Women and e-commerce: the $ 300 billion opportunity


Closing the gender gap on online platforms means being able to put billions of dollars in the wallets of women entrepreneurs and exponentially grow global e-commerce markets. This blog is written by Stephanie von Friedeburg, Senior Vice President of Operations at the International Finance Corporation (IFC).

The COVID-19 pandemic has highlighted the potential and limitations of the digital economy. For businesses large and small, business success increasingly depends on optimizing online sales.

Safer:

Women and economic growth

Entrepreneurship

Africa

South East Asia

Technology and innovation

But technological advancements do not always translate into equality advancements for women, who consistently lag behind men in accessing and using the digital marketplace. At IFC, our goal is to ensure that disruptive technologies drive economic development for all and disrupt existing practices. Electronic commerce is a sector that has long been overlooked as a driver of development.

The future of e-commerce lies in emerging markets. The value of the African e-commerce market is expected to quadruple between 2020 and 2030. In Southeast Asia, sales on e-commerce platforms tripled between 2015 and 2020 and is expected to triple again by 2025.

Our new research focuses on e-commerce in three African countries (Kenya, Nigeria and Ivory Coast) and two in Southeast Asia (Indonesia and the Philippines) and finds that this growth could be, unsurprisingly, even higher if women entrepreneurs participated at equal rates to men on these platforms. This potential makes it all the more important for economies to bridge the gender gap.

Women and e-commerce in Africa and Southeast Asia: current trends

Newly published reports, Women and E-commerce in Africa, and Women and e-commerce in Southeast Asia, leverage data from Jumia and Lazada, two of the largest e-commerce platforms in Africa and Southeast Asia, respectively. The reports are the first to demonstrate the extent of women’s participation in e-commerce and how online platforms can benefit women business owners. A key finding is that closing the income gap between male and female sellers by 2025 would yield $ 14.5 billion in additional market value in Africa and $ 280 billion in Southeast Asia by 2030, or a gain of nearly 300 billion dollars between the two regions, which is equivalent to everyone on the planet about a month of internet.

There are two ways to do this:

Safer:

Women and economic growth

Entrepreneurship

Africa

South East Asia

Technology and innovation

First, increase the number of women who sell online. Some markets, like Indonesia and Cote d’Ivoire, show low levels of female business owners, both online and offline. A key avenue would be to recruit women who use informal social commerce tools, such as WhatsApp or Facebook Messenger, and help them move to formal e-commerce platforms where they can access larger markets.

Second, increase the sales of women-owned businesses. Even when women are active e-commerce salespersons, they are more likely to have smaller businesses and fewer employees, and their average sales are lower than those of men. COVID-19 has compounded this disparity. For example, the report finds that in Africa, women’s sales have fallen by seven percentage points, while men’s sales have fallen. Pink the same amount. Unfortunately, this result is consistent with a growing body of literature showing that women-owned businesses, both online and physical, have been disproportionately affected by the pandemic. We cannot afford to make this the norm.

Four Actions Ecommerce Platforms Can Take to Close the Gender Gap

Increasing the number of women entrepreneurs on e-commerce platforms, as well as their sales on these platforms, will require actions such as inclusive connectivity policies, the design of financial services for women and the strengthening of women’s digital skills. . IFC research also reveals that e-commerce companies can lead the way. The reports identify four key actions for ecommerce platforms to recruit saleswomen and increase sales and profits:

  1. Targeting women entrepreneurs for training: Women in all markets were more likely than men to report that they appreciated the business training provided by e-commerce platforms, although women and men reported similar ratings for the ease of use of the platforms. .
  2. Design financial technology offerings for women: Women entrepreneurs face a global financing gap of nearly $ 1.5 trillion. Many platforms are deploying fintech offerings for loans and payments, but these do not always reach women. Our research found that only 7 percent of women in Africa have taken advantage of funding from an e-commerce platform. The platforms can use vendor sales histories to provide services to entrepreneurs who might otherwise not be eligible for loans due to lack of guarantees or formal credit histories.
  3. Encourage value gainadded services: In Africa, we found that women were less likely than men to use paid platform services and advertising. Training women entrepreneurs on how these services influence product rankings and sales, and encourage targeted adoption, can help equalize sales.
  4. Collect data disaggregated by sex: IFC research benefited from unique access to data from Jumia and Lazada as well as independent surveys of female and male salespeople. Implementing the recommendations will require regular monitoring of key gender-disaggregated indicators on recruitment, preferences and salesperson performance.

COVID-19 largely reversed women’s early success in e-commerce, with women suffering more losses than men in all of the markets studied. E-commerce platforms have a major role to play in accelerating the growth of all businesses, while mitigating the disproportionate negative impacts of the pandemic on women entrepreneurs. As the research also shows, the nearly $ 300 billion that can be added to the e-commerce market in just five years could conversely mean just under $ 50 billion lost for each year that the gaps between sexes are not corrected.

Decisive moments to transform the economic status of women around the world are rare, but COVID-19 and the post-pandemic recovery offer one of those rare and critical moments. We cannot afford to miss this opportunity for development and a fair future for all.


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