E-commerce enables the purchase and sale of goods or services on the internet. The payment mode is usually online monetary transfers or cash payment to delivery agents depending on the seller’s scale of production and preferences. With the advent of digitalisation and increase in penetration of the internet to most remote parts of the world, e-commerce has opened new avenues for people to start businesses and reach markets far from their location. Information and communication technology can play a significant role in a country’s growth and development by empowering different sections of people. In all societies, it is usually the women who have a disadvantaged position in the economy due to the societal constructs and are engaged in social reproduction, doing unpaid and undervalued work at home or underpaid labour in the informal sector.
E-commerce has played a pivotal role in empowering female entrepreneurs in the global South by providing them access to distant markets, by connecting them with delivery firms and by enabling them to collaborate with producers down the supply chain. Transnational corporations have used the opportunity provided by e-commerce to outsource the production activities to developing countries to avail the cheap labour available in those countries, to minimise their costs while maximising profits. These transnational corporations hire a major proportion of the female workforce that would otherwise have been unemployed and engaged in unpaid work. However, despite getting the opportunity to participate in paid employment, these workers are usually underpaid and overworked. These problems, such as payment below minimum wage rates or labour exploitation by extending the working hours in a day, are issues yet to be addressed by the developing country governments and other regulatory bodies.
The success of e-commerce in female empowerment is conditional on the access to internet services and the knowledge of using it. Thus, while e-commerce has been able to bridge specific gaps, such as the gender gap in entrepreneurship in urban areas, it has also intensified the inequalities faced by the marginalized sections in societies, having limited access to internet facilities.
Use of information technology and social media has strengthened e-commerce in India and provided numerous platforms to budding female entrepreneurs. Women in India, especially those in urban areas, who were previously unable to participate in paid work, utilised the advent of e-commerce to start businesses from their homes. Social media provides a medium for easy communication between suppliers and consumers, and with cheaper data costs in recent times, e-commerce has gained further momentum in India. Some female entrepreneurs have focused on employing mainly female workers from rural areas and utilising their skills in traditional arts and handicrafts to produce commodities marketed across the world via online e-commerce platforms.
Post the 2000s, with an increase in access to online transactions in Bangladesh; the e-commerce sector has seen rapid growth. This has also had a favourable impact on the female entrepreneurs in the country. As per the IDLC Finance Sector Review (2019), the Facebook market size in Bangladesh was worth $37 million (USD) and 50% of the Facebook stores were run by female entrepreneurs. E-commerce acts as a crucial medium to bridge gender gaps in entrepreneurship in the country. However, women continue to face obstacles in the access to resources, capital and opportunities. Women play a vital role in social reproduction in the Bangladeshi society like in all other communities; they bear the burden of unpaid care work at home and often do not have a say in the decision-making process due to households’ patriarchal structure. Despite increased female entrepreneurship, female-run businesses continue to fall prey to societal prejudices and are often deemed inefficient. While e-commerce has helped bridge gender gaps in entrepreneurship in Bangladesh, it has widened the rural-urban divide based on the differences in internet access in the two regions. E-commerce has benefited mostly urban women, while rural women continue to be restricted in traditional gender roles. A lack of proper monitoring and legal framework in e-commerce has led to a lack of organised activity in this sector. Massive potential in this sector remains to be unleashed yet.
Currently, there are nearly 6 million formal female-owned businesses in South-east Asian countries, including Indonesia, Malaysia, Thailand and Vietnam. However, female entrepreneurs continue to face struggles to obtain financial resources for their companies. In China, women need the identity proof of their husbands to apply for credit, while in the Philippines, women need to have the signature of their husbands on loan documents. Thus, despite e-commerce playing a role in women’s empowerment by providing them work opportunities they would otherwise not have had, the traditional patriarchal gender norms guide the conditions under which women operate in the e-commerce sector. In Indonesia, women mostly own small-scale businesses. Despite e-commerce raising the level of female entrepreneurship in Indonesia, there is a persistent gender gap in the labour force participation even in the e-commerce sector.
