No place for women entrepreneurs? Can e-commerce reverse low share of women-led businesses in India Inc

Published: February 1, 2020 9:59:40 AM

Unfortunately, women-owned business form only 13.8 per cent of enterprises in India. Rural India alone has approximately 8.1 million businesses.

80 per cent of women-owned enterprises have only one worker, the entrepreneur herself.
  • By Sandeep Varaganti

Very few countries have seen more entrepreneurial potential than India. It’s home not just to the wave of IT offshoring firms of the 1990s and early 2000s, but also to some of the most traditional forms of businesses that have sustained themselves for decades in the face of rapid change. Over the past decade, the Indian e-commerce sector has witnessed an inflow of large amounts of capital from investors. This has helped grow the digital economy and has presented a huge opportunity for entrepreneurs in the country. It has subsequently opened the doors of entrepreneurship to scores of people in the country, especially women, who were held back by the shackles of traditional methods of business. E-commerce has not only helped identify women entrepreneurs but also helped them taste success across businesses like apparel, baking and handicrafts among many others.

What caused this transformation?

A lot of credit for this goes to the emphasis on connectivity created by the Digital India movement. It has enabled the availability of cheaper phones, lower data tariffs and increased digital literacy, more so in rural India. To put this into perspective, India currently has 124 mn women who access the internet on their phone. Even the e-commerce market in India is estimated to grow to $200 bn by 2026 on the back of rapid internet penetration. This availability of access to technology, various platforms and increased literacy (female literacy rate has gone up from 37% in 2011 to 57 per cent in 2014 as per MHRD Report from 2018) has helped women realize the potential e-commerce brings to their lives.

What does it mean for India?

We are a country with the 7th largest landmass on this planet, with the second-largest population, where most businesses are a monopoly of men. In such a scenario, e-commerce platforms provide women entrepreneurs the ideal platform to access larger markets, tailor their products and services to specific needs, followed by improving their market and business skills. A Forrester report outlined that non-metros and rural India combined account for about 60 per cent Gross Merchandise Value (GMV) on Indian e-commerce platforms. This is a testament to the huge opportunity available for women in India’s Tier II and III towns to make a mark for themselves. A global e-commerce giant has also opened multiple women-only delivery stations to create more jobs in an otherwise male-dominated field. Such opportunities go a long way in helping women break social barriers like familial pressure and gender stereotypes.

Pitfalls

Unfortunately, women-owned business form only 13.8 per cent of enterprises in India. Rural India alone has approximately 8.1 million businesses. However, only 20 per cent of these sellers use online platforms. This could reflect the lack of infrastructure or awareness about the benefits of e-commerce platforms in these areas. It is surprising to note that most women-owned enterprises lack the facilities and the manpower required to further ramp up their business and therefore generate very little revenue. What is appalling is that 80 per cent of women-owned enterprises have only one worker, the entrepreneur herself, and only 0.5 per cent of enterprises have 6 to 10 workers. 

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With the advent of e-commerce, many practices synonymous with traditional ways of doing business have become a thing of the past – making it extremely feasible for Indian women to participate. Heavy investment, a core component of traditional business, has been completely bypassed. There is no need for a physical setup to sell online, ensuring that operating costs come down, while the quality of services is improved.  The other primary challenge it helps women entrepreneurs overcome is a geographical boundary- with a physical store, they are limited by the geographical area they can cater to. Services like cataloguing, warehousing, accounting, digital payments have further enabled this growth. And with a product listing on an e-commerce platform, the world is for them to conquer.

Can women make it big in e-commerce?

There are many lesser-known success stories of women in e-commerce. One of them is Sushmita Singh’s Naanjil, an online aggregator. Naanjil works with artisans on a range of unique handcrafted items ranging from toys and decor items to sarees and other handloom crafts. In 2019, Naanjil joined an e-commerce platform’s program and registered a growth of 2X growth in sales and there has been no turning back since.  An initiative by the Ministry of Women and Child Development, Mahila E-Haat provides marketing support by showcasing products made/ manufactured/ sold by women entrepreneurs on the Rashtriya Mahila Kosh website. And if you thought only conventional products made it big, there is a surprise in store. HairPro Laser cap, India’s first home-use wearable device, was started by Pragya Jhunjhunwala. It has brought affordable laser therapy to many homes in India through e-commerce to help men and women deal with hair thinning and hair loss.

The road ahead

The global average of women’s workforce participation is 48 per cent vis-à-vis India’s 27 per cent. Avenues like e-commerce can help bridge this gap and add $700 billion to our economy, making women an inseparable aspect of our $5-trillion dream. Women entrepreneurs require adequate infrastructure, further access to technology and platforms to establish their enterprise on an e-commerce platform. This would also include training them in running a business and expanding them, as well as equipping them with knowledge about technology that will assist in scaling their business. All this will enable millions of women to be employed and generate income. Because ultimately, it is about helping women differentiate between a dead end and a door to success that e-commerce has opened for them.

(Sandeep Varaganti is the CEO and MD at Prione, a JV between Amazon and Narayana Murthy’s Catamaran Ventures. Views expressed are the author’s own.)

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