E-Commerce Surges In Cambodia

Un Raksmey and Igor Kossov / Khmer Times No Comments Share:
Shop168 is an online store partnered with brick-and-mortarvendors to deliver their goods to online customers. KT Photo: James Reddick

PHNOM PENH (Khmer Times) – As Internet use spreads across Cambodia, e-commerce outlets are mushrooming.

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Some are online shopping centers like MAIO Mall, which offers a plethora of functions, including lending and booking services. Others, like Shop168, link brick-and-mortar stores with customers via web portal and delivery services. Others, like Mall 855, enable people to sell goods to one another.

“Online commerce is now becoming very popular – many companies are now starting to use online sales,” said Chey Tech, an independent internet analyst.

Growing Internet Access

According to the Telecommunications Regulator of Cambodia, the number of internet users has reached 5 million, or about one third of the population in 2014. In April, Cambodian Minister of Posts and Telecommunication Prak Sokhonn said that he expects penetration to reach 9.5 million people by 2020.

The minister had also said mobile phone operators had sold 20.45 million SIM cards by the end of last year. Mr. Tech said that smartphones are Cambodians’ primary method of accessing the internet. Cambodia has a population of 15.5 million people.

“Even though some companies previously used websites, they now are working on their websites to be compatible with mobile phones,” said Mr. Tech.

Despite the growing number of users, Internet access is spotty in more rural areas, where internet speeds are much slower than in cities. Mr. Tech said that provincial users can expect 2G speeds at best.

International Companies Take Note

Kaymu, a European-based provider which operates online marketplaces in 35 countries, sees great potential in Cambodia, according to country manager Vermersch Valentin.

“First, Cambodia is a dynamic and promising country,” said Mr. Valentin. “Then, e-commerce is the future of Asian and overall global economy. Third, Internet connection, especially 3G, and smartphone penetration are at a high-level here.”

 Mr. Valentin added that when his company opened operations here in September 2014, there was not much competition to speak of.

But, a competitor soon arrived. In April, My All-In-One (MAIO) Mall opened its virtual doors to customers, selling clothes, groceries, accessories, electronic products and more. The service also allows people to pay their bills, make online bookings, borrow money and even pawn items off.

MAIO aims to position itself as a local version of US e-commerce giant Amazon.com or China’s leviathan Alibaba.com.

Local Providers Step Up

Homegrown companies, also eager to take a slice of the e-commerce pie, have been here even longer. Shop168, which launched over two years ago, works with established stores by putting their products into its web portal. The company currently works with 30 stores.

Customers can order goods and pay through the website, using Wing’s mobile service or upon delivery, when Shop168’s own logistics team brings the goods to their door. Cheat Thilong, a marketing officer with Shop168, said that the number of customers grows an average of 10 percent every month

“Our company sees the increasing numbers of internet users as the main important point to operate this e-commerce to let people buy and sell products,” Mr. Thilong said.

Right now the main online market is in Phnom Penh, home to about 15 percent of the nation’s population. But the proportion of provincial customers is increasing. Mr. Thilong said that about 20 percent of their customers are from provinces and that percentage is growing.

One store that works with Shop168 reported better sales since going online.

“I think about 10 percent growth in sales comes from the online market,” said Khin Bona, a supervisor at Integrated Computer Enhancements, a tech company. “Even though it is not a big percentage, it can help our company get more customers.”

Online Auctions

Meanwhile, some Cambodian developers are targeting the customer-to-customer (c2c) market in the hopes of emulating the US online auction provider eBay.

Sun Socheat is the head of one such company, Mall 855, which was the brainchild of a handful of Cambodian IT experts that identified the need for an online marketplace in the country. People use Mall 855 to sell everything from washing machines, to cars, to houses and other property.

“[The c2c market] is not really as mature as in developed countries, but it’s gradually increasing,” said Mr. Socheat. “Our next step is if we can provide a feature for people to pay through our website, then connect to a delivery company. For now, we get income from ads.”

Mall 855 is in talks with a Malaysian company that could provide a high quality payment gateway. It’s also looking for logistics companies to deliver their goods.

For the time being, buyers and sellers are responsible for their own arrangements.
More Startups En Route

Mr. Socheat said he knows of many e-commerce startups in Cambodia that will launch within the next several years.

“In Cambodia, many companies are trying to do similar things,” he said. “But so far we only have one real competitor – [a company called] Khmer 24.”

He said that one of the biggest challenges for such enterprises will involve marketing and branding.

“Tech for us is no big challenge,” he said. “It’s the business context – how to market and promote the brand. So far, the challenge for us is [establishing] trust.”

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