficult or possible for merchants to continue generating their income through the creative industry despite the inactivity of cultural fairs and the lack of physical, social interaction. In addition, Figure 2 summarizes the relationship between resilience and the merchants’ adaptability, the importance of cultural fairs, and the creative industry.

Figure 2
Overview of themes regarding traders

The three central themes in Figure 2 highlight the main approaches of the theoretical framework, showing the relationship between the theory and the language of the findings (Trochim, 1989). Subsequent ramifications were created from the reflections obtained during the data analysis and the next topics. Two colors were used to indicate which group was more concerned with each theme; black represents EMFs and white represents NMs. Finally, the dotted and continuous lines, which may involve some issues, highlight which points had more notable similarities or differences according to the people interviewed.

5.1 The importance of cultural fairs and the creative industry: how merchants see a trade fair

5.1.1 Economy

Cultural projects aimed at small entrepreneurship within cultural and creative fairs encourage merchants to develop their products and innovate whenever possible (Ozuduru et al., 2014). In addition, fairs such as Cariri Criativo provide many opportunities for local merchants to sell not only in the region but also in other places, as these creative fairs can attract many tourists to the place where the products are sold, as described by one of the interviewees:

Wherever you go in the world, there’s always a typical fair where producers get together. You’re in a place where other people produce and promote the local economy, right? You discover new flavors, recipes, things like that, because there are people who produce; they’re people who create. (EMF4, September 14^th, 2021).

As a result of the pandemic, three interviewees turned to the creative industry as their main source of income, some out of necessity, as they lost their jobs and needed to support their families, and others because they saw that there was an opportunity in the market for handcrafted products, mainly for decoration. Moreover, more experienced merchants feared the arrival of the health crisis because they did not know if they would be able to continue selling their products in physical environments.

5.1.2 Culture (skills and cultural heritage)

They believe that it is of paramount importance to transmit the cultural features of the Cariri region. In addition to the existing desire to represent culture through handcrafted products, the micro-entrepreneurs also have a tangible cultural heritage and acquire artistic skills and techniques from their parents and grandparents. From this perspective, it is important to emphasize that some micro-entrepreneurs had the will to learn, which facilitated the transfer of experience from ancestors to contemporaries (Pavo, 2020), generating not only a cultural transfer, but also revolutionizing the traditional with creative features, since this is a strong characteristic of micro-entrepreneurs (Portuguez Castro & Gómez Zermeño, 2021).

5.1.3 Space

The restrictive measures created by the State Government of Ceará to combat the transmission of COVID-19 drastically impacted the physical interaction at the fair. After the creation of the first decree (March 16th, 2020), every event was called off, making it impossible for people to go anywhere except to essential places such as supermarkets and hospitals. In this sense, even though the flexibilization increased from June to September 2020 (Decrees No. 33,637 and No. 33,737), the Cariri Criativo Fair did not return. Therefore, what remains are only the memories of the merchants who already participated in the fair.

However, due to the great importance that merchants and consumers place on physical interaction, some micro-entrepreneurs sought to maintain this personal contact, either by having the products delivered by the producers themselves or by having a physical meeting after all the sanitary measures had been taken, as in the case of interviewee EMF8.

We decided that this was the moment […] to present the product, right? We decided to be ourselves, to reach out to the customer, and present an offer. It’s totally different when you have a business. You go there to sell to the customer, and an employee goes, a salesperson goes, you don’t transmit the feeling that you’re there with your product […] in your hands to show it to your customer, you know? And we decide… today our sales and deliveries are processed by the owners, you know? (EMF8, September 17^th, 2021)

New merchants who started working in the creative industry during the pandemic are keen to participate in the fairs when they return, as these people have already participated as customers and have seen how enjoyable the social atmosphere of the fair is. The more experienced traders who have already sold at the creative fair are very affectionate when the issue of relationships and ties created during the fair is raised. Some even see their family, as interviewee EMF1 says:

In the beginning, there was a time when we actually worked as a family. It was so cool to see. We had those dates just to really meet, eat, drink a little, and listen to good music somewhere. All together. It was really cool (EMF1, August 10^th, 2021).

