Ministry of Commerce and the private sector partner with PROFITENCE for leading E-commerce study

Harrison White

PROFITENCE has recently released its “E-commerce 2022 Report” at its launch, featuring a keynote from a senior government minister and a panel discussion with industry leaders.

Read the full report here.

The flagship report was launched with direct support from the Ministry of Commerce, and provides an in-depth analysis of the e-commerce sector in Cambodia in 2022, focusing on 10 key industries while offering nationwide coverage. The event was attended by over 70 key stakeholders from both the public and private sectors in Cambodia’s eCommerce industry at Raffles Hotel in Phnom Penh on January 18, 2023.

The 2022 report adds to the firm’s growing body of research

Mr. Subhadeep Chowdhury Founder and Director of PROFITENCE launched the report reflecting that over the last two years, his team’s research has evolved and expanded, covering a wider range of industries and surveying more participants.

Read more: Cambodia e-commerce policies playing catch-up to regulate the growing sector

“We are grateful for the support of the Ministry of Commerce and have identified key pillars that have been crucial for the growth and success of the sector in Cambodia. Our research shows that Cambodia is well positioned to become a key player in the region’s eCommerce landscape, thanks to its adherence to the 2021-2030 digital framework and its ability to learn from the best practices and technology of other countries,” Subhadeep said.

Mr. Subhadeep Chowdhury Founder and Director of PROFITENCE.

“We hope that our 2022 report will build upon our previous work and provide valuable insights for industry stakeholders and contribute to the continued growth of the eCommerce ecosystem in Cambodia. We welcome any feedback on the report through the appropriate channels. Thank you to the Ministry of Commerce, our sponsors, staff, and attendees for your support,” he added.

eCommerce brings new revenue opportunities to Cambodia

Secretary of State at the Ministry of Commerce, H.E. Samheng Bora, expressed gratitude for the opportunities that eCommerce has brought to the country. “We are living in the digital era where technology has taken over our lives,” he said. “The opportunities for eCommerce as a new source of income for countries such as Cambodia are very exciting.”

The Cambodian government has been actively working to support the growth of eCommerce, with key policy implementations such as the eCommerce law and the digitalization integration strategy.

“Cambodia was one of the first countries to take out e-trade ready surveys to understand the opportunities and challenges,” said Bora. Additionally, the government’s flagship e-cam data provides a trusted place to list and sell Cambodian-made products, which aligns with the wider strategy of increasing the use of Cambodian-made products both domestically and abroad.

Secretary of State at the Ministry of Commerce, H.E. Samheng Bora.

Bora also highlighted the role of regional trade agreements in facilitating cross-border trade and payments, as Cambodia has ratified the RCEP and ASEAN agreement. He noted that “the rise of eCommerce adoption could be largely thanks to the young and digital-savvy population, but also the opportunities for reducing the costs of doing business for both the seller and consumers.”

In his closing remarks, Bora thanked PROFITENCE for its now three valuable reports on eCommerce in Cambodia, which provides valuable data and insights for both the public and private sectors to better improve the ecosystem and drive Cambodia’s goal of becoming a high-middle income nation by 2030 and a high-income country by 2050. “PROFITENCE’s annual reports are a vital tool for us as we continue to work towards achieving these goals,” he said.

Cambodia’s eCommerce sector showing significant potential for growth

Delivering the key findings of the report Shane Gladwin Research and Policy Analyst outlined that the: “eCommerce sector in Cambodia is showing significant potential for growth, driven by factors such as high Internet usage, affordable mobile data, and a growing urban population. The Cambodian government has recognized the potential of eCommerce and has implemented various initiatives and regulations to support its growth.”

Read more: Cambodia’s e-commerce platforms need to integrate with digital logistics infrastructure

One of the major initiatives in Cambodia is the Go4eCAM program, which is a partnership between the Ministry of Commerce, Cambodia Post, Khmer Enterprise, UNDP, and the Universal Postal Union. The program aims to provide the necessary conditions for small and medium-sized enterprises (SMEs) to go digital and gain access to finance for eCommerce. This includes increasing digital literacy, helping businesses adapt to the digital business environment, and reducing the costs of cross-border trade.

The launch was attended by over 70 key stakeholders in the industry.

