Cambodia Investment Review
Online shopping platforms are increasingly becoming a major lifestyle trend in the Kingdom, presenting unique opportunities for small and medium-sized enterprises.
The rapidly developing e-commerce movement in Cambodia is shaping up to be an exhilarating game-changer. Online shopping has quickly become a significant part of life in the Kingdom, creating an array of opportunities for small to medium-sized businesses.
The swift rise of e-commerce has introduced a new lifestyle for many in Cambodia, altering their shopping habits. Once primarily a trend in the capital, it’s anticipated to spread across the nation.
E-commerce is also dramatically reshaping Cambodia’s business landscape by offering benefits like ease of use, widespread availability, and competitive pricing. This shift is also providing unique prospects for small and medium-sized businesses to increase their sales and contribute to Cambodia’s economic expansion.
Data From PROFITENCE 2022 E-Commerce Cambodia Report
The 2022 PROFITENCE E-Commerce Cambodia Report, backed by the Ministry of Commerce, unveils crucial insights into Cambodia’s bustling e-commerce sector. This all-encompassing report delivers an exhaustive overview of the Kingdom’s digital commerce scene.
Earlier this year, PROFITENCE, a corporate finance firm based in Cambodia, published a series of in-depth articles exploring the specifics of each industry, drawn from data in the report.
According to the report’s survey data, live streamers and influencers emerged as the top sales drivers in the e-commerce delivery domain, with online purchases surging from 6.8% in 2017 to a substantial 21.8% in 2022.
Wing was the preferred payment method for online shopping, utilized by 53% of the respondents, and was also the most popular method for clothing purchases, chosen by 47% of those surveyed.
In 2022, the online food delivery sector was expected to attain a Gross Merchandise Value (GMV) of $22.35 million, with roughly 1 million users and an 8% growth rate.
The beauty and cosmetics segment of Cambodia’s e-commerce market was projected to amass revenues of $67 million in 2022. Additionally, a majority of respondents affirmed that they bought fashion and apparel items through online channels.
When probed about the perks of online shopping, the top benefit cited was the ability to secure promotions and discounts, while a wider range of products and lower prices were also mentioned as significant advantages.
The rise of digital platforms is dramatically altering the way Cambodia’s small and medium-sized enterprises (SMEs) interact with customers. With a virtual presence, these businesses can attract customers far beyond their local neighborhoods.
A significant outcome of this shift is the surge in popularity of online shopping among Cambodians. The ease of buying essentials without leaving home has particularly resonated during the Covid-19 pandemic, when staying indoors became a necessity.
One of the most significant advantages of online shopping is the convenience it offers – from comparing prices and product features, to a diverse range of products often available at better prices than physical stores. The diversity of payment options, including credit cards, debit cards, money transfers, and digital wallets, combined with convenient and cost-effective delivery options, have significantly boosted the appeal of online shopping.
Increasing Digital Adoption & Online Shopping Revolution in Cambodia
Laichea Chea, Director of the Department of International Cooperation at the Ministry of Commerce, shared insights on the matter in an exclusive interview with Cambodia Investment Review. He attributes the spike in online shopping to the digital literacy of the populace and supportive governmental policies.
“The increasing digital adoption by the public, coupled with supportive policies and legislative mechanisms by the government, have played a significant role in the proliferation of online shopping in Cambodia,” Laichea Chea stated. He cited statistics, which underscore the growing number of internet, mobile connections, and social media users in the country.
The government’s role in bolstering e-commerce has been notable, with the Ministry of Commerce undertaking key initiatives to enhance knowledge and capacity. “Through our Go4eCAM project, we aim to enrich the local e-commerce ecosystem and assist local SMEs in leveraging e-commerce and digital trade,” Laichea Chea elaborated. The project has borne fruit in the form of CambodiaTrade, a marketplace platform that enables SMEs to sell and consumers to buy Cambodia-made-products.
To further accelerate the e-commerce development, the Ministry of Commerce has been proactive. “In line with the vision of the Royal Government of Cambodia and to respond to the National Strategic Development Plan 2019-2023, we have crafted a National E-commerce strategy,” Laichea Chea revealed. This approach is buttressed by E-commerce law, Consumer Protection Law, and Competition Law, creating a robust legal framework for e-commerce, thereby fostering trust and attracting foreign investments.
Laichea Chea shed light on the benefits of online shopping for both consumers and businesses. “Our country’s younger demographic is set to benefit the most. They prefer online shopping for its convenience, product range, and competitive pricing,” he explained. The director further elucidated the benefits for Cambodian entrepreneurs and SMEs, underlining that digitization could help scale their operations, boost exports, create jobs, and stimulate economic growth.
As for the future of e-commerce in Cambodia, Laichea Chea predicts substantial growth, citing Statista’s projection of an increase in e-commerce market revenue and user numbers. “A supportive regulatory environment, high internet usage, affordable mobile data, and a growing urban population are key drivers of this growth,” he said.