The content analysis of the decrees makes it possible to note the greater flexibility for large companies, such as shopping malls and supermarkets, making small companies more resilient than others. From this perspective, Ozuduru et al. (2014) argue that the large-scale development of large stores can lead to the deterioration of small stores, impacting the sustainability of the region. Therefore, it is possible to note key reflections on the survival of small businesses, since they need to struggle to sell their products and maintain themselves in the market.

The Cariri Criativo Fair was very important for small merchants to have the opportunity to display their products due to two main factors: (i) there was no cost of renting a physical store as in a shopping mall, which creates an advantage for small businesses and supports the financial adaptability mentioned by Andres and Round (2015); and (ii) the fair was able to attract many people to the place, generating more visits and greater movement of people, which is in line with the findings of Rajagopal (2010), who says that fairs can develop and expand the integrality of the region through their social aspects. Thus, by adding social values, physical interactions, and the ability to display products, it is noted that the fairs have strong positive points that stimulate the willingness of merchants to participate in them, as well as the willingness of customers to visit the stalls, to see the products displayed and have the opportunity to interact with other people (Pavo, 2020).

5.2 Resilience of merchants

5.2.1 External shocks

The pandemic has impacted people in many ways, but the health crisis has also brought opportunities, especially for new merchants. These opportunities were only possible because of the existing informality to create a company on social networks, which confirms the thoughts of Andres and Round (2015), who say that the use of informal networks is able to make work more flexible and allows creative workers to grow in a stimulating environment. The marketers had to look for other types of products to be able to support themselves, as NM2 reports, saying that

[...] it was just by chance and I tell you, quite clearly, since this is the focus, it was because of the pandemic in my case; otherwise, I would’ve continued in my business without looking at it so much and it would‘ve continued to be a hobby and not a source of income (NM2, September 06^th, 2021).

Despite negative external shocks, this situation should not necessarily be unfavorable. It can create new opportunities that can lead to greater benefits. The uncontrollable external factors that trigger such changes can lead to greater flexibility, which in turn can increase the adaptability and resilience of the organizations (Andres & Round, 2015; Lang, 2010). In another prism, some traders had to stop completely during the most critical periods of the pandemic, as they had family members in the at-risk group, as interviewee EMF6 recounts:

Apart from the financial side, which, somehow, weighs heavily because you have to go out and balance what you can and can’t do any longer. The advantage is that we didn’t go out, so we didn’t spend any money. I even joke about it: “If there’s no climbing, there’s no abseiling.” So, I didn’t spend any money, but stopping everything for Juliane was a painful process, a difficult choice within the context, right? To dedicate myself to others, right? It was kind of tough and, like, now we’re going through therapy, we’re training to dilute this process from last year. (EMF6, September 14^th, 2021).

5.2.2 Changes

As a result of the uncertainties caused by the pandemic, the increased lack of awareness of the time factor at home, or the need to close their doors completely, traders had to reinvent themselves. In other words, they were not prepared for this pandemic. Nevertheless, they did not stop being resilient, which contradicts the thoughts of Conz and Magnani (2020), who say that resilience is the capacity developed by the company before an external event occurs. According to the interviewees’ statements, the pandemic forced people to adapt and re-adapt when necessary (Portuguez Castro & Gómez Zermeño, 2021). In addition, the development of anxiety was evident in both groups, whether the new traders in the creative industry or the more experienced ones, given that at the beginning of the isolation period some merchants admitted that they spent their days not knowing what to do and with no creativity to produce (Portuguez Castro & Gómez Zermeño, 2021).

During the pandemic, some merchants realized that they would need to change their products in order to continue selling. They noted that this was a big challenge for them, as they did not want to create such disruptive products that would cut off the connection to the region’s culture, but they also did not want to always produce the same thing to generate more attractiveness through photos on social media (Costa & Castro, 2021). Therefore, some people used creativity to create products that would attract different audiences, as interviewee NM3 states:

[...] we work with crochet, you know? I mean creative crochet, not those conventional pieces we’re used to seeing at our mothers’ and grandmothers’ houses. They’re different pieces, more modern, more mindful of design, you know? […]. (NM3, September 07^th, 2021).

