How women in developing countries can harness e-commerce

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This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Annette Ssemuwemba, Deputy Director, Enhanced Integrated Framework, World Trade Organization


• E-commerce has the potential to level the economic playing field for women in developing countries.

• Government, the private sector, aid programmes and civil society need to team up to ensure women’s digital access.

• Action is needed on both policy and the skills base.

Ugandan fashion designer Daphine Kyaligonza sells her colourful dresses, tops and menswear at a number of shops she runs in Kampala. Now she also sells her items via her website to people all over the world. But she wouldn’t have made the move to e-commerce without mentoring and training.

Commerce used to mean the exchange of goods for money, with a customer physically visiting a store, choosing from a variety of selections and paying a specified amount. Now of course that physical presence is increasingly unnecessary with the emergence and growing prevalence of e-commerce, which is providing more opportunities for businesses across the world like Kyaligonza’s to sell at any time of the day or night.

 

For women-owned micro-, small- and medium-sized enterprises (MSMEs), especially those in the least developed countries (LDCs), the potential to benefit is even greater. Why? Because digital spaces should conceivably provide both men and women with equal opportunities. Further, given cultural barriers in some societies that require women to stay in the house, e-commerce offers women the liberty to work from home while expanding a business.

How can women in LDCs take advantage of this? Are they equipped to reap the benefits that e-commerce offers? And what do they need to succeed?

The top reason among women for not using the internet is lack of know-how
The top reason among women for not using the internet is lack of know-how
Image: Webfoundation.org

The female connectivity gap

While there is significant potential for e-businesses to grow in LDCs, the environment in many countries is not conducive to such enterprises developing and thriving – and this is especially so for women-owned MSMEs.

The first and fundamental requirement for an e-business is access to the internet. The data from ITU shows that one in seven women in LDCs uses the internet, compared with one out of five men. Further, most e-commerce transactions are carried out by phone, and studies show that there is still a gap in female connectivity. Although awareness of mobile internet is growing in most markets, it remains consistently lower for women than men. Once online, women are 30 to 50% less likely than men to use the internet to increase their income or participate in public life.

MSMEs in the e-commerce space struggle with basic infrastructure challenges like establishing functional supply chains and reliable logistics. E-trade readiness studies undertaken by UNCTAD reveal deficiencies in various areas such as strategies and policies for e-commerce development, payments, legal and regulatory frameworks, and access to financing, among others. Only 14 out of the 47 LDCs have legislation for online consumer protection. For women, these challenges are exacerbated given the limitations they face like access to finance and skills, as well as cultural barriers.

In order to ensure no one is left behind in this space, governments, the private sector, aid for trade programmes such as the Enhanced Integrated Framework (EIF), and civil society all have complementary roles to play. The following actions need to be prioritized, with some fast-tracked in view of technology’s rapid rate of change.

Proportion of men and women using the internet around the world
Proportion of men and women using the internet around the world
Image: ITU.int

Cambodia leads the way on policy

The policy space is the most important area of change needed. LDC governments need to improve and update the legislative and regulatory frameworks covering consumer protection, private security of transactions, ICT and payment infrastructure. EIF is currently supporting nine countries to carry out eTrade Readiness Assessments, a process that enables countries to prioritize the actions necessary to harness the potential of e-commerce. This is particularly important considering that only 1% of all aid for trade is allocated to ICT solutions.

Cambodia was one of the first countries to undergo an eTrade Readiness Assessment in 2017, and has been using the analysis to guide its digital trade efforts. The Ministry of Commerce mapped the assessment’s recommendations and has worked to better align them with donor priorities. The study laid the groundwork for chapters on e-commerce and ICT in the recently launched Cambodia Trade Integration Strategy Update 2019-2023. Building on this, EIF is now supporting Cambodia to develop a robust e-commerce ecosystem, and a Cambodia-owned and -managed marketplace. This support is especially targeted at women-owned businesses and provincial MSMEs to tackle identified bottlenecks and grow their businesses online.

Skilling up for the future

Capacity is critical in empowering MSMEs to thrive in the e-commerce space. Potential female digital entrepreneurs in LDCs cannot get businesses up and running unless they have the skills required. But what skills do they need?

It is essential to first identify those needs, then deliver training accordingly. EIF is working not only to identify and improve the skills of entrepreneurs, but also offers LDC governments what they need to ensure they can formulate and implement policies that create an e-commerce-ready environment.

In south Asia, EIF has joined forces with UNESCAP to build the capacity of women entrepreneurs to join e-commerce platforms to expand their business exports and participate in local, regional and global supply chains. Similarly, in the Gambia, the International Trade Centre’s SheTrades initiative is providing one-on-one coaching to entrepreneurs in the fashion sector, so they can target international customers online.

Providing coaching and mentoring opportunities to entrepreneurs so they have the knowledge and experience they need to succeed has enabled female entrepreneurs to grow their businesses in the digital space.

What is the World Economic Forum doing about digital trade?

What is the World Economic Forum doing about digital trade?

The Fourth Industrial Revolution – driven by rapid technological change and digitalization – has already had a profound impact on global trade, economic growth and social progress. Cross-border e-commerce has generated trillions of dollars in economic activity continues to accelerate and the ability of data to move across borders underpins new business models, boosting global GDP by 10% in the last decade alone.

The application of emerging technologies in trade looks to increase efficiency and inclusivity in global trade by enabling more small and medium enterprises (SMEs) to repeat its benefits and by closing the economic gap between developed and developing countries.

However, digital trade barriers including outdated regulations and fragmented governance of emerging technologies could potentially hamper these gains. We are leading the charge to apply 4IR technologies to make international trade more inclusive and efficient, ranging from enabling e-commerce and digital payments to designing norms and trade policies around emerging technologies (‘TradeTech’).

In Uganda, young fashion entrepreneurs are marketing their products to those outside the country through social media like Facebook, Instagram and Pinterest. Kyaligonza is one of those who received mentoring and training, and has opened a virtual clothing store beyond her Kampala shops. She has in turn passed her knowledge on to the young fashion designers who work with her, enabling all of them to meet the online demand for African clothes and fabrics. As a result, she has international customers who place orders virtually, pay directly through their phones using WorldRemit and other platforms, and receive their goods via international couriers. Her international customer base is growing exponentially.

E-commerce should be considered one of the driving forces in women’s economic empowerment. Let’s make sure we make it happen.

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