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SMEs embracing digital to pandemic-proof their businesses

Tom Starkey / Khmer Times Share:
Home deliveries in high demand during the virus outbreak. KT/Pann Rachana

As the economy reels from the pandemic necessitating on-and-off closures, businesses large and small and individuals have turned to digital strategies to “pandemic-proof” their revenue streams. From the booming online fashion and beauty sector to growth in new on-line opportunities, ecommerce is spurring the Kingdom’s digital adaption. Khmer Times’ Tom Starkey reports.


With a wry smile, dried seafood seller Sin Nalin says that if anything, COVID-19
has benefited her business.

“Unlike sellers operating from market stalls, I conduct my business completely through Facebook. During the pandemic, my page visits and sales have increased. Now I have to go “live” at least twice a day just to meet the demand,” she said.

Indeed, ecommerce – the buying and selling of products or services online – was already on an upswing before the pandemic restricted access to traditional brick and mortar shops.

According to analytics company Statista, ecommerce revenue in Cambodia is expected to reach $183 million by year-end, with the number of online shoppers increasing to 4.8 million, nearly a quarter of the population.

The company sees growth continuing upwards, with revenue predicted to grow at 11.4 percent annually, to a projected market volume of $313 million.

And this growth translates to opportunity.

Entrepreneur Phan Nita said she has a market stall in Toul Tom Pong and a Facebook page, but has seen a shift in customer purchasing patterns since the pandemic.

“When I first opened my market stall, most sales came from market-goers. Not many clicked “like” on my Facebook page. However, Facebook sales have grown as market sales fell, to the point that I had to hire a full-time driver for deliveries in March,” she said.

“Now more than 70 percent of my sales are online. I may give up my stall so I can operate from a storage space that allows me to keep more styles and sizes in stock. That will give me the ability to hold inventories that meet the demand for different sizes and styles, from a growing number of different [demographic types of customers],” she said.

Indeed, a recent report by international consultants Forrester, projected the global online fashion market reaching $765 billion by the year 2022, an increase of $281 billion, or 58 percent from this year.

“One of the leading trends in ecommerce is the direct integration of shopping functionality into content display on social media, enabling high-speed, “inspire and sell” customer conversion. The audience is shifting from desktop to mobile, which makes improving the mobile browsing and checkout experience crucial,” it said.

With internet users in Cambodia growing by 1.3 million between 2019 and 2020, up 15 percent, and the number of mobile connections increasing by 765 thousand, according to a report by global data analysis company DataReportal, the trend towards more customers arriving at the ecommerce doorstep continues.

Another key driver in ecommerce is the food delivery sector.

Phnom Penh based company NomNom is one example. It has pioneered “meal plan services” in the capital, where customers select, order, and take delivery of an entire week of food from a customisable menu that changes every week.

Co-founder Marnix Gerits noted that the opening of NomNom 18 months ago, followed he and his partner having seen the meal-plan format trending in other countries, a trend that has yet to come to Phnom Penh. The founding of NomNom was the result of their seeing a market opportunity.

“During the pandemic, we have definitely seen growth. But also, we have noticed people wanting to eat healthier, which we cater to,” he said.

“It’s convenient for them and for us. We don’t have the overheads of a restaurant, yet we have the same, and in many cases, an even larger turnover. It’s all about scalability, as the market grows, we can grow with it,” he said.

Economic researcher Ngeth Chou said that the growth in food delivery services helps increase job opportunities for Cambodians, both now and in the future.

He said compared with small restaurants operating with a small number of staff, increasing connectivity opens restaurants out to a wider audience, creating new jobs based on the need to take, make and deliver orders to a larger clientele.

Leading food delivery company Foodpanda said the pandemic not only increased orders, but also delivered a broader range of customers accessing their platform.

In a recent interview with Forbes, Foodpanda CEO Jakob Angel said “Because of COVID-19, we saw a spike in demand simply because consumers had the need to stay safe by staying home.”

“We saw that consumer demographics, which traditionally were a little bit harder for us to reach – the older populations, the less tech savvy and so on – all of a sudden started using our service,” he said.

Indeed, although online food delivery – dubbed “Foodtech” – has largely taken off, there remain numerous evolutions yet to occur: in supply chain management, food safety, order management, delivery processes and even the cooking itself.

The growth in online business has also resulted in an increasing demand for search engine optimisation (SEO) and search engine marketing (SEM), as companies compete to be number one in search results.

Freelance content writer Heng Rotha, 24, is one Cambodian who is capitalising on the demand.

“Before the pandemic, I worked in my family’s wedding business while studying, but with lots of weddings being cancelled earlier this year, the business closed,” she said. “That’s when my friend told me about SEO and SEM work. I get paid per article. I started doing around three per day but demand grew as the pandemic continued. I now write around five per day. For anyone that can write English, it’s a career they can dip in and out of, while waiting for the economy to pick up.”

By the end of this year, Statista estimates fashion will dominate the Cambodian ecommerce sector, generating some $63.8 million, followed by electronics and media at $56.6 million. Food and personal care would generate some $25.2 million with homeware and appliances alongside toys, hobbies and do-it-yourself making $18.9 million and $18.2 million respectively, said Statista.

As Cambodia looks on to the Fourth Industrial Revolution, which will further fuse the physical, digital and biological worlds, Cambodian businesses and the public embracing tech is a promising development. And a young, increasingly tech-savvy population with rising internet use and smartphone ownership provides the perfect customer and talent base.

 

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