Third Eye

E-commerce deepens women’s inclusion in enterprise

Friday, October 29th, 2021 00:00 |
E-commerce. Photo/File

One positive outcome from the Covid-19 restrictions has been a notable increase in the number of online businesses, most of which began their life as side hustles but came into full bloom during the pandemic.

This means people have become less traditional in their approach to business, although they have had to learn that lesson the hard way.

One other interesting observation has been that many these businesses are run by women, meaning that the digital space has fewer entry barriers for this segment of the population.

Traditionally, it has been hard enough for women to go into businesses, largely because ownership of capital is male dominated and, as a result, this restricts women’s access to credit because they lack collateral.

With e-commerce, however, some of these barriers are rendered redundant because one can list their goods and services on social media platforms like Instagram and, for a small weekly or monthly fee, can have these products actively promoted to attract the attention of a broader audience. This can lead to increased conversion rates.

Such trends open opportunities for women because they do not need a huge capital outlay to start their e-commerce enterprises, such as selling fast moving consumer goods and beauty products, which, according to a new survey conducted by Jumia, have emerged as the most purchased goods online.

From a consumer perspective, this finding implies that there were more women shopping online last year given that in 2019, the most purchased items were electronic goods such as phones, an indication that a large proportion of buyers were male.

As such, with more women shopping online, there are more opportunities for women-owned e-commerce businesses to emerge and grow through referrals or, as often happens these days, when shoppers identify market gaps that they then decide to plug.

What is more, there are many opportunities for collaborations be—tween small e-commerce businesses and the more established platforms like Jumia, who have a wider distribution network and who, for a fee, can offer logistical support through such services as delivery and mediation of payment solutions.

These two challenges are among the biggest obstacles to e-commerce, and not just for women, given that not every entrepreneur with a good product has capacity to distribute it beyond a small circle of friends, relatives and acquaintances.

With increasing adoption of e-commerce across Africa – driven by a sharp rise in smart phone ownership – there are more opportunities for women to ride on this wave to buy and sell a wide range of goods, including bespoke products that they make at home or through their hobbies, including food and apparels.

For them to leverage on this trend, which is expected to inject at least $18 billion into Africa’s economy over the next three years, women will need to be educated about what a digital economy means for them.

They will also need to understand how it can help them expand their traditional small-scale businesses, so that they can grow from selling fruits and vegetables in the estate kiosk to becoming digital “Mama Mbogas” serving a bigger market.

And since there is an increase in the number of logistics companies offering delivery services, this means e-commerce can give such businesses a limitless market if they are willing to innovate and have the capital to fund expansion.

One of the notable observations made by Stephanie von Friedeburg, a senior vice-president for operations at IFC – the World Bank’s private arm – is that in Africa, the number of online shoppers has been growing by 18 percent per year since 2014.

According to her, this number can grow faster if formal institutions invest in women-owned e-commerce businesses.

Which brings us to the next important point; that there is need for lenders – formal and digital – to be more deliberate in offering credit to women-led and women-owned businesses to give them a fair chance to thrive.

Traditionally, lack of access to credit has been the single biggest challenge that women-owned businesses have faced.

From a policy point of view, there will also be need for regulatory authorities to demand that lenders demonstrate what fraction of their loan book goes to women-run enterprises so that we make tangible progress from mere platitudes to measurable actions.

Such interventions will not only make women e-commerce businesses sustainable but, more importantly, will deepen their inclusion as active economic actresses contributing to Africa’s growth.

Done consistently and correctly, this has potential to reduce poverty and reduce gender income inequalities that have conspired to hold back the financial emancipation of women in Africa.— The writer is a Partner and Head of Content at House of Romford — [email protected]

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