Digital commerce is ‘goldmine’ for local women entrepreneurs
While the COVID-19 pandemic brought insurmountable challenges in terms of business and the economic outlook, there exist pockets of new opportunities for South African women entrepreneurs in the digital economy.
This is one of the takeaways from the latest Mastercard Index of Women Entrepreneurs, announced on the sidelines of the 2021 Forbes Woman AfricaLeading Women Summit.
The findings come as SA witnesses “explosive growth” in the digital economy and e-commerce sector. Since the start of the COVID-19-induced lockdown, e-commerce has seen a 40% increase in SA, and is expected to continue to rise.
A November 2020 studyfrom Mastercard on consumer spending found 68% of South African consumers are shopping online more since the onset of the COVID-19 pandemic.
The index highlights a number of opportunities for women in the COVID-19 era, particularly in online shopping and digital commerce.
However, it emphasises the need to ensure access to technology or digital solutions, affordable data and modern trade resources, in order to empower more women to succeed in business.
“What the findings make clear is that regardless of an economy’s wealth, level of development, size and geographic location, gender inequalities continue to persist. If anything, 2020 illuminated how vast women’s potential in South Africa really is,” says Mastercard SA country manager Suzanne Morel.
“A crisis will always reveal vulnerabilities in the system, and the pandemic has done that in spades. But unlike any other economic downturn, the pandemic has also paved the way for considerable progress, and we have seen what can be achieved when priority is given.
“Collectively, government, financial services and business organisations need to ensure they are offering the right support programme, solutions and innovation to enable female entrepreneurs the opportunity to thrive in today’s new normal.”
Now in its fourth year, the indexprovides insight into the enablers and constraints of women’s progress as business owners across 58 global economies.
The report notes that while women entrepreneurs are making strides to overcome gender-related biases and advance their businesses in SA, they still face several structural and social obstacles, many of which have been exacerbated by the COVID-19 pandemic.
Some 87% of women business owners globally say they have been adversely affected by the pandemic. In SA, 59% of women-owned businesses work in sectors hardest hit by the economic downturn, like retail, restaurants, food shops and domestic services.
Addressing the virtual Forbes Woman Africa Leading Women Summit, Ann Cairns, executive vice-chairperson at Mastercard, stressed that COVID-19 has shown the gap between men and women on a global basis.
That gap is wider in places like Africa, noted Cairns. “Although women control a huge amount of the world’s wealth – it will be half the world’s wealth in a couple of years – about 65% of them have access to bank accounts. When it comes to Africa, it drops to 37%, so you can foresee the problem.
“If you are not part of the financial system, it is very difficult to influence business and everything that goes on around you.”
In terms of the 2020 index rankings, SA moved up nine places (a 7.1% increase) from 2019, to rank 23rd globally and first in Africa.
The report states that despite a healthy index score, women account for only 19.4% of business owners in SA – a slight 0.2% increase over 2019 − maintaining its 45th global ranking.
This, says the report, indicates their progress in entrepreneurship has been low compared to other neighbouring countries that have been measured. For example, Uganda (39.6%) ranks first in the world with the highest number of women business owners, followed by Botswana (38.5%) and Ghana (36.5%).
“Today, women entrepreneurs play an increasingly vital role – socially, professionally and economically – in driving the South African economy. While the country has made some excellent gains, there is an opportunity for the public and private sectors to work together to accelerate efforts to dismantle the structural obstacles and biases that impede female entrepreneurship, so that women can play an enlarged role in South Africa’s economic recovery,” says Morel.
In terms of women’s advancement, SA moved up four places from 19th in 2019 to rank 15th. This component measures women’s progress and degree of marginalisation as business leaders, professionals, entrepreneurs and labour force participants.
“This was boosted by an improvement in the overall rate of women’s entrepreneurial activity, with 10.2% of working-age women engaged in early-stage entrepreneurial activities (up from 9.6% in 2019), compared to 11.4% for men. This component’s high ranking is underpinned by the relatively large 53% share of professional and technical worker positions held by women in the workplace (ranked 15th among the 58 economies).
South Africa saw its largest improvement in the supporting entrepreneurial conditions component of the index, which benchmarks how supportive entrepreneurial conditions are as enablers or constraints of women business ownership.
“In 2020, SA moved up 13 places to rank 32nd on the index. While SA performs moderately for ease of doing business and for quality of governance, its 2020 score was boosted by a positive change in cultural perceptions of women entrepreneurs (up 35 places from 2019 to rank 22nd globally).”