IFC on how to grow women owned businesses on Africa’s e-commerce platforms

The e-commerce sector in Africa holds significant growth potential, with e-commerce platforms experiencing an 18% annual growth rate since 2014, surpassing the global average of 12%. Stephanie von Friedeburg, Senior Vice President of Operations at the International Finance Corporation (IFC), highlighted the immense opportunity e-commerce presents, especially for women entrepreneurs. Research indicates that over 50% of companies in Africa are women-owned, with platforms like Junia reporting that 51% of third-party sellers in Kenya and Nigeria are women. Despite this representation, women-owned businesses in the e-commerce space tend to be smaller in scale, face limited access to finance, and operate with fewer employees compared to male-owned counterparts. Many of these businesses are initiated using women's personal savings, posing a challenge in scaling up. Von Friedeburg emphasized the need to address the gender gap in e-commerce and identified key areas requiring focus. Access to digital tools emerged as a crucial factor, with only 21% of women in Africa utilizing the internet compared to 28% of men. Enhancing internet access and providing tools for business growth is essential. Additionally, increasing financial access for women entrepreneurs, guiding them towards more profitable sectors beyond traditionally chosen fields like fashion, and supporting businesses post-COVID disruption are vital steps in bridging the gender gap. Women entrepreneurs often gravitate towards sectors like fashion, which may be due to personal interests and preferences. Von Friedeburg highlighted the importance of encouraging women to diversify into more lucrative sectors such as electronics, which have demonstrated higher profitability on e-commerce platforms. Failure to address the gender gap in e-commerce poses significant risks and missed opportunities. Von Friedeburg estimated a potential $15 billion increase in the African market between 2025 and 2030 if gender parity is achieved in e-commerce. She emphasized that delaying gender equality in e-commerce platforms leads to an annual revenue loss of $3 billion. To overcome these challenges and seize the opportunities presented, Von Friedeburg outlined four key focus areas. First, encouraging more women-owned businesses to join e-commerce platforms, particularly by expanding existing enterprises. Second, developing fintech tools tailored for women to improve financial access. Third, providing training to equip women with essential business skills, including utilizing paid advertising for business growth. Lastly, increasing the participation of women buyers on e-commerce platforms to stimulate women-owned businesses. Addressing these aspects is crucial for advancing gender equality and unlocking the full potential of women entrepreneurs in Africa's e-commerce landscape.