The unique version of e-commerce in Cambodia – The Diplomat

E-commerce in Cambodia is nothing new. Online ordering systems and delivery systems for these items have grown steadily over the past decade, along with the rise of social media, especially the rise of Facebook. Following the pandemic, the evolution and adoption of e-commerce in Cambodia has accelerated. But it was precisely the creative systems that spawned Cambodia’s first e-commerce infrastructure that allowed the industry to thrive, even in the chaos of the pandemic.

As the industry continues to grow, we must not forget where the industry came from.

Cambodia’s e-commerce landscape in 2016

Cambodia’s first steps in e-commerce were to overcome obstacles in a creative way. In fact, it could be said that it is these obstacles – the poor quality of the roads, the lack of a functioning postal service, an unpredictable address system, the low number of consumers with access to credit cards and a large population. unbanked – which shaped the e-commerce system from the start.

In 2016, for example, if you wanted to buy something on Facebook, here’s what would have happened behind the scenes:

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A call center worker posts a photo of a newly arrived dress on the Facebook page of her small local clothing store. A few minutes later, she responds to a comment from a potential customer below the photo, starting a price negotiation. After several direct messages and a phone call, she agrees with the customer a price for the item. She prints two receipts detailing the product, price, expected delivery time, and place of delivery. She packs a receipt with the product. She posts the other on a bulletin board for the delivery manager, who then decides who in her team will deliver the package to the customer by motorbike. He then calls the customer to finalize a delivery point and ask him how much change he needs for the exchange. The next day, a member of their delivery team makes a series of calls to find the customer and deliver the product.

This description comes from an ethnographic article on Online Buying, Selling, and Delivery in Phnom Penh written by researchers based at Cornell University and NYU Abu Dhabi. The document highlights how Cambodia’s e-commerce sector has taken shape.

One of the central truths that this article highlights about Cambodia’s e-commerce sector concerns the “context specificity and flexibility of interpretation” of these systems. The researchers describe the online business environment in Cambodia as one of creative infrastructural action with ingenious and imaginative development of local infrastructure.

Simply put, Cambodia’s e-commerce infrastructure was built for and for the local context – using ingredients that were already plentiful, such as motorcycles and volunteer delivery drivers – while bypassing obstacles that presented themselves – such as ” regularly chaotic roads and neighborhoods “. which are difficult to navigate.

Unlike typical e-commerce markets in places like North America and Europe, where systems are often managed solely by human-machine interaction (HCI), e-commerce in Cambodia combines social media with traditional methods of payment and delivery.

And Cambodia’s e-commerce sector has not only been designed to adapt to the local environment. It was also designed to change.

According to the document, the rapid growth of the Internet in Cambodia has given the e-commerce sector a unique improvisational quality. “The online shopping infrastructure could be drastically different in the summer of 2017 compared to the summer of 2016, as trends change and new tools are introduced.”

It is the legacy of these systems, and the way of thinking behind them, that has allowed Cambodia’s e-commerce sector to remain so uniquely adaptable to our rapidly changing world. The unprecedented impact of COVID-19 has further shaped Cambodia’s e-commerce ecosystem.

Digital penetration and e-commerce in Cambodia’s new normal

The government-imposed lockdown, curfew restriction and social distancing have required a dramatic change in the Cambodian way of life. Since people couldn’t move around freely, buying and selling online has become an even more popular way for people to consume goods and services. This new context has given rise to technological developments and a reinvention of infrastructures to eliminate the barrier between consumer and supplier.

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Along with Facebook, Instagram continues to play a very important role in e-commerce. Perhaps directly linked to this use of these platforms, the number of Facebook and Instagram accounts in Cambodia has exploded. Facebook users in Cambodia grew from 7.9 million to 12.4 million between September 2018 and June 2021. At the same time, the number of Instagram users tripled from 692,000 to 1.9 million . Young Cambodians, aged 13-35, are considered the main driver of social media penetration. With this significant increase in the number of social media users, small online sellers and individuals have also shown a sharp increase in their operations across Cambodia.

When the Nham24 food delivery service was launched in 2016, it had 20 delivery people; in 2017, it had 220 partner restaurants. The company has since grown its operations to include more than 350 employees doing deliveries and around 2,000 restaurants in its network as of 2020. In 2018, the E-GetS e-commerce platform was founded by Chinese entrepreneurs to target Chinese expats. Foodpanda, a Singaporean company, and Muuve, a local startup run by young people, were founded in 2019 and 2020 respectively.

During the lockdown, companies like Nham24, E-GetS and Foodpanda played an important role in distributing food and necessities to people who were advised to stay in their homes. Recognizing the importance of these services, the local government in Phnom Penh issued a statement allowing delivery drivers to go through all checkpoints. During the pandemic, delivery drivers had to change roles and became de facto frontline workers.

The pandemic has also prompted more of these services and their users to reduce their use of cash. The National Bank of Cambodia (NBC) has encouraged customers and businesses to use digital payment to reduce direct cash transactions and curb the spread of the virus. The e-commerce industry is also pushing for an increase in digital payments in Cambodia.

In May 2020, NBC reported that over 59% of Cambodians made payment transactions online. Meanwhile, Nham24 and E-GetS reported that the number of electronic payments recently exceeded cash transactions for the first time, with digital payments reaching 55% of all transactions in mid-2021.

All of the creative infrastructure actions described here emerged in response to technological changes, increased internet access, and the pandemic, which have combined to create a whole new ecosystem of e-commerce activity.

According to Margaret Jack, a professor at New York University who co-authored the previous Cambodia Selling and Delivery report in 2016, e-commerce in Cambodia continues to operate very creatively and the recent development of e-commerce. is a big move. She also pointed out that Cambodians have taken over the Facebook platform in a really interesting way. “It goes beyond social media,” Jack said in a telephone interview.

She also pointed out that creative work happens not only in professional technology companies, but also at the level of individual users. Against this background, we can conclude that although Cambodia does not have a large professional technology company to improve the e-commerce sector, Cambodians have creatively transformed the available technology and resources into a platform that can support their business operations, including online selling and buying.

The online shopping infrastructure may look different in summer 2021 compared to summer 2016, but the legacy of those early years remains clear. As Cambodia continues to formalize this sector – including projects that seek to integrate even more small and medium enterprises into digital markets – we must not forget the creative history of the e-commerce industry.

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