According to the 2022 report, “One of the biggest challenges facing e-commerce in Cambodia is the high costs of cross-border trade, especially for small businesses shipping small packages. Reducing these trade transaction costs by enabling digital automation of trade data, such as the implementation of an Electronic Advanced Data system, will be key to connecting local businesses with foreign markets and value chains,” Shane added.

Regulatory complexities remain a key barrier

A major challenge for the industry is the regulatory complexities associated with eCommerce. Based on a survey, the top reason merchants don’t want to expand into cross-border eCommerce is regulatory complexities. Informal and unregistered businesses on social media platforms lack access to proper channels where they can conduct cross-border eCommerce in a safe, secure and regulated manner.

Shane noted that: “On the positive side, Cambodia has a growing urban population, which is a positive factor for the growth of eCommerce. The urban population has increased from 20% in 2008 to 39.4% in 2019. Additionally, the country has an affordable mobile data market, with $4 per month for 4G, which is 2% of the minimum wage ($194). This has allowed for higher consumer spending and a growing digital startup market.”

H.E. Samheng Bora and Mr. Subhadeep Chowdhury presents certificate.

Overall, the eCommerce sector in Cambodia has significant potential for growth, driven by factors such as high Internet usage, affordable mobile data, a growing urban population, and a supportive regulatory framework. However, the challenges of reducing trade transaction costs, increasing digital literacy, and addressing regulatory complexities still need to be addressed for the sector to reach its full potential.

The report launch hosted a panel discussion featuring:

  • Mr. Sven Callebaut, International Trade Policy and Digital Trade Adviser, Ministry of Commerce | Director, TradeWorthy Ltd.
  • Mr. Laichea Chea, Director, Department of International Cooperation, Ministry of Commerce
  • Mr. Sila Chy, Founder of Sabay
  • Mr. Tabish Masroor, Head of Digital Delivery, Prudential
  • Mr. Bekzod Ruzmetov, Head of Research and Development in Digital & Head of Internet Banking for Business and Data Analytics Divison, ABA Bank

The discussion moderated by Mr. Sven highlighted the government’s efforts to promote the growth of the eCommerce ecosystem in Cambodia, with Mr. Laichea from the Ministry, stating that: “the ministry overall wants to see the ecosystem grow – utilizing partnerships with both the public and private sectors. We will continue to advocate for consumer protection and legal operations of sellers through the various laws we have established and these will be continually reviewed and updated as the technology does too.”

The panel discussion featured a Q&A session from the audience.

He also mentioned the government’s online marketplace for local small and medium-sized enterprises (SMEs) will continue to be developed with partnerships between the private sector.

Digital media also played a significant role in facilitating eCommerce growth in Cambodia, with Mr. Sila, Founder of Sabay, stating that “digital media in Cambodia is fast growing and we have been focusing on how we can combine with other eCommerce sectors to help sell traditional products online as well as complement other ecosystem stakeholders such as the MOC online market place.”

Public and private work together for the growth of eCommerce

Mr. Bekzod, Head of Research and Development in Digital at ABA Bank, highlighted the importance of digital banking in facilitating cross-border eCommerce, saying “banks such as ABA are vital for the ecosystem and ensuring we can properly facilitate cross-border payments which have been focused on international payments are possible through our mobile application. We see our main role as being the facilitator for making it simple and easy.”

Read more: Investment in package tracking key to building consumer trust in Cambodia’s logistics sector

The insurance market has also evolved towards digital insurance products in recent years, with Mr. Tabish, Head of Digital Delivery at Prudential, noting that “the onset of COVID-19 meant that many consumers were essentially forced to conduct their services via online platforms. This coupled with the strong investment Prudential has put into its digital capabilities as well as us offering products appropriate to the local market has resulted in a large uptake of digitally bought consumer products.

Main sponsors and participants thanked during the launch event.

“We have also been partnering with other ecosystem players to make it easier for consumers to purchase our products. Digitalization also makes it easier for us to offer personalized products,” he added.

Overall, the panel emphasized the importance of partnerships between the public and private sectors in driving the growth of eCommerce in Cambodia and the role of digital media, digital banking, and digital insurance in facilitating this growth.

PROFITENCE is a boutique Corporate Finance firm based in Cambodia focused on helping emerging businesses grow in South East Asia. Read more about them at: www.profitence.asia

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