Digital commerce has seen explosive growth in Southeast Asia in recent years, but a report published last month by the World Bank Group’s International Finance Corporation showed that it could still grow by more than $280 billion between 2025 and 2030 if more women were empowered to participate in this burgeoning industry.
The digital economy in Southeast Asia has tripled in the five years since 2015 and reached $105 billion in 2020. Of this figure, $62 billion was generated through eCommerce alone. This exponential growth has been fuelled by several factors, including greater mobile-first internet penetration across the region, the maturation of digital retail platforms and the proliferation of more-engaging online shopping experiences.
Gender Gaps in the Market
Such growth, however, has not been evenly distributed between the genders. According to the IFC report, titled Women and eCommerce in Southeast Asia, women make up half of all active eCommerce entrepreneurs in the region yet still only accounted for $26.35 billion of its eCommerce market last year, compared with the $35.65 billion contributed by their male counterparts.
The report leveraged data provided by Lazada and is the first in the region to focus exclusively on the contributions women make to eCommerce and how online platforms can further drive their success.
The disparity between women and men in eCommerce became even more pronounced as a result of COVID-19. In the Philippines, for example, women-owned businesses generated higher sales figures than their male-owned counterparts in the second and third quarters of 2019 but the number dropped to just 79% of men’s during the pandemic. Meanwhile, in Indonesia, the gross merchandise value rose for men-owned businesses but fell for those operated by women.
While women are active contributors to the region’s eCommerce ecosystem, many still face significant disadvantages compared to their male peers. One big obstacle is discrimination, which may limit their access to certain rights and legal protections in different parts of the region. Women-owned small businesses were also more likely to have unmet financing needs due to barriers to formal loans and external financing from investors. A gap in digital inclusion – the female population in Southeast Asia was calculated to be 11% less likely than men to have access to the internet – means that some women are also still simply unable to participate in the digital economy.
A Fairer, Stronger Economy
Rectifying such gender inequalities would benefit not just women but the entire regional eCommerce market, according to IFC’s findings. Specifically, if the gross merchandise value of women-owned eCommerce businesses reached parity with those operated by men, an additional $280 billion could be gained between 2025 and 2030. It’s a gain that would continue to accumulate in future decades, said Stephanie von Friedeburg, IFC’s senior vice president of operations.
“In other words, for every year that gender gaps go unaddressed, just under $46 billion in market value is lost,” von Friedeburg added.
Research also showed that women make up a higher proportion of digital commerce consumers – a trend accelerated by the pandemic – and having more women sellers could help better cater to their needs.
“There is little doubt that the ability to compete online will increasingly define whether a company succeeds or fails,” said Stephanie von Friedeburg, IFC’s senior vice president of operations. “Ensuring that women are well-placed to compete online will not only strengthen businesses but also drive development.”
Various sectors of society can play a role in helping achieve gender parity in the digital economy, but eCommerce platforms are especially well positioned to invest more in women entrepreneurs. On an operational level, eCommerce companies can support women with sex-disaggregated data as well as more financing offerings and training opportunities to ensure that their businesses can thrive. More should also be done to encourage and incentivize women to leverage paid promotions and to enter high-value segments so that they can increase their contributions to the overall market.
“We have witnessed many women become self-employed as business leaders and sellers on Lazada across Southeast Asia, and we are fortunate to be a part of the journey helping many women who have stepped out of traditional roles to shine on eCommerce,” said Lazada Group Chief Executive Officer Chun Li.
According to IFC’s report, close to a third of Lazada’s businesses in Indonesia and two-thirds of the platform’s businesses in the Philippines are owned by women. The platform has long been committed to championing inclusivity and gender equality in eCommerce and technology. In 2018, it became a founding member of Digital2Equal, an initiative from IFC and the European Commission that aims to create more opportunities for women in emerging markets. This year, it launched its inaugural Lazada Forward Women Awards to recognize and celebrate the accomplishments of female entrepreneurs.
“With the exponential growth opportunities available in the region, we are committed to providing women entrepreneurs with easy access to knowledge and tools to embrace and benefit from the digital economy,” Li said.
The World Bank Group and IFC will host an event on June 16 (8 p.m. SGT) to discuss inclusivity in eCommerce. Click here to watch.
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