The rapid expansion of e-commerce is opening new avenues for entrepreneurship worldwide. Yet in developing countries, especially for women-led small businesses, access to these opportunities is often limited by structural and digital barriers. Different levels of development, gender and age have a significant impact on the productive use of the Internet, including on the likelihood of using it for business. 

Among the obstacles faced by women entrepreneurs in conducting business online are the cost, technical challenges and the administrative requirements associated with using official e-commerce platforms.  As an alternative to it, many women are turning to social media platforms to engage in online trade, a practice known as social commerce. 

Social media platforms are particularly suitable to women’s micro and small businesses, especially in developing countries, as they are user-friendly, low-cost, and generally do not require a bank account, credit card, official identification, or business registration.[i] Women entrepreneurs’ use of social media platforms for business may also reflect their strong community ties and preference for relationship-based approaches to business.[ii] Social media platforms also enable them to create informal networks and forums where they can exchange information, share experiences and serve as role models for others.[iii] The economic gains deriving from online business activities often enhance women’s voice, bargaining power and social standing within their families and communities, thereby contributing to greater self-esteem and social and economic empowerment. 

As of July 2025, 5.41 billion people, 65.7 percent of the world’s total population, used social media, spending on average two hours and 21minutes daily on them.[iv] Users access multiple social media platforms and increasingly use them not only for  entertainment and communication but also for shopping.[v] As a result, social media platforms are evolving to better support both domestic and cross-border trade. Many sellers start their business informally using their personal social media accounts to reach a close circle of family and friends; some transition to business accounts to expand their audience. Some eventually move to formal e-commerce platforms when their digital and financial capacity strengthen.[vi] However, this step may not longer prove necessary, since social media platforms continue to enhance their commercial features and services.[vii]

There is, however, the other side of the coin to consider. Running a business on social media platforms requires developing new skills, for example digital literacy and content creation, and entail facing new challenges. The low barriers to entry can lead to an overcrowded digital market on social media, resulting in intense competition and downward pressure on prices. The trend is compounded by the fact that many sellers tend to offer similar types of products, such as clothing, cosmetics and beauty products.[viii]

Social commerce may also inadvertently encourage informality, since operating on social media does not require business registration. Informality has several negative implications, including limited access to credit, investment and training, and it can trap enterprises at subsistence-level. Moreover, digital entrepreneurs are often expected to be available around the clock to respond to enquiry and process orders, something that may be particularly difficult to combine with women’s household responsibilities. 

Finally, because social media platforms were originally designed to communicate, they may fall short in areas crucial to business transactions, such as transparency, data protection, consumer fairness, and the control of illegal content. 

Although social commerce is one of the fastest-growing segments of digital trade, it remains under-researched and only recently governments have started to explore the opportunities and challenges it presents. For example, the European Union and the United Kingdom have extended certain regulatory obligations applied to e-commerce platforms to social media platforms, particularly in areas such as content moderation, transparency, user safety and market competition.[ix]

To date, only one country, Indonesia, has prohibited commercial transactions via social media platforms, while still permitting their use for marketing and advertising. The policy is intended to shield traditional offline MSMEs from the competition of products sold online often at very low prices and to ensure a level playing field for local traders.[x] For instance, traders in Tanah Abang—the largest textile market in Southeast Asia, located in Jakarta—reported revenue declines of more than 50 percent.[xi] The measure is also designed to foster the development of a formal e-commerce ecosystem. Under the new regulatory framework, however, social media platforms may apply for an e-commerce license from the Ministry of Trade to operate legally.

High levels of digital literacy, a predominantly young population, and extensive mobile penetration have all contributed to the widespread use of social media platforms in Indonesia. As of February 2025, Indonesia counted approximately 143 million active social media users, about half of its population, placing it third in the Asia-Pacific region after China and India, and first in Southeast Asia. Indonesians spend on average three hours and eight minutes per day on social media.[xii]

Such pervasive use may have been viewed by the government as a potential challenge to fair competition and could therefore be among the factors motivating the adoption of the new regulation.

Several important, though potentially conflicting, policy objectives are at stake. Extending certain rules originally designed for e-commerce platforms to social media platforms risks stripping them of the very features that make them attractive to women small-scale entrepreneurs. This could, in turn, deprive women of a channel they have successfully leveraged for both income generation and empowerment, and more broadly slow down the transition of MSMEs into the digital economy. At the same time, these concerns must be weighed against the need to protect women entrepreneurs who operate physical shops or traditional market stalls from unfair practices—such as the online sale of extremely low-cost imported goods that may not meet domestic quality or safety standards.

There is a growing need to better understand and regulate social commerce, starting by collecting data on its impact on economic growth and inclusion, and its interaction with offline trade. The WTO Work Programme on e-commerce, and the WTO Informal Working Groups on Trade and Gender and on MSMEs could serve as valuable forums for discussion. 

Discussions on social commerce could not be meaningfully conducted without also addressing the many challenges that women entrepreneurs, particularly in developing countries, have traditionally faced in offline trade. These include limited access to finance and education, inadequate entrepreneurship skills, time poverty, lack of support from professional networks, and insufficient knowledge of market access and market entry requirements, as well as customs procedures in the context of cross-border trade. 

The new challenges arising from moving the business online also require careful consideration. These include facilitating access to appropriate digital devices, ensuring reliable and affordable Internet connectivity, and providing programmes to develop skills that align with the evolving digital business environment. 

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^{[i] UNCTAD (2023). E-commerce from a gender and development perspective. 2023 United Nations.}

^{[ii]  Cesaroni F.M, P. Demartini, P. Paoloni (2017). Women in business and social media: Implications for female entrepreneurs in emerging countries. African Journal of Business Management, Vol. 11 pp. 316-326, July.}   

^{[iii] Alhakimi W., S. Albashiri (2023). Social media adoption by women entrepreneurial small businesses. Asia Pacific Journal of Innovation and Entrepreneurship, vol. 17(3/4), pages 158-175, September.}

^{[iv] Planable (2025). 121+ social media statistics to know in 2025. September. https://planable.io/blog/social-media-statistics/} 

^{[v] Ibid.}

^{[vi] International Finance Corporation (IFC) (2021). Women and e-commerce in Southeast Asia. Washington, DC.} 

^{[vii] Caribou Digital and J. Donner, eds (2024). The Platform Livelihoods Project. UK: Caribou Digital Publishing, 2024.}

^{[viii] Cherie Blair Foundation for Women (2025). Empowered or Undermined? Women Entrepreneurs & the Digital Economy. cherieblairfoundation.org/wp-content/uploads/2025/03/Empowered-or-Undermined-Women-Entrepreneurs-Digital-Economy. Roest J., Y. Bin-Humam (2021). Business Her Own Way. Creating Livelihoods Through Informal Online Commerce. Focus Note. Washington, D.C.: CGAP.}

^{[ix] Including the EU 2022 Digital Markets Act and the UK 2025 Digital Markets, Competition and Consumer Act.} 

^{[x] Thamrong-ajariyakun P. (2023). Indonesia Bans Social Commerce: Impact and Implications.}

^{International Institute for Trade and Development. October. https://www.itd.or.th/en/itd-data-center/indonesia-bans-social-commerce-impact-and-implications/} 

^{[xi]Asian Business Review (2023). Indonesia restricts social commerce for local traders. https://asianbusinessreview.com/exclusive/indonesia-restricts-social-commerce-local-traders}

^{[xii] Statista (2025). Social media in Indonesia - statistics & facts. March. https://www.statista.com/topics/8306/social-media-in-indonesia/#topicOverview}