Forthcoming LEAD study finds low participation among rural women entrepreneurs in e-commerce, but they show willingness to adopt
- A forthcoming study looks to understand the role of e-commerce platforms in empowering rural women’s enterprises considering technological advancements.
- Women entrepreneurs successfully leverage social-media platforms like Facebook, WhatsApp and Instagram in a few different spaces in India.
- The study uncovered that despite various infrastructural, institutional and individual barriers, rural women entrepreneurs show readiness to integrate digitalization into their enterprises.
LEAD has undertaken a study to understand the digital readiness of women entrepreneurs in rural India, particularly their willingness and their experience of participating in e-commerce and social commerce platforms. The researchers undertook a scoping exercise to understand the state of digitalisation in India focusing on e-commerce and also conducted in-depth interviews with 167 women entrepreneurs from rural and semi-urban areas of Kerala and Rajasthan to understand the ground realities.
The forthcoming study looks at existing government and non-government infrastructure to promote e-commerce, and emerging social commerce platforms (via Facebook and WhatsApp) and general ICT applications for use by women entrepreneurs (WEs) as a supply side effect. The WEs motivation and existing capabilities to use ICTs to their advantage in increasing visibility and combating market competition as the demand side effect.
By comparing the digital readiness of various Indian states through a few parameters, researchers found that states such as Andhra Pradesh, Kerala, Maharashtra, Karnataka and Madhya Pradesh occupy top positions, and states such as Bihar, Rajasthan, Odisha are placed at the bottom.
The e-commerce market in India is estimated to grow to US$200 billion by 2026 primarily driven by rapid internet penetration. In India, on an average, only 42.6 percent of women have ever used the Internet as against an average of 62.16 percent among men, the rural gender divide being even larger. The digitalisation of entrepreneurship will support rural women to take up independent entrepreneurship opportunities and overcome gender-based barriers related to mobility, access to financial services, opportunities for sales and managing financial payment services. Factors like the availability and accessibility to adequate digital infrastructure (fast, technology and platform, access to information and Communications Technology (ICT), training for functional, technical and technological literacy, social support play an important role in facilitating the success of digital integration in rural WEs.
The study classified women entrepreneurs who are digitally savvy into four key segments comprising (a) WhatsApp entrepreneurs who use only the social media application, WhatsApp for business promotion and communication with customers (b) social media entrepreneurs who use different social media platforms for business promotion and customers (c) e-commerce entrepreneurs who use different online marketplaces and delivery services for buying and selling products and (d) digital payment entrepreneurs who just use the digital payment facilities for their business activities.
The emerging findings from this study show that the large gender divide can be bridged through digital innovations that can be adopted by rural WEs of India. Commenting on this, Sharon Buteau, Executive Director at LEAD at Krea University and the lead researcher on the study, says “Digitalisation in the enterprise landscape holds promise for transforming the potential of rural women entrepreneurs by improving their social and economic independence. Despite barriers to access of digital devices and the internet, our study shows that there is willingness among rural women entrepreneurs to pivot to e-commerce and social commerce platforms to improve their business and marketing practices.”
Barriers faced by rural women entrepreneurs
The study analysed various factors that affect the uptake of digital tools, including the impact of infrastructure, institutional and individual barriers on the utility of digital tools, as well as level of engagement and awareness. Infrastructure barriers include access, time and training for technology, institutional barriers cover existing digital platforms or related initiatives (both by government and private institutions). Individual barriers comprise factors such as motivation, capability and adoption strategies of rural WEs.
Based on the in-depth interviews with rural WEs, the study finds that in terms of familiarity and knowledge of using e-commerce and social commerce, they find it difficult to navigate any platform due to a wide use of the English language. Some of the interviewed WEs know how to operate only WhatsApp and can connect with clients as per their requirement, albeit low sales through it. In some cases, their husbands are responsible for handling financial transactions, cash or online. With regards to digital payments and mobile banking, rural WEs are more familiar with digital application platforms such as Google Pay and use this regularly only for receiving money, while many do not use mobile banking.
The role of government-led and private e-commerce platforms
The study authors also undertook in-depth interviews with stakeholders from private and government e-commerce platforms. E-market places like the government owned Government E-Marketplace (GeM), showcases products like handicrafts, handloom and textiles, grocery and pantry, office accessories, personal care and hygiene products made by the SHGs and selected by block-level officials in various states under the State Rural Livelihoods Missions. However, currently the focus is primarily on procurement from only women SHGs and there is no platform for marketing, promotion or enhancing digital literacy.
Amazon Saheli partners with NGOs, government bodies, CSR wings and charitable trusts. There are partners who have been onboarded who have a reach of over 0.3 million women artisans. Onboarding, account handling and digital literacy of women entrepreneurs and SHGs is done by the partner organizations they are associated with. Flipkart Samarth caters to NGOs, Government Bodies, Rural Women, Disabled, Artisans, Weavers, Social Enterprises. Under the Samarth program, sellers can launch their products on the storefront sans commission for up to 6 months, letting them be extremely competitive with their pricing and increase their brand footprint.
Challenges in adoption of e-commerce by rural enterprises
Findings suggest that there is some awareness among entrepreneurs about the avenues for selling products online, but lack of awareness about onboarding procedures and modalities acts as a barrier. A concern for them is regarding the affordability factor while selling through e-commerce platforms. Almost all the women interviewed shared that there is an information gap on this and some suggested that it would be better to have orientation and hand holding capacity building programmes. The most basic issues that individual women entrepreneurs face is meeting the eligibility criteria to be onboarded onto these private ecommerce platforms. GST certification, incorporation and registration details and PAN number are just the first steps to be eligible to sell products online.
About LEAD at Krea University
LEAD, an action-oriented research centre of IFMR Society, leverages the power of research, innovation and co-creation to solve complex and pressing challenges in development. LEAD has strategic oversight and brand support from Krea University (sponsored by IFMR Society) to enable synergies between academia and the research centre. Initiative for What Works to Advance Women and Girls in the Economy (IWWAGE) is an initiative of LEAD (under IFMR Society), that aims to build on existing research and generate new evidence to inform and facilitate the agenda of women’s economic empowerment.