Opportunities for female entrepreneurs in India amid pandemic
Widespread female participation: A much anticipated scenario for the Indian economy might just have come a bit closer as a result of the Covid-19 pandemic. This is according to analysis by consulting firm Bain & Company in collaboration with Google and AWE Foundation.
The researchers focused on entrepreneurship as a metric of female participation, surveying nearly 350 small or microbusiness owners – “solopreneurs” – across Indian cities. No doubt, any form of employment for the 400 million plus working age women in India could be monumental from an economic perspective. But Bain & Company has always put female entrepreneurship at the heart of equal participation.
The latest report upholds this principle. Currently, India is home to approximately 15 million women-owned enterprises – a thriving sector that makes up only 20% of all businesses in the country. By the researchers’ calculations, growth in this segment could create up to 70 million jobs in India over the next decade alone. The good news is that this growth appears to be on its way, thanks partly to the Covid-19 crisis.
Short term, women-owned enterprises have been thrown into a whirlwind just like the rest of the economy. Businesses were disrupted, jobs were lost, spending came to a grinding halt, and revenues have shrunk. For more than 20% of women entrepreneurs, revenues have all but disappeared.
Beyond this, well over a third report a revenue cut of up to 75%, and an additional set of nearly 20% have lost around a quarter of their revenues. A handful of lucky ones – just under 15% – have actually seen a spike in revenues. According to the report, these were either businesses with a “relevant” product offering (medicines, groceries, etc), or businesses that adapted to consumer needs rapidly.
For the rest, this year has been challenging. Just under half of all women entrepreneurs report that their biggest challenge has been subdued customer demand. Orders have simply stopped flowing in, and many expect this scenario to persist until December at the earliest, with some expecting things to normalise only in March next year.
The work-life challenge
That being said, the demand shock is an issue spreading through the economy as a whole. Interesting here is the second biggest challenge being faced by women entrepreneurs – the increased burden of personal responsibility due to virtual working arrangements. While most around the world would relate to this issue, it invokes elements of the inequitable social set up in India, where women are often solely burdened with running the household.
Working from home has only compounded this scenario, increasing the burden on women entrepreneurs. This has been an obstacle, but not a decisive one. In fact, female entrepreneurs are powering through these challenges, and most are focused on setting up their business for the future.
This is where Bain & Company believes that the pandemic might just accelerate female participation in the long term. As the pandemic hit and put a squeeze on revenues, women entrepreneurs in India appear to have moved quickly and decisively. Bain partner and co-author of the report Megha Chawla presented the numbers.
“Fifty-four percent of the women we interviewed have already changed their business model in response to Covid-19, and another 24% plan to make a change by December,” she said. The biggest change in this regard has been to digitalise a large share of operations and enabling remote management.
What this means is that once the dust has settled from the pandemic, women-owned enterprises will be ready for the ‘new normal’ – an ecommerce driven, low risk consumer environment where the demand for value for money is higher than ever. According to the authors, female entrepreneurs have been reskilling their staff, reinventing their processes and bolstering their tech investments – all in response to the new market conditions.
The upshot of this is a more significant economic contribution from female entrepreneurs. Then there is the broader impetus being given to female participation as a whole. Where women have traditionally been prevented from taking up employment, Bain reports that the strain of the pandemic on household income has pushed many families to encourage women to take on paid jobs. Combined, these factors are set to usher in a more equal economy.
What remains to be done, according to the report, is to create a friendlier social and regulatory environment. “The agility demonstrated by women, altered business and social dynamics, and a dire need for an “all-hands” approach to economic reconstruction, call for a deliberate effort to bring women into the fold of entrepreneurship through targeted interventions,” explained Chawla.
Bain’s report highlights how government intervention, tech investments, mentorship programmes, financial inclusion efforts and a broader cultural awakening should all be on the economic agenda for India in the near future.
