How Moving Online Is Giving India’s Women-Owned Businesses Wings To Fly
Small businesses don’t just contribute 30% of India’s GDP but they are also drivers of entrepreneurship, innovation, and employment. In fact, employment within micro, small, medium enterprises has risen from 23.9 million in 2000-01 to nearly 111 million in 2019-20. While the sector has witnessed steady and strong growth over the past few years, it has also become clear that women-led small businesses need stronger support to grow. Of the 63 million small businesses in India, approximately only 20% are owned by women. Furthermore, while 20% of micro businesses are women-owned, this number drops dramatically to approximately 5% for small businesses, and to 2.5% for medium-sized businesses. Small businesses will play a critical role in India’s economic growth over the next decade, and that makes it imperative to find more growth opportunities for women entrepreneurs in India.
Women-owned Businesses Are Resilient
Several studies have shown that women-owned businesses might demonstrate a greater degree of resilience than those owned by men. Facebook worked with Deloitte to conduct studies that found that women business leaders showed a greater degree of flexibility in their business models in response to COVID-19.
This can be corroborated with several real-world examples. Over the last year, we’ve seen many women entrepreneurs adapt and pivot rapidly to fuel growth for their businesses. Founded by Pallavi Utagi, SuperBottoms, a brand providing sustainable diapering solutions for babies, was able to bring its sales back to pre-covid levels within just three months. Based on their growth, in April they were also able to raise funding, a testament to their growth during the pandemic. Even on our platforms, women continue to fuel entrepreneurship despite the setbacks related to COVID-19. For instance, 20% of Instagram Business profiles created since November 2020 have the words ‘female/women owned’.
Unlock New Growth Opportunities For Women-led Businesses
The year 2020 was a watershed moment for digital acceleration in India. There is strong evidence that digital can unleash new growth opportunities for small businesses. The Deloitte study also showed that female business leaders were more likely to make more than 50 per cent of their sales through digital channels.
In 2020, together with the CSC Academy, Facebook up-skilled 2.5 lakh rural entrepreneurs on digital tools related to digital marketing and online safety. As a result of this, the average income of women village-level entrepreneurs increased by ~20% on a quarterly basis.
We see examples of this among urban women-owned businesses as well. Zouk, a direct-to-consumer brand for bags and accessories, founded by Disha Singh has doubled down on its digital efforts during the pandemic, growing nearly 7x. Facebook and Instagram have helped them grow 2x from the pre-Covid levels.
Funding & Skilling - Areas Of Support For Women Entrepreneurs
If there were two key steps that could multiply economic growth for women-owned businesses then those would be access to credit and timely skilling.
As per research by International Finance Corporation (World Bank Group), women-owned businesses are likely to face higher borrowing costs and may be required to provide collateral for a higher share of their loans than their male counterparts. This was despite the fact women-owned businesses showed greater profit margins than those of men. Facebook’s Global State of Small Business Report released in April also showed that during the pandemic businesses led by women have been harder hit than those run by men. All of this underlines the need for timely credit for women-owned businesses.
As women businesses move online, digital skills are another key area of support. Facebook, for instance, is deeply committed to enabling skilling support for small businesses and has taken several of its digital and business skilling programs virtual to provide small businesses with timely skilling during the pandemic. We have worked with hundreds of women-owned businesses in India in just the last year to provide them timely skills and tools to grow and scale their businesses.
Focusing on women-owned and women-led businesses can not just grow their business but can also hold the key to sustainable economic growth. By focusing on them, India can spur economic progress, expand markets, and improve health and education outcomes for everyone.
The author is Archana Vohra, Director, Small and Medium Businesses, Facebook India
