E-commerce In Cambodia: Highlights Of The Year

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Cambodia is the only ASEAN nation lacking a law regulating e-commerce. Many believed it will be passed in 2017.

E-commerce is set to flourish in the Kingdom, with several local online shopping sites such as Glad Market, Shop168 and MALL855 gaining popularity. Worldbridge International and ACLEDA Bank’s My All in One Mall (MAIO Mall) is another impressive e-commerce initiative. The site showcases goods from over 70 companies, giving customers the ability to choose from a vast catalog of products.

With the end of the year fast approaching, we take a look back at some of 2016’s most exciting initiatives aimed at nurturing e-commerce in the Kingdom, and consider some of the other highlights of the year in the sector.

BritCham’s eBusiness Group

The eBusiness Working Group, an initiative of the British Chamber of Commerce (BritCham), has provided a forum since 2015 for interested stakeholders engaging in and impacted by e-commerce activities. Led by MangoTango’s Chris McCarthy and DigitalRain’s Chris Wray, the group is currently working on a series of tactical projects to promote e-commerce in the Kingdom in cooperation with the government and the Mekong Business Initiative, a program of the Asian Development Bank.

Following concerns among private sector leaders that the market is beset by a lack of information which severely hinders investment, the eBusiness group decided to undertake a study of the e-commerce market in the Kingdom. The focus was to create a final report bringing to light much-needed information relating to market size, barriers and opportunities in Cambodia’s e-commerce industry. The findings of the report will be made public soon, and will be accessible for anyone interested in the market.

Another promising initiative launched by the eBusiness group addresses one of the biggest challenges to the progression of e-commerce in the Kingdom: the delivery. It is well-known that Cambodia’s street and house numbering system is not particularly efficient, often befuddling delivery people who are trying to locate the house of a customer.

This project aims to develop a method that will assign delivery codes to all locations in Cambodia, making it easier to find them and reducing the costs of “last kilometer” delivery of goods purchased online. It is being developed by interested stakeholders and will be made available for anyone to use as an open data resource.

As Chris McCarthy, the founder of media and marketing agency MangoTango Asia, explained during the last meeting of the eBusiness group, which took place in November, the house code delivery project will utilise GPS technology and smartphone apps to assign codes to delivery locations. End-users will be encouraged to add descriptive information to aid the delivery person in finding their location.

“The project’s approach is bottom up,” said McCarthy, explaining that users will assign codes when they are needed, thus saving time and money to create and maintain the system.

The eBusiness Group has partnered up with local marketing, consulting, and events company DigitalRain to research on the state of education and skills in the Cambodian ICT market. Titled Cambodia: Addressing the skills gap in technology and IT, the study looks at available formal and informal education and training, and makes recommendations for how to leverage these to the benefit of the private sector.

The findings of the report are to be officially presented to the public in January during a new meeting of the eBusiness group. However, Digital Rain’s CEO Chris Wray already revealed some of the results at the group’s last assembly. According to Wray, the skills possessed by university graduates “were nowhere near the level required by big and small firms”.

Contrary to popular belief, soft skills, as opposed to technical or “hard” skills, was the area where new graduates underperformed the most. “Leadership, self-management and dealing with stress; in all of these areas subjects rated low,” said Wray during the November meet.

Higher-order thinking skills, which involve processing information and drawing conclusions using critical thinking and problem solving, are not taught or encouraged at institutions of higher education, while teamwork is also overlooked, he added.

The immediate consequence of this dearth of skills is that companies need to train new hirees for up to three years to bring them up to standard, with Wray noting that this was “very costly” for businesses.

The group is also working on a code of conduct for the industry. The goal is to develop a concise guide to parties in the e-commerce world based on the best international standards and practices. “Such codes of conduct have been shown to accelerate trust and shared expectations of conduct among businesses and consumers,” said McCarthy.

Examples of what’s included in the document include return policies and approaches to customer service. These areas are not typically covered by legislation; however, McCarthy says they need to be addressed to create trust in online transactions. Signatories to the code will be able to display a seal indicating that they adhere to the code.

UN’s eTrade for all

It has recently transpired that Cambodia, together with the nation of Bhutan, has been chosen as a pilot country for an ambitious e-commerce program sponsored by the United Nations. Dubbed eTrade for All, the new initiative will make $3 billion available over the next three years to support online businesses.

McCarthy believes the Kingdom was a fine choice for this particular program. “Cambodia is seen as a great test market. We have a robust infrastructure, including four undersea cables, good bandwidth and a reliable electrical grid,” he said.

The initiative will undoubtedly help counter some of the many challenges that plague the development of the sector in Cambodia, such as the lack of a law to regulate the industry.

The much-awaited e-commerce law

Cambodia’s e-commerce law, or lack thereof, has received a lot of media attention. Cambodia is currently the only ASEAN nation that does not possess this kind of legislation, although it is expected soon, with a draft being revised by lawmakers at time of writing.

It remains uncertain as to what would be the reach of the envisioned legislation, however insiders believe the focus will be on providing a framework for internet-based trading and payments systems. Consumer protection and privacy are also critical issues that the new law should address.

“Right now, there are few consumer protections to build trust in online shopping,” said McCarthy. “The law on e-commerce is a step forward, but much remains to be done both to shore up consumer and business confidence in e-commerce, as well as to integrate with the broader Asean Economic Community and receive the benefits of that union.”