Intervention Case

MSE System

Catalysing an embryonic market: How Liway contributed to the development of an inclusive e-commerce ecosystem

This case study examines LIWAY’s contribution to the development of an e-commerce ecosystem inclusive of women- and youth-owned micro and small enterprises (MSEs), in a digital economy that by regional standards was embryonic.

Evidence shows that LIWAY invested significantly in understanding the MSE market system to gain a unique perspective on how the system could work better to benefit target MSEs. The analysis led to the identification of the need to improve MSE access to retail space to generate product awareness and sales opportunities, which is vital to the maintenance and growth of MSEs. Both physical and digital solutions were identified, but the lack of an enabling environment for digital solutions in Ethiopia was initially discouraging. However, early momentum and appetite of public and private stakeholders, combined with the future potential for its target group, encouraged LIWAY to take a risk in the embryonic e-commerce sector.

Working in an embryonic sector meant it was essential to identify an implementing partner with, not only the incentive and capacity to expand into a new area, but also the willingness to take a risk, try something new, and above all learn and adapt along the way. The success of this intervention is in large part attributable to the ability to continuously learn and adapt, which included changes to the initial model, trialling ways to mobilise and build trust of both MSEs and consumers to create behaviour change, negotiating regulations, and finding ways to diversify for sustainability.

An evaluation of LIWAY’s contribution demonstrates that in addition to catalysing the change, LIWAY’s dedication and support, particularly in the initial years, was vital, which included identifying solutions to challenges and potential adaptations, mobilising the government into supportive action, and ensuring regular physical presence with the implementing partner. The evaluation also demonstrates that LIWAY’s support was necessary and although others may have entered the space eventually, there is no evidence that other actors were about to do so at the time of LIWAY’s engagement.

Final reflections on lessons learned and considerations for others wanting to develop digitally based interventions in an embryonic sector include testing diverse models, considering mixed incentives, and applying mixed methods to build trust, as well as taking into account different digital access and skill levels and building a bridge towards greater degrees of digital inclusion.