Another aspect felt by the new traders was the excess work due to the need to give up leisure and family obligations in order to fulfill an order and deliver it on time (Canedo & Paiva No., 2020). Unlike in work relationships, the new entrepreneurs realized that even when they plan to fulfill orders, the need to attract customers makes them give up weekends, as interviewee NM4 says:

We try not to have to work on weekends. We don’t always succeed because many people still forget that handcrafting takes time, right? People place an order one day and want to receive it the next. “No, but I need it for tomorrow. Isn’t that possible?” Then I take a breath and see, because, well, I’m not here and… I can’t afford to lose a customer, right? I can’t afford to lose any sales, so we take a breath and say “okay.” Then we sometimes spend the weekend working, but we try not to. (NM4, September 01^st, 2021).

5.2.3 Conscience

The decrees were the main factors that prevented the opening of several establishments during the pandemic, and merchants were very concerned about what the next decree would be, whether it would be stricter or more flexible, since some products could be marketed in other establishments in addition to fairs, such as bars, restaurants, and bakeries (Portuguez Castro & Gómez Zermeño, 2021; Fitriasari, 2020). Nevertheless, people were aware that it was necessary to comply with the decrees to control COVID-19 contamination, as stated by respondent EMF7, who said that “[...] the decrees... interfered, but it was a necessary evil” (EMF7, July 27^th, 2021).

At the beginning of the pandemic, the State Government of Ceará imposed restrictions on the movement of people to minimize COVID-19 contamination, including sanitary measures, travel bans, and social isolation. This strong restriction by the State Government of Ceará worried all traders, as strict measures prevented small companies from continuing their physical operations. However, between August and December 2020, there was a decrease in measures to combat COVID-19 and an increase in trade flexibility (Figure 1). Then, with new waves of pandemic contamination, the government had to increase restrictive measures from January 2021 (see Figure 1).

The ambiguity experienced by merchants due to the significant shifts between greater flexibility and greater rigidity caused by the decrees encouraged them to focus on their online business. The merchants sought other alternatives to sustain their businesses, reinforcing the idea of ​​resilience in these spaces (Sowatey et al., 2018). An example of this can be seen in the account of interviewee NM2:

It was difficult at the beginning of the pandemic. I was completely lost because, yes, my business closed completely and I couldn’t rent any place for five months. Then the government opened a small window and we reopened, if I’m not mistaken, from August to December, from August to January. In February we closed again and I put more effort into it and it wasn’t difficult to sell, no. I didn’t think so. Quite the opposite, it was surprising. (NM2, September 06^th, 2021).

It is important to highlight the opening of Casa Ucá - a collaborative store - given that it took place during the pandemic, on December 17^th, 2020, and yet the establishment managed to attract merchants and consumers to the physical location to purchase the products. At the same time, the restrictive measures and flexibility began to decrease, but this did not concern the managers of Casa Ucá, as one of the managers at the site stated, according to interviewee EMF7:

Many people criticized and didn’t believe me: “Are you crazy? Are you going to invest in an old house? Open a business in the pandemic?” Then I said: “Look, folks. I’m going to open it. The worst thing I can do is lose money, but, hey, that’s life. Money was made to invest, to earn, to lose. If not... patience. (EMF7, July 27^th, 2021).

This initiative was quite accurate, as both new and experienced merchants knew that the physical environment was important for displaying their products. This idea that the physical senses are quite important for selling products is also revealed in the findings of Sowatey et al. (2018), who say that the physical environment can display the products and convey greater credibility to consumers. In addition to the need to display the products, the merchants noticed an opportunity at Casa Ucá, which brought good results for those who adopted the idea, as interviewee EMF8 states:

We’ve been selling our beer at Casa Ucá since the time of Cariri Criativo, and then Saymo opened the house and, goodness! For me it’s the best place in Crato today. He’s one of our biggest customers, from Kurato. It’s Casa Ucá. (EMF8, September 17^th, 2021).