In Lao PDR, 63% of the small scale enterprises were owned by women, while men mostly owned relatively larger enterprises. Indonesia has a low level of participation from women in entrepreneurial activities, mostly due to the difficulties in gaining access to the finances required to set up businesses. Only 2% of Indonesia’s total population is engaged in entrepreneurship, and 0.1% of entrepreneurs in Indonesia are women. The responsibilities of caring for the children, the sick and the elderly mostly fall upon women, thus restricting their mobility and freedom of time-use. E-commerce has provided these Indonesian women with an opportunity to engage in paid work by starting their businesses that can also be run from homes and gain easy access to markets across and outside Indonesia through the internet.
The World Bank launched a $3.82 million regional project in the MENA countries called “E-commerce for Women-led SMEs”. The primary target of this project is the small and medium scale businesses run by women entrepreneurs; it aims to promote female entrepreneurship in the MENA countries and greater digitalisation of the economies that can enable these businesses to gain greater access to domestic and foreign markets. The Women Entrepreneurs and Finance Initiative is meant to help the female entrepreneurs overcome the barriers in attaining finances for their business. The World Bank project is intended to connect the women entrepreneurs with financial institutions to enable them to obtain institutional lending, provide them logistical support, and build resilient governments to develop these countries.
Problems and Policy implications
To ensure equitable access to these opportunities to women across countries, governments need to step up and implement individual policies that will make the internet ecosystem a lot more accessible to women in the global south. For example, a recent government survey in India, conducted across 22 states, showed four in five women in Bihar admitted that they have never accessed the internet. In order to truly ensure women empowerment within the e-commerce space, these problems need to be dealt with. The digital divide has become a lot more prevalent during the pandemic as most services, including education, went online—more comfortable access to the internet with help from government initiatives is the way forward. In the current scenario, we have mobile data that’s easily accessible due to cheap data costs and competition in the market; however, faster broadband connections, which work better than mobile connections, remain inaccessible. The Government of India, for example, has announced the development of wireless connection spots across the country. Even private players are trying to contribute to solving the problem by partnering with governments or taking on the issue independently. Most recently, we saw Google’s parent company, Alphabet, launch an internet balloon to remote parts of the world in order to make the internet reach corners. One of the biggest examples of how lack of access to speedy internet can hamper growth is reports of Kashmir’s e-commerce industry suffering due to 4G internet shutdowns.
Apart from the digital divide, there also exists the problem of not having access to skill training. To deal with such issues, in south Asia, EIF has joined forces with UNESCAP to build women entrepreneurs’ capacity to join e-commerce platforms to expand their business and participate in local, regional and global supply chains. The International Trade Centre’s SheTrades initiative provides individual training to female entrepreneurs in the fashion sector to gain more international customers through the internet.
And finally, on the access to the hardware front, an inspiring policy initiative has been the Rwanda project that aims at lending smartphones on credit to people that cannot afford well-functioning smartphones for trade purposes. According to this, the initiative is planned to help e-commerce activities, especially those of women.
As a thumb rule, these are fundamental problems that governments need to deal with in their way by learning from countries that are doing the same—especially those with the same growth trajectory. A recent report in India pointed out that Whatsapp e-commerce has grown immensely throughout the pandemic. The report showed how ensuring access to something as simple as smartphones and the internet has helped women in small towns conduct business in India. It’s vital to ensure that these technologies are used to help empower the disadvantaged and benefit them while also enabling the overall economy’s growth. Countries like India should include these factors into their e-commerce policies and implement them.
To conclude, factors that exclude women from the labour force do not benefit anybody. While it’s a given that every woman deserves (and has the right) to do what she likes regardless of economic benefit, it’s a hope that making an economic case will further motivate interest in her empowerment. Hence, when more women join the workforce, everybody benefits and it helps countries come out of poverty along with empowering the socially and economically disadvantaged.
The Rethinking Economics India Network (REIN) is the National Network of the global Rethinking Economics movement. It looks to organize locally against a background of social movements of which we are one part. Operating as a nation-wide ecosystem of stakeholders in the space of pluralist and heterodox economics, we interface with individuals, universities, civil society, and the private sector to scale collaborative efforts for teaching, learning, and discussion and build a movement for economics that is pluralist and inclusive.