Pandemic toll heavier on women entrepreneurs

MANILA, Philippines — The coronavirus pandemic has disproportionately and negatively affected women entrepreneurs in the Philippines, highlighting the need to arm them with the digital know-how and access to financing in able to survive.

A report prepared by the International Finance Corp. (IFC), a sister organization of the World Bank, in partnership with online selling platform Lazada, said that sales of women-owned businesses in the Philippines shrank by 27 percent in 2020 following the hard times caused by the pandemic-induced economic recession.

Two-thirds of sellers in the app’s Philippine marketplace were women, who ventured into online selling last year as they lost their office jobs due to economic difficulties or were forced to find ways to augment shrinking family incomes.

The report said that in 2019, women were outselling men in terms of gross merchandise value (GMV). However, the average GMV of women’s businesses dropped from 106 percent of men’s businesses before the pandemic to 79 percent of men’s during the pandemic.

Digital skills

“The decrease in average women’s GMV relative to men’s in the Philippines was consistent with an increasing body of evidence showing how COVID-19 has negatively impacted women entrepreneurs. Given the relatively high share of women-owned microenterprises active in Lazada Philippines, it is clear that supporting women-owned businesses to regain parity or surpass men’s GMV is crucial for the growth of e-commerce in the Philippines,” the IFC said.

It added that women-led online businesses in the Philippines could better compete and level the playing field if they have the necessary skills required in digital selling as well as access to credit.

However, 61 percent of women in the Philippines still do not own a bank account and were not part of the formal economy, the IFC said. As such, they could not avail themselves, for instance, of loans and grants extended by the government to registered businesses.

“Further expanding financial services to women through agent banking, mobile banking, e-money, and fintech services that extend the reach of the financial system is important in providing women with greater access to the digital economy,” the IFC said.

Personal savings

Most Filipina entrepreneurs relied on their personal savings to start their own businesses, according to the IFC report. But once their pockets were empty, women-owned businesses in the Philippines unfortunately turned to borrow from informal moneylenders such as loan sharks.

The only bright spot in the IFC report was that women entrepreneurs on Lazada in the Philippines have obtained insurance coverage more often than men.

“These higher-than-average findings for women-owned businesses may indicate that the women selling on e-commerce platforms are more financially sophisticated than the market as a whole,” the IFC observed.

It said that equipping Filipino women with digital tools and skills would allow them to capture a sizable chunk of the booming e-commerce sector over the next five to 10 years.

Filipina entrepreneurs may be in a better position than men. “Women with families can manage their stores and care for their children. That’s a big advantage for someone like a young mom who doesn’t quite have the mobility to work out of the home full-time,” the IFC quoted Abigail Chen, founder of start-ups Homie.ph and MyBento.co as saying.

Bullish outlook

IFC projected that Southeast Asia’s e-commerce market could grow by more than $280 billion between 2025 and 2030 by increasing the number of women selling on online platforms and providing them with better training and financial support.

Lazada Philippines chief executive Ray Alimurung said that e-commerce penetration was still quite low in the Philippines and there was more than enough room for healthy competition.

He said it was the growth of the digital economy that would help the platforms operating within the Lazada app to grow, similar to the popular saying ‘a rising tide will lift all boats.”

The IFC said that while the internet economy in the Philippines accounted for only 2.1 percent of gross domestic product (GDP) in 2019, it was projected to grow by 30 percent annually and hit $28 billion by 2025.

However, the sector faces many hurdles. “Sellers in the Philippines operate in a challenging environment for delivery logistics, transporting packages across a vast archipelago of dispersed islands. Further, the majority of e-commerce and internet use is concentrated in urban regions, exacerbating the rural-urban divide,” according to the IFC.