Africa could add nearly $15Billion to the value of its total e-commerce business by 2030 if women in the continent matched their sales on these digital platforms to that of their male counterparts by 2025, research findings have shown.
This is according to the International Finance Corporation (IFC) report titled Women and E-commerce in Africa.
The report, which covers studies on women in Kenya, Nigeria and Core d’ Ivoire, mentions that achieving this growth in Africa’s e-commerce will require that more women start selling online and, second, their sales perform as well as men.
While African women entrepreneurs are actively participating in e-commerce but require support to grow. On the Jumia platform, 35 per cent of businesses in Côte d’Ivoire and 51 per cent of companies in Kenya and Nigeria were owned by women.
When comparing formal business ownership between the Jumia platform and national statistics, women-owned businesses were better represented on the Jumia platform in both Kenya and Nigeria.
The report draws some similarities that translate from the broader economy into e-commerce. For instance, women-owned businesses on the e-commerce platform are more likely to be microenterprises, whereas most prominent companies, including Jumia’s key accounts, were owned by men.
Women-owned businesses also tended to have lower revenues and fewer employees than male-run businesses.
COVID-19 has primarily reversed the successes of firms owned by women.
Comparing Q2 and Q3 of 2019 to the same period in 2020, as COVID-19 spread, female-run businesses experienced a 7-percentage point drop in sales, while male-owned companies experienced a 7-percentage point rise in sales.
Women are leveraging e-commerce to enter more profitable sectors where they have been historically underrepresented.
Africa fashion business is dominated by women
For example, women entrepreneurs currently dominate the fashion category; however, that segment is characterized by high competition, low differentiation potential, and lower margins, making this category challenging.
However, there is evidence that women also use e-commerce to enter higher-value segments.
The electronics category accounted for the largest share of total sales on Jumia. However, while men typically sold more in the electronics category, the opposite was true where women outpaced men in this product segment.
This trend continued during the pandemic, although women’s average sales in the category decreased more than men’s.
The World Bank found that sector switching is one critical path for women to close earnings gaps, suggesting that high-earning categories on e-commerce can boost performance for women entrepreneurs in the long term.
Women cite greater access to markets and greater flexibility as key benefits of e-commerce. A large number of men and women agreed that selling on Jumia helped them grow their businesses. Thus, market access is a crucial benefit of e-commerce for women, who are more likely to face a smaller customer base online.
In addition to the specific business support services offered by Jumia, women were more likely than men to value the intangible benefits of selling online, mainly as this provides greater flexibility and more time with friends and family.
The exponential growth of e-commerce in Africa presents an opportunity to close gender gaps by opening more markets to women enterprises.
Between 2014 and 2020, the number of online shoppers in the region grew annually by an average of 18 per cent, compared to the global average of 12 per cent.
Similar trends could bring the sector’s value from $20 billion in 2020 to $84 billion by 2030—a milestone that may have already been accelerated by the high demand for online shopping catalyzed by the COVID-19 pandemic.