However, Laichea Chea also acknowledged the existence of certain challenges that could hamper this growth. He pointed to issues like high logistics costs, the need to decrease trade transaction costs, increasing digital literacy, and handling regulatory complexities. “SMEs need to enhance their capacity in labelling and packing,” he concluded, thus acknowledging the promising, yet complex future of the online shopping landscape in Cambodia.
Fintech Giant Wing Spearheads Digital Economy Revolution in Cambodia
Offering an easy and convenient shopping experience, online shopping platforms have become the preferred destination for many consumers. One company that stands out with its comprehensive set of offerings for Digital Commerce is Wing – with e-commerce platforms like Wingmall, Wingmarket, and Wingagri and payment solutions from Wingpay, last mile logistics solutions called Wingexpress they are rapidly gaining recognition among shoppers, businesses and Agri-Businesses alike and is one with the most potential in the Kingdom
While Wingmall offers customers a fast and satisfying experience with its efficient delivery service and a variety of merchants ranging from restaurants, coffee shops, electronics, lifestyle products and gifting solutions, Wingmarket is a unique supply chain solution that the trade seem to be embracing at a fast pace. According to Mr Vantheth Hong, Director of Wingmarket and Wingagri, the transaction volumes on Wingmarket is crossing millions of dollars with corporates, distributors and retailers all jumping onto the platform to buy and sell goods using the platform.
“Wingmarket provides a digital order-taking platform with built-in payment and collection services for Distributors, Wholesalers and Retailers. We also provide loans to the members on the platform based on their purchase history. This helps the retailers and wholesalers to purchase stock from the Corporates which they otherwise wouldn’t have purchased due to lack of liquidity” says Mr Vantheth Hong.
“Corporates and their trade partners love this product since it helps them digitize their supply chain and increase their sales at zero cost” states Mr Hong.
Wingmall is built for consumers and merchants. With more than 6,500 reputable merchants providing a wide range of goods and services, including food and beverage, groceries, electronics, beauty products, and toys, as well as florists and bakeries, Wingmall is a convenient one-stop shop for all consumers’ needs.
Manu Rajan, the CEO of Wing Division, expressed his excitement at the growth of Cambodia’s seamless online shopping platform.
“Since the launch of Wingmall in 2020, we have seen a steady increase in both merchants and customers, while we are particularly pleased to see so many well-known brands joining our platform. Our ability to settle merchant payments instantly using Wingpay has helped to differentiate us from many other players in the market.
We also see an increasing demand for last mile logistics especially from SME merchants and Online Sellers. That’s the reason we launched Wingexpress at affordable rates in 2022.”
“This growth in merchants and buyers reflects the increasing popularity of online shopping, especially in urban areas,” he said.
He also emphasized Wingmall’s capacity for handling bulk orders for a variety of products across numerous markets.
Por Lim, General Manager at Starbucks Cambodia/Laos, also discussed the company’s evolution with Cambodia Investment Review in response to changing consumer behaviors and increased digitalization.
“To extend the Starbucks experience beyond our stores and reach customers anytime, anywhere, we turned to online shopping platforms. We started experimenting with these platforms and digital delivery in 2019. Though it was a gradual growth at first, the Covid-19 pandemic accelerated the adoption of online shopping,” Por Lim explained.
He further noted the significant shift in consumer behavior triggered by the pandemic, asserting that online shopping has become a staple in modern life. “Digital adoption in Cambodia has been reshaped by the post-Covid-19 ‘new normal’.
Most people have started integrating digital elements into their day-to-day routine – be it digital payments, delivery services, online shopping, or virtual communication,” Por Lim observed. “This profound shift is reflected in Starbucks’ sustained growth rates on our online platforms, even post-pandemic, reinforcing that online shopping is a lasting change in consumer behavior, not just a fleeting response to the pandemic.”
Cambodia’s E-commerce Sector Set for an Upward Trajectory
As Cambodia embraces the technological revolution, online shopping platforms are playing an increasingly integral role in the country’s daily life. With a vast range of items, including clothing, electronics, groceries, and household goods available at the click of a button, the convenience and ease of online shopping are hard to ignore.
As the adoption of online shopping accelerates in our digital age, it becomes imperative to remain vigilant against online fraud and scams. Consequently, consumers are urged to patronize trusted online platforms that prioritize customer safety and wellbeing.
Based on predictions in the PROFITENCE 2023 report, the future of e-commerce in Cambodia seems exceptionally bright. The report anticipates continuous private sector growth in alignment with the government’s digital economy roadmap, with consumers becoming more technologically astute.
Manu Rajan, CEO of Wing Division, foresees a substantial uptick in online shopping in Cambodia over the next few years. He envisions significant potential for comprehensive platform players like Wing that offer end-to-end solutions, including payments, banking, cash collection, supply chain payments, logistics, e-commerce marketplaces, and loans to both corporates and small businesses.
Rajan’s predictions are fueled by several factors such as improved internet access, technological progress, and changing consumer behavior, leading to an increase in businesses offering online products and services to satisfy the burgeoning demand.
Despite being a relatively recent development in Cambodia, online shopping holds significant advantages for consumers. With its continued growth, the online shopping sector promises to be a significant catalyst for the Kingdom’s economic development.