ECommerce Accelerates Opportunities for Women-led MSMES
Engagement in international trade provides many benefits for MSMEs including diversifying and expanding their market base, driving revenue growth and job creation, and increasing competitiveness. For these reasons intentional trade has been recognized as a powerful tool for creating economic opportunity and reducing poverty in developing economies.
However, women owned enterprises are far less likely to engage in international trade than their male-owned counterparts. This is driven by a variety of regulatory and cultural barriers that make not only business ownership, but engagement in international trade particularly difficult for women. Women owned businesses are typically informal small or mico enterprises, and often face greater barriers to accessing financing, skills, and other resources need to build a business and engage in international trade. Culturally women often also have greater domestic care responsibilities limiting their ability to engage in economic activity outside the home.
The rise in ecommerce has created new opportunities for international trade, helping women owned MSMEs overcome some of structural barriers that previously limited their opportunities to export and engage with new markets. New data from USAID funded-surveys shows that women-owned enterprises who engage in ecommerce are equally as likely as male-owned enterprises of the same size to export internationally. This trend has been shown to be consistent across different regions and enterprise sizes (small, medium and large), demonstrating the utility of ecommerce in creating economic opportunity for women-owned enterprises.
COVID-19 has only amplified the importance of ecommerce, as more enterprises have seen their traditional means for accessing both domestic and international markets shut down. Lorena Valente, is a mother and grandmother who supports her family with her business Trip-Shirt, which manufactures luggage covers, and other travel products. Before COVID-19 her primary source of sales was producing promotional accessories for business clients through her brick and mortar store. When sales dried up in 2020 Lorena invested in an 8-month intensive online training course through the Latin American Ecommerce Institute, a partner in USAID’s Alliance for eTrade Development II GDA (eTrade Alliance).
The digital skills she acquired through the training allowed her to improve the company’s website, building the digital tools to make online sales and pivoting her market offerings to include direct to customer sales. Although it is still early to measure the impact of her investment she is hopeful that the skills she’s acquired in digital marketing and the broader online sales platform that she’s established for her business will not only allow her to survive the current crisis but create international market growth opportunities for the future.
Access to the digital skills and tools is still a significant obstacle preventing women-owned MSMEs from engaging in ecommerce and gaining access to international markets. The eTrade Alliance is working with partner Visa to identify the key barriers and the capacity building programs that have been shown to be most effective in addressing these barriers for women-owned MSMEs. Common issues highlighted by women-owned MSMEs include digital marketing and digital literacy, accessing regional or international market platforms, processing cross-border digital payments, and the cost of cross-border logistics. Many women, like Ms. Valenta, also highlighted the importance of mentorship and networking opportunities for female entrepreneurs. For female owned MSMEs these opportunities to learn from each other and build networks across industries and regions through online trainings are also invaluable.
The USAID supported eTrade Alliance is working with 11 private sector partners to offer a comprehensive set of programs to address these skills gaps, support networking, and pilot innovative solutions to cross-border payments, finance and logistics issues that limit MSMEs engagement in ecommerce. The Alliance is currently funding 130 scholarships for women-led MSMEs in South America through the Latin American eCommerce institute and planning to expand skills trainings to women-led MSMEs in Asia and Africa as a first step in accelerating women-owned MSME’s access to the benefits of ecommerce. By working with private sector partners the Alliance aims to develop sustainable training and networking opportunities for female-led MSMEs globally, facilitating greater participation in ecommerce and accelerating their integration into the global economy.