5.3 Solutions generated by social commerce during the pandemic

Interaction. An interesting point observed through the interviews is the affection that merchants see from their consumers, since of the 12 people who were interviewed, there was only one negative comment about the taste of a product, and that comment was more focused on the suggestion of altering a product than a negative review, which enables the sale of the product, creating credibility for the consumers themselves, a key aspect that exists in s-commerce (Abed, 2020). Other than that, all merchants received many positive comments, which encouraged them to produce their products with greater enthusiasm, as stated by interviewee NM3:

So, seeing this positive feedback is very important. It gives us a feeling of immense gratitude. It helps a lot in the creative process because when you see that you’re pleasing someone, you feel more willing and excited to produce more. So, I think it’s a huge boost when you get that positive feedback, especially on social media. (NM3, September 07^th, 2021)

Many people started using social networks more frequently to pass the time while isolated at home, which made the merchants realize the current opportunities to sell their products according to the consumers’ needs.

In addition to the need to migrate the exposure of their products to social networks, small traders also need to study what, how, and why people like the products sold to consumers, thus reinforcing the need to adapt to the space in which they are embedded (Costa & Castro, 2021).

5.3.1 Need for social commerce

Instagram is the social network most highlighted by marketers, and a reason for using this network can be seen in NM4’s statement, which says that Instagram “[...] is free and has a lot of visibility. It’s on the rise” (NM4, September 01^st, 2021). Being in the digital environment is a clear necessity for all respondents, which supports the findings of Chiang et al. (2019) and Abed (2020), but it is also a challenge for one reason: algorithms. However, this term is unknown to some small traders, which makes it even more difficult for sellers to reach their target audience through social media (Fitriasari, 2020).

It is worth noting that the lack of algorithms does not prevent marketers from being able to reach many people; what Instagram wants is for people to stay longer on social networks, so if a post is liked or stays longer on the mobile screen, the algorithms will deliver the post to other people. This is what happens with the products of interviewee NM2, who said: “We already had a very good acceptance from the beginning through social networks. On Instagram especially, it’s very busy, we’re always selling through Instagram” (NM2, September 06^th, 2021).

The digital world was a way to overcome the barrier created by the pandemic in terms of selling products, with companies that have completely migrated to social networks, as interviewee EMF8 states: “Practically, our media today is 100% digital social network; this means that today they have the ease of the Internet” (EMF8, September 17^th, 2021). However, not all merchants have adapted to the digital environment; some people have feelings such as shyness, embarrassment, or even a matter of personal taste, which can generate intrinsic anxiety and annoy merchants who are not so familiar with social networks but are aware that it is necessary to be there, as interviewee EMF3 says:

That’s one of the things I ask myself a lot, because they tell us to post every day, that we have to engage frequently, and that’s something I don’t really like to do, but I post at least once a week, not every day, but weekly. (EMF3, September 02^nd, 2021).

In short, social media was widely discussed as an important tool for business continuity during the health crisis that worsened the global economic situation. In addition, all merchants saw the need to be on social media to reach more customers, as interviewee EMF1 said: “I think it’s very important. Social media today is a wonderful way to make sales, for you to grow and for your product to become better known” (EMF1, August 10^th, 2021).

5.3.2 Limitations of social commerce

Whether an interviewee has already participated in the fair as a seller or just as a consumer does not matter; everyone sees that in s-commerce it is impossible to have a very important factor within the fairs: physical interaction. All respondents miss the human warmth that existed before the pandemic, which was one of the factors that increasingly attracted several people to the fairs (Ozuduru et al., 2014). Chatting through an electronic device is, according to interviewee EMF2, “[...] something quite different; being able to see the customer, talking in person, having them know up close who I am and I know who they are, not just a photo or a voice” (EMF2, September 21^st, 2021).

In addition to the lack of physical contact, merchants found it difficult to increase the number of people interested in their products through social networks, since anyone can access them once on the Internet. Therefore, if the product is very attractive, a person can contact the sellers with a few clicks, which can make it difficult to manage the relationship with the traders’ customers and, consequently, overload them, as respondent EMF5 explains: “[...] with the pandemic, it becomes more difficult for you to stay on your cell phone all day, talking to people. [...] there are 30 people, and we’d take the time of our lives just to talk to these people” (EMF5, September 12^th, 2021).

The emergence of social commerce during the COVID-19 pandemic is due to the resilience of micro-entrepreneurs in the creative industry who face obstacles on the platform. One of the main challenges is to communicate the quality and beauty of the products through photos without the tactile experience. This lack of assertiveness can be interpreted in two ways: negatively, leading to demotivation and hindering the creative process of traders, or positively, as customers who make purchase decisions based on photos may have expectations exceeded when receiving their orders. It is important to highlight that the research presents a new category of analysis, social commerce, which extends the categories previously proposed by Andres and Round (2015). Social commerce research offers valuable insights into the challenges faced by merchants during the pandemic, and it underscores the importance of resilience.

