[Women Entrepreneurship Day] Women entrepreneurs powering the nation to the next level of growth

Last month, FSN E-Commerce Ventures, the parent company of Nykaa, created history when it went public with a Rs 5,352 crore IPO.

Launched in 2012, Nykaa — the online marketplace for beauty, wellness, and personal care products — was oversubscribed 82 times. This was hardly surprising because the startup had become a unicorn, valued at Rs 85 billion by 2020.

Founded by ex-investment banker Falguni Nayar, Nykaa has the distinction of being India’s first woman-led unicorn. The IPO only helped to further spotlight the power and capabilities of women entrepreneurs in India.

India has not lacked women entrepreneurs — Vandana Luthra, Founder of cosmetic label VLCC; Kiran Mazumdar Shaw, Founder of pharma major Biocon; and Priya Paul, the founder behind Park Hotels, are the notable stars on the women’s entrepreneurship landscape.

Moreover, many would have heard of Patricia Narayan, who went from selling cutlets and samosas on Chennai’s Marina Beach to becoming the director of the Sandeepha Chain of restaurants.

India also has Chitra Gurnani Daga, Co-founder of Thrillophilia, an online adventure travel company, and Divya Gokulnath, Co-founder of the much-storied edtech company BYJU'S. Divya’s net worth is estimated at $4.05 billion.

These entrepreneurs present an incontestable argument for supporting women entrepreneurs. With adequate support, women entrepreneurs could fuel India’s economic growth ambitions. The signs that women entrepreneurs are on a roll may not be immediately apparent. However, the COVID-19 pandemic gave them a helpful and happy push.

At the height of the pandemic, 42 percent of women business owners transitioned to an online digital business model, while 34 percent zeroed in on new business opportunities.

The COVID-19 pandemic created the right environment for women entrepreneurs to flourish. They can work comfortably from home, given the expectation to get out of the house is erased and replaced by the work from home culture.

In fact, the massive growth in ecommerce has allowed women entrepreneurs to sidestep the need for investing in expensive brick-and-mortar assets.

With technology becoming commoditised, they can outsource technical talent and make use of technology platforms to rapidly make prototype products and services instead of hiring a chief technical officer to launch an online business.

This is the moment to seize.

Some months ago, the World Bank’s vice president for South Asia made a telling observation, saying that if 50 percent of women in India were in the labour force, the annual pace of economic growth would rise by 1.5 percentage points.

At present, women’s contribution to the country’s GDP is 18 percent, less than half of the global average.

The signal is clear — women entrepreneurs have the talent. They hold the key to giving GDP a significant push. However, not enough is done to unlock their potential. The work that needs to be put in is humongous.

India ranked 70 of 77 countries on the Global Entrepreneurship and Development Institute’s Female Entrepreneurship Index.

For women entrepreneurs to grow in numbers and succeed, there is an urgent need for the ecosystem that supports them to become stronger.

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Some of the areas that need urgent attention are:

Government

Women entrepreneurs can avail of government schemes, including the Udhyam Sakhi Portal for Women Entrepreneurs, the Women Entrepreneurship Platform by Niti Aayog, the Startup India Programme, and Skill India. These need to be publicised and made accessible to women entrepreneurs.

The government should also commit to preferring women-owned enterprises for procurement. At present, the Ministry of Micro, Small and Medium Enterprises’ mandates central departments, ministries, and Central Public Sector Undertakings to target 25 percent procurement from the MSME sector.

However, only 3 percent of MSMEs are women-owned. The problem is there are scores of small women-owned businesses not registered as MSMEs. This anomaly needs to be corrected by encouraging and facilitating the registration of qualified women-owned businesses as MSMEs.

Finance

Finance must be made available more easily to women entrepreneurs, who must be provided with the technical support to find their way through complex banking or other financing options.

Mentorship and training

There is a need to provide mentorship and training to women entrepreneurs through formal programmes, workshops, and courses at the university level.

These programmes should deal with product development, finance, business planning, human resource management, marketing, and other critical aspects that go into creating successful businesses.

Women have an instinct for understanding human needs. They use creativity in problem-solving, are flexible by nature, are hard-working, and are natural collaborators.

These money-can’t-buy qualities are highly prized in entrepreneurs. Combined with the right support system, women entrepreneurs can transform job markets and the economy.