Logo of Phnom Penh Post newspaper Phnom Penh Post - E-commerce slowed by government: report

E-commerce slowed by government: report

Content image - Phnom Penh Post
A woman surfs an e-commerce website on her laptop in a Phnom Penh office. Pha Lina

E-commerce slowed by government: report

The key ingredients for e-commerce adoption are in place in Cambodia but many specific measures need to be addressed by both the private and public sector before the Kingdom can tap into the huge opportunities offered by a digital economy, according to a new report released by a UN agency yesterday.

Since Tuesday, the United Nations Conference on Trade and Development (UNCTAD) is hosting the annual E-commerce Week in Geneva. Minister of Commerce Pan Sorasak and a Cambodian delegation travelled to the summit to present the findings from the Cambodia Rapid eTrade Readiness Assessment report commissioned by UNCTAD.

One of the major areas for improvement according to the report is the regulatory environment, with several important laws still stuck in the drafting process after years of no progress. The much awaited e-commerce law was first drafted in 2008 but was never submitted to the National Assembly for approval.

“Cambodia’s e-commerce currently operates under a law passed in 1996 that mainly deals with postal services,” the report said.

Poor logistics in Cambodia also remain a large barrier for e-commerce, including issues related “to last mile” deliveries, which make it difficult for logistics players to deliver directly to individual homes. Other challenges include an ineffective and antiquated national postal system and a lack of a systemised address system, adding costs and time to delivering e-commerce products, the report said.

“It can take weeks for an item to arrive from abroad and without a computerized system, recipients often must look up their package [at the post office] by country of origin in handwritten notebooks,” it noted. “Finding an address and ‘last mile’ delivery of purchased goods, present significant costs and challenges – especially for smaller merchants.”

Another important aspect of e-commerce is the ability to make financial transactions digitally, eliminating the costs and risks of paying with cash. Cambodia remains a mostly cash-based society, the report notes, though banking services are spreading, with figures from the National Bank of Cambodia’s latest supervisory report showing that by the end of 2016, the number of depositors in the country had increased by 12.9 percent to almost 3 million.

“Banks do not have the resources to assist merchants in gaining access to their payment gateways,” the UNCTAD report added, limiting access to point of sale platforms.

Sven Callebaut, UNCTAD lead consultant for the e-readiness assessment, said the government in Cambodia had fallen behind in terms of leading the adoption of e-commerce. Instead, the effort was lead by the private sector itself.

“In Cambodia, the e-commerce ecosystem has been developing with minimal government intervention,” he said. “The government has been trying to catch up, especially in the Ministry of Posts and Telecommunications and at the Ministry of Commerce, but the private sector has taken the lead in all aspects.”

Callebaut added that fostering greater trust in the country’s financial institutions was now one of the priorities for a digital push.

“The issue of [greater] trust in a large unbanked population is paramount for SMEs to develop innovative platforms, for consumers to use cashless payments solutions and for banks to invest in payment gateways,” he said. “This can be tackled through dedicated programs, which could be developed in partnerships by the government and private sector and with funding from donors.”

Yesterday, UNCTAD released its new e-trade for all platform, providing a single window where policymakers in developing countries can gain a better understanding of how to promote e-commerce as well as connect with UNCTAD partners, that include major firms like Google and eBay.

Steven Path, president of the ICT Federation Cambodia, said that the e-trade initiative would greatly benefit Cambodia by offering access to a wide network of e-commerce stakeholders and donors such as Chinese e-commerce giant Alibaba.

He also reiterated the urgent need for the government to approve the e-commerce law so that major international players can begin to look at Cambodia and help develop the sector.

However, he noted that the e-commerce scene is already seeing significant growth through local players who have created digital platforms for payments despite the existing challenges.

“Many local payment options already exist. Right now, nothing stops you from conducting business online,” he said. “What is really important right now to really increase the adoption of e-commerce is to provide products that customers really need.”

Path added that 2017 could be the year when e-commerce in Cambodia “really takes off”.

MOST VIEWED

  • Rainsy stopped in Paris from boarding Thai flight

    Airline officials at Paris’ Charles de Gaulle airport on Thursday prevented Sam Rainsy from boarding his flight to Bangkok ahead of his announced return to Cambodia on Saturday. Prime Minister Hun Sen had earlier in the day assured Phnom Penh residents that there would be

  • Analyst: Rainsy blocked from boarding flight 'an excuse'

    THAI Airways not allowing Sam Rainsy on its route from Paris to Bangkok on Thursday is being used as an excuse to keep his standing among fellow coup plotters and his uninformed supporters as flights to non-Asean countries are available, an analyst said on Friday.

  • Rainsy lands in Malaysia

    Cambodian opposition figure Sam Rainsy arrived in Kuala Lumpur airport on Saturday afternoon after boarding a flight from Paris, where he has been living for more than four years. Ministry of Foreign Affairs and International Cooperation spokesperson Koy Kuong said on Saturday that Cambodia respected

  • Touch: Rainsy will never return

    Sam Rainsy, the “acting president” of the Supreme Court-dissolved Cambodia National Rescue Party (CNRP), has claimed it has achieved 70 per cent of its struggle to find a solution to the current political situation in the Kingdom. Just before boarding a plane at Charles de Gaulle

  • Sokha continues call for dropping of charge after bail conditions reduced

    Not satisfied with having his bail conditions reduced, allowing him to travel freely in Cambodia, Kem Sokha says he wants his charge totally dropped. “As an innocent man who has been in detention for two years even without being found guilty, I continue to demand

  • MEPs' call for Rainsy's safety not European Parliament position

    The European Parliament said on Friday that a statement by 56 Members of the European Parliament (MEPs) calling for guarantees of Sam Rainsy’s freedom and safety should he return to Cambodia did not represent its position. Delphine Colard, the European Parliament’s press officer told