6 Conclusions

In order to understand the resilience process through micro-entrepreneurs’ initiatives in a creative fair to deal with an external shock context, it was possible to identify several themes that were able to show their views in the face of the pandemic and the resilience needed to overcome it. In addition, it was possible to fill the gap perceived by Andres and Round (2015) regarding the relationship between small creative businesses and the places where they work, and to understand exactly how micro-entrepreneurs react to external shocks, a gap highlighted by Korber and McNaughton (2017).

A conceptual framework was developed in this study, which aimed to reflect the micro-entrepreneurs’ perception of the Cariri Criativo Fair before the pandemic and their resilient and adaptive attitudes in overcoming external shocks through social commerce on the Internet. The research sheds new light on resilience and the role of social commerce, while filling gaps in the understanding of micro-entrepreneurs’ resilience. Moreover, the study provides valuable insights for micro-entrepreneurs to understand how social commerce can be leveraged for business development. It is worth noting that all micro-entrepreneurs who rely on physical trade fairs have had to be resilient to new challenges, as observed in the Cariri Criativo Fair and Casa Ucá establishments. These physical spaces provided a context for the study, showcasing how the creative economy in Cariri, Ceará, Brazil, adapted to the challenges of the pandemic. While the pandemic has demonstrated the effectiveness of social media as a sales channel, physical spaces remain important for creative micro-entrepreneurs, artists, and artisans to showcase their products. The Cariri Criativo Fair, organized by the Federal University of Cariri, and Casa Ucá, a private establishment, are examples of initiatives aimed at promoting the collaborative economy in Cariri, encouraging local micro-entrepreneurs to display their products.

After the government began its efforts to control the transmission of COVID-19, people began to migrate from their small businesses to social commerce in order to keep in touch with their customers and maintain their source of income. This shift was one of the main ways to be resilient to the market, since the flexibility for small companies was not as great as for large companies.

We can see that merchants were unable to remain in the physical market, since their products were not characterized as essential according to the decrees of the Government of Ceará (2020). As much as the pandemic has brought uncertainty to everyone, micro-entrepreneurs need to look for ways to recover through the digital world to sustain themselves. Therefore, they managed to be resilient to the setbacks caused by the health crisis, and some of them saw that s-commerce could not only meet their survival needs (Abed, 2020; Chiang et al., 2019), but also leverage their businesses. Finally, it is clear that merchants see the need to continue producing content on social media (Martin, 2012). However, they know that s-commerce cannot add value to the existing atmosphere of cultural fairs, which is necessary to prove their importance (Gerhard & Peñaloza, 2018).

Social commerce is a great tool to meet the need for sales and, on the surface, interaction with the public. However, the absence of the warmth and atmosphere of the fair encourages merchants to return to the physical environment, even if they can sell more through social media.

Regarding the limitations of the study, we can highlight that the object of the study is limited to only one region, which prevents the generalization of the interviewed merchants’ perceptions to other places and countries. Therefore, as a suggestion for future research, we recommend covering the geographical area to understand how different traders have adapted to the pandemic and whether the respective findings are congruent with the findings in this manuscript. In addition, quantitative research can validate models related to the themes developed from the collected data (Figure 2), such as how the need for social commerce can positively influence merchants’ intention to use social media. Finally, qualitative research can delve into Figure 2 to understand its influence on micro-entrepreneurs, whether from the creative economy or other economies.

Appendix A Interview script for new merchants (NM) and ex-merchants of the Fair (EMF)

Introduction

What is your main source of income?

What was your first contact with the Fair?

Did you sell any products at the Fair? Which ones?

Questions about resilience

Before the pandemic, did you have any difficulty selling your products?

What resources did you use to promote your product? And now?

What changed for you before and after the pandemic?

Has social isolation interfered with your activities? In what way?

Were you notified about the decrees prohibiting the Fair? How did you feel about it?

How were you notified?

Do you display your products at Casa Ucá? What are they? Why?

