The British Chamber of Commerce in Cambodia (BritCham) started last year an eBusiness Working Group to address the topic of e-commerce in the Kingdom. Co-chaired by Christopher McCarthy, Founder of MangoTango Asia, and Tomas Pokorny, WorldBridgE’s CEO, the group provides a forum in which companies can engage on the topic of e-commerce in Cambodia, meet relevant stakeholders, raise awareness on the challenges and opportunities and share best practices.
We sit down with the chamber’s Executive Director, Olivia Widen, to discuss how e-commerce is developing in the Kingdom and learn more about the work of the eBusiness Working Group.
B2B: How developed is the e-commerce industry in Cambodia, particularly when compared to neighboring countries or even western nations?
Widen: The e-commerce industry is fast developing in Cambodia, as it is elsewhere regionally and globally. Levels of development however, vary and are context specific, depending on a number of different factors. As an emerging to developing country, the e-commerce scene is quickly growing in the country and we are witnessing this with the expanding number of e-commerce platforms establishing themselves. At the same time, the pace of development in Cambodia is affected by factors such as infrastructure, the use and penetration of the Internet in the country, consumer purchasing patterns and power, the regulatory framework to support the industry, to name a few examples.
Under the guidance of BritCham and with support from EuroCham, we have established an eBusiness Working Group that provides a forum for interested stakeholders engaging in and/or impacted by e-commerce activities. Part of the work we are doing here is precisely to address the question at hand, acknowledging that in fact, there is little information and a comprehensive understanding of where e-commerce is at its stage of development in Cambodia today. As such, we are looking to develop a baseline study in partnership with the private sector and consultation with the Royal Government of Cambodia. The Mekong Business Initiative of the Asian Development Bank is also helping us move this forward in this regard.
B2B: What are some of the hurdles or impediments to development of e-commerce in Cambodia?
Widen: The eBusiness Working Group organised a series of stakeholder working sessions, with over 100 people from the private sector contributing their views on what the challenges and concerns are for successful e-commerce in Cambodia. The exercise revealed a diverse array of issues, but which lend themselves to three broad areas: technical and operational factors, socio-economic and cultural factors, and legal/regulatory and governmental factors.
Technical and operational factors included for example, the limited availability of payment gateways to facilitate online payments or the lack of locally hosted servers and content due to cost and reliability. Socio-economic and cultural factors included for example, confidence in ability to conduct business or lack of consumer awareness on how to make an online purchase. Legal/regulatory and governmental factors includes, for example, the fast-changing nature of the e-commerce environment that makes it difficult for law-making to keep up, thereby potentially impacting competitiveness or, related to this, concerns about relevant government ministries needing sufficient expertise and knowledge for both law-making and issue / dispute resolution.
Having outlined the above it is important however to make note of two things. Firstly, that these challenges also present potential opportunities for the private sector to step-up and address them, some even providing interesting business opportunities. Following on from this, addressing these challenges and/or opportunities is most effectively done as a collective voice working in partnership with the Royal Government of Cambodia. This reflects the core approach of the eBusiness Working Group.
B2B: What percentage of BritCham members are involved in e-commerce activities?
Widen: The eBusiness Working Group represents both members and non-members of BritCham. Levels of engagement in the activities run by the Working Group vary. We have over 30 members engaging regularly in activities and meetings we convene and over 100 who engage less frequently but who are nevertheless informed and contribute to inputs as and when requested. Members more importantly, represent a cross-sector of industries engaging in or impacted directly or indirectly by e-commerce.
B2B: What immediate and long-term impacts will the much-awaited e-commerce law have in the industry?
Widen: Cambodia’s e-commerce law is currently in draft stage and in a development stage. From a BritCham Luncheon with H.E. Dr. Sok Siphana on the draft law in February 2015 and subsequent progress, we understand the focus of the law will be to provide a framework for Internet-based trading and payments systems.
The impact, whether immediate or in the long-term, can address some of the current barriers to payments systems in e-commerce. These include the limited number of payment gateways, licensing of payment entities, security compliance, the development of internal policies and procedures from the part of providers, to name a few. As such, this can encourage the development of more providers and users within this space, as well as in e-commerce in general.
That said and with the provision that we do not know what the final law will include, it is important to ensure that the regulatory environment in Cambodia can address critical issues that are associated with e-commerce activities. These include issues such as consumer protection and privacy, for example.
In this regard, the eBusiness Working Group is looking to develop an industry “Code of Conduct”, which can act as a guide to parties engaging in e-commerce and will be based on best international standards and practices. Such codes-of-practice have been proven to be effective in many ways, including building trust and shared expectations of conduct among businesses and consumers. This can assist players in the Cambodian market to accelerate adoption of eBusiness and e-commerce. All codes-of-practice would be in alignment with the development of e-commerce laws in Cambodia.