In this article we look at the key findings of the latest 2023 E-commerce sector in Cambodia report. If you want to find out more about market information in Cambodia, view our view to use the market information section on our website, or get in touch with our expert team. Whether it’s the e-commerce sector in Cambodia or anything else, we are the in-market experts.
How fast is the E-commerce sector in Cambodia growing?
The implementation of the E-commerce Law in 2019 has positioned Cambodia to become one of the region’s fastest-growing e-commerce markets. The sector is likely to experience sustainable growth in the future, thanks to strong government support, a growing urban population, high internet and social media penetration, rising consumer spending, and a robust technology start-up ecosystem. These factors have made Cambodia a destination for innovative e-commerce solutions across a variety of sectors.
What are the key trends in the E-commerce sector in Cambodia?
The key trends in the E-commerce sector in Cambodia are listed below:
- Fashion and apparel remain the most purchased items online, as in 2021.
- Most respondents allocate between $11 and $50 per month for online shopping.
- Promotions and discounts are the main reason why people prefer online shopping.
- A lack of trust, especially for consumable and wearable goods, is the main reason why some people prefer cash on delivery over online payments.
- However, the gap between payment preferences has narrowed significantly over the past two years. In 2022, there is almost an even split between online and cash payments.
- Convenience seems to be the biggest factor influencing the growing preference for digital payments.
Other key findings from the E-Commerce sector in Cambodia compared to other regions are below:
Across Asia, a majority of online shoppers still compare prices online, and prefer to touch and feel products before making a purchase.
Mobile device usage is boosting E-commerce (~70% of retail website visits worldwide came from mobile devices).
Majority of E-commerce users are a young population, and they are introducing E-commerce to their parents as well.
E-commerce will continue to be driven by tech-savvy consumers who prefer a quick and seamless shopping experience.
Majority of online websites cater to serve a small number of urban consumers.
Government initiation, strategies, and regulations come in to bring fairness to both consumers and sellers. (source)
What are the main areas of growth in the E-commcerce sector in Cambodia?
The E-commerce sector in Cambodia is set to see cross-sector growth in almost every area of the economy. The scale of growth in these sectors is listed below:
- Banking: Growing number of integrated digital payment systems have led to higher cashless payment adoption. Traditional banks and financial institutions launching mobile banking apps and opening online payment gateways for E-commerce activities.
- Food and Grocery Deliveries: Demand for food and grocery deliveries have not dropped to pre-COVID levels. Restaurants sign up with food delivery apps or offer self-delivery, while consumers are educated on the food and grocery delivery practices.
- Insurance: Lack of education on benefits of Insurance persists, individuals still prefer an in-person experience with agents. Insurance companies are focusing on digitalisation by expanding into bancassurance business, making online payment for insurance available via mobile banking app.
- Online Education: Lack of unique data in Cambodia, and still in a nascent stage with limited local choices for consumers. Online education is experienced by students at all levels during the pandemic. This opens market opportunities. Hence, there is demand but a lack of supply
- Logistics: E-logistics is growing rapidly. There is also a rising demand for quick commerce in Cambodia. Logistics companies partner with online marketplaces and social commerce sellers.
- Ride-hailing/Transportation: Usage declines outside of major cities. Growing trend for companies to expand into Super apps.
- Fashion: Remains the most purchased item online, dominated by sellers across social media platforms. Although the ride-hailing market is growing, most survey respondents prefer using their own transportation.
- Beauty and Cosmetics: Consumer base has shifted with a younger population. Growing online presence is driven by int’l. trends. The E-commerce segment in Fashion and Beauty & Cosmetics take place mainly on social media provided by traditional shops and online sellers.
- Healthcare: Growing demand for all-in-one digital health platforms. Industry is still in a nascent stage. eHealth is still in a very early stage and all-in-one platforms for healthcare are needed
- Media and Entertainment: Lower growth rate today as opposed to pre-pandemic. Willingness to use premium subscription models are still limited. Global companies in the gaming, video and music streaming sector capture a much higher market share compared to local companies.
Who are the most popular players in the E-commerce sector in Cambodia?
Cambodians have their own favourite online platforms to use when it comes to each industry. In the E-commerce sector in Cambodia, these are:
- Food Panda is preferred for food or grocery delivery, while Facebook dominates cosmetics, medicine and fashion areas.
- Prudential is most trusted for insurance.
- Vireak Bunntham dominates logistics
- Passapp dominates ride-hailing/ transportation although almost 70% of respondents do not book transportation online mainly because they have their own transportation
What does the Royal Government think about the E-commerce sector in Cambodia?
According to LCT. TEKRETH Kamrang, Secretary of State, Ministry of Commerce, In the context of 4th Industrial Revolution (IR 4.0), digital technology is a key driving force of industrial competitiveness and business operation, significantly contributing to high productivity, increased export, job creation and economic growth.
For the Ministry of Commerce, the 2022 E-commerce sector in Cambodia Report, produced by PROFITENCE, led to several initiatives to ensure that legal and policy frameworks for e-commerce are established and implemented. The Ministry had led to adopt the Law on E-commerce which was promulgated on 02 November 2019 to serve as an important legal foundation for e-commerce sector development, especially for protecting and building trust among e-commerce users as well as attracting foreign investors in the e-commerce sector in Cambodia.
In addition, the e-commerce sector in Cambodia is also one of the major topics in trade negotiations at regional and global levels. For instance, Cambodia has signed and endorsed the ASEAN Agreement on Electronic commerce which is an integral part of the legal and regulation framework accelerating e-commerce growth in ASEAN. E-commerce is also included in the Regional Comprehensive Economic Partnership (RCEP) and other on-going negotiations. In the parallel vein, the Ministry has joined with other international organisations such as WTO, UNCTAD, UN ESCAP and others to ensure that Cambodia is in line with international legal frameworks and initiatives.
To find out more information about the E-commerce sector in Cambodia, get in contact with the Aquarii team today.