Do you use your social networks to advertise your products?

How do you see using social networks as a means of promoting products?

Questions about social commerce

How do you feel when you see positive comments about your products on social media?

Have you ever seen any negative comments? What was your reaction?

Is there a lot of interaction? Do you usually talk to the public?

What can you say about the difference between physical interaction with customers before the pandemic and virtual interaction during the pandemic?

Conclusion

How do you evaluate your professional future after the pandemic?

What is your age?

What is your level of education?

What is your marital status?

What is your average family income?

Does anyone depend on you financially?

Appendix B Interview script for main managers of Cariri Criativo

In addition to the interview script in ^{Appendix A}, there were some specific questions for the main managers of Cariri Criativo.

Introduction

Could you tell me a little about your professional history?

How is/was your performance at the fair?

How did Cariri Criativo work? How was it organized?

How do you evaluate the relationship between the entrepreneurs at the Fair?

Do you know where the entrepreneurs of the Fair went?

How did you organize yourself with the arrival of the pandemic?

How do you evaluate the Fair in terms of digital aspects?

Questions about Casa Ucá

How did Casa Ucá come about?

Casa Ucá was an idea, but there was no help. Did the pandemic help you speed up the process of creating Casa Ucá?

Did the decree disturb you a lot? For what reasons?

How is Casa Ucá’s social network organized?

You say that you are a collaborative space. How do you see this collaboration at Casa Ucá?

How do interactions between you and customers take place?

What is the relationship between Casa Ucá and the Fair?

What do you expect from the return of the physical Fair?

How do you perceive Casa Ucá after the return of the Cariri Criativo Fair?

Socio-demographic questions

What is your age?

What is your level of education?

What is your marital status?

What is your average family income?

Does anyone depend on you financially?

Appendix C Supplementary data

Supplementary material accompanies this paper.

Supplementary data 1 - Techniques_used

Supplementary 2 - transcriptions of intervews.

This material is available as part of the online article from: https://doi.org/10.7910/DVN/OIWCPE

Acknowledgements

Supporting research agencies: National Council for Scientific and Technological Development of Brazil (CNPq - Process 433530/2018-9) and Cearense Foundation for Supporting Scientific and Technological Development (FUNCAP - Process BP4-0172-00128.01.05/22). We are also grateful to the anonymous editors and reviewers of the Revista Brasileira de Gestão de Negócios, who constructively contributed to the improvement, refinement and quality of this article. In addition, we would like to thank the vendors at Feira Cariri Criativo and Casa Ucá who helped in the development of this research.

• Evaluation process: Double Blind Review
  This article is open data
• How to cite: Lessa, P. W. B., Gondim-Matos, B., & Valdevino, A. M. (2023). Micro-entrepreneurs in the creative industry: how resilience overcomes the impacts of the pandemic. Revista Brasileira de Gestão de Negócios, 25(3), p.353-372. https://doi.org/10.7819/rbgn.v25i3.4234

• Financial support:

  Supporting research agencies: National Council for Scientific and Technological Development of Brazil (CNPq - Process 433530/2018-9) and Cearense Foundation for Supporting Scientific and Technological Development (FUNCAP - Process BP4-0172-00128.01.05/22). In addition, we would like to thank the vendors at Feira Cariri Criativo and Casa Ucá who helped develop this research.
• Open Science: Lessa, Patrick Wendell Barbosa; Matos, Beatriz Gondim; Valdevino, Antonio Messias, 2023, “Supplementary data - Micro-Entrepreneurs in the Creative Industry: How Resilience Overcomes the Impacts of the Pandemic”, https://doi.org/10.7910/DVN/OIWCPE, Harvard Dataverse, V1
• Copyrights: RBGN owns the copyrights of this published content.
  Plagiarism analysis: RBGN performs plagiarism analysis on all its articles at the time of submission and after approval of the manuscript using the iThenticate tool.

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Responsible editor:

Profª Dra. Gisela Demo

Reviewers:

Siegrid Guillaumon; Yuri Enes

Publication Dates

• Publication in this collection
  20 Oct 2023
• Date of issue
  Jul-Sep 2023

History

• Received
  16 Jan 2023
• Accepted
  03 Sept 2023