By CIR contributor Tom Starkey
As Cambodia is tipped to undergo an eCommerce boom, sector experts have warned that logistics and reliable parcel delivery – particularly inclusive of tracking functionality – will be key to fostering consumer trust and growth.
However, sector experts are warning that reliability, especially concerning logistics – with package tracking a key component of making delivery options more trustworthy – will be needed in order to facilitate the boom.
Steve Noble, Editor of B2B-Cambodia – which provides information and advice for setting up, opening and managing businesses in the Kingdom – said reliable logistics and delivery partners are still very real obstacles.
“Although the intentions are for the Kingdom to grow its digital economy, everyone I speak to from small SMEs, personal users, and large-scale companies have complaints about the logistics sector.”
“Tracking device can be iffy at the best of times and some 3rd party providers are unreliable, meaning timeframes for deliveries are unclear,” he added.
Noble said that albeit way off for Cambodia, behemoths such as Amazon or Alibaba have been so successful because their logistics infrastructure reassures customers on the whereabouts of their item from the moment of purchase online to delivery, with a suite of custom tools to change things along the way.
“You can sympathise, given the confusing postal address and street system in a city like Phnom Penh as well as the lack of secure post boxes and stories of items allegedly being replaced by some 3rd party providers. [However, these issues] still need to be considered for the eCommerce boom to take off in Cambodia.
Darren Sun, eCommerce director of Ship24.com – a parcel tracking provider which offers universal package tracking API services – said the ability to track orders is essential for reliable logistics.
“In today’s shipping sector, package tracking is expected as standard. If a parcel, particularly an eCommerce order, cannot be tracked, consumers will be wary over making a purchase, especially in less developed economies such as Cambodia,” he said.
He added that not only is tracking important for customers, but it also helps businesses save costs and makes their operations more efficient.
“If Cambodian companies want to capitalize on the upcoming eCommerce boom, they need to invest in and adopt package tracking services in order to increase their sales. The ability to track a package directly correlates with conversion at the point of sale. Whether it is B2B or B2C shipping, tracking is a selling point which fosters trust both at and post-purchase.”
A recent report from the international conference on information systems and data mining (ICISDM) agreed that carriers should invest the required time and resources to implement tracking technology to not only boost sales but also save money long term.
“The timely, undamaged delivery of packages is one of the most important services in order to gain customer satisfaction. Companies should improve and develop their shipping services in order to improve customer satisfaction and repeat business by providing ways and means of providing customers the status of the products, and the anticipated time of arrival to the specified location in good condition.”
“But there are other benefits from tracking packages in the security realm as the companies can track their packages and check that the trucks, ships, and other modes of delivery are following the planned route and the scheduling plan. This will lead to better results on improving the delivery, which ultimately saves costs and resources,” it added.
According to data analyst site Statista, revenue from the eCommerce market in Cambodia is projected to reach $251 million by the end of 2021, with an annual growth rate of 8.94% between 2021-2025.
“In the eCommerce market, the number of users is expected to amount to 7.8m users by 2025 and user penetration is expected to hit 44.1% by 2025,” it said.
In May this year, Cambodia’s Ministry of Commerce and Ministry of Economy and Finance announced Companies and individuals engaging in e-commerce in Cambodia must now apply for relevant permits and licenses, or risk fines for non-compliance.
Foreign investors engaging in e-commerce and other electronic transactions in Cambodia must comply with the new requirements to avoid penalties.
Tom Starkey is a communications and marketing manager, who is now involved in international 3PL logistics and VAT solutions.