A small market for e-commerce
A small market for e-commerce
E-commerce has been slow to take hold in Cambodia. The Post’s Matthieu de Gaudemar sat down recently with Eelco Dijkhuizen, general manager of market and social research firm TNS Cambodia, to discuss the consumer behaviour that could be slowing its adoption.
Low internet penetration, payment issues and poor logistics networks are often cited as stumbling blocks to e-commerce development in Cambodia. But how much demand is there here for online shopping?
I don’t think that there is this specific need. You don’t have people working three jobs and who are forced to shop online to save the time. Also, people here are not necessarily concerned with brands, but at the same time, a downside of online shopping is that people cannot show off. If you buy something online, people will not see you going into the fancy shop.
The retail market is just developing and going to places like Aeon Mall is not a burden, it’s like a day out. It’s only been a couple of years since we’ve started to see the emergence of some nice retail stores, places like Aeon and Exchange Square. I don’t think that online shopping will replace these types of stores because they are actually new in Cambodia and it’s exciting to go to them.
So what are Cambodian consumers using e-commerce for?
I think the online shopping market is more for products that you cannot get through regular retail outlets. Because the retail market is still small, that is a real opportunity in Cambodia. You often see small entrepreneurs, who for example go to Thailand, buy 100 dresses, come back, and put them online.
Is quality an issue?
In one of our reports we saw that people who shop online are very dissatisfied with what they get, so the quality is not guaranteed.
Is there an effective way to market e-commerce to overcome people’s distrust of it?
Advertising the country of origin is a good way to market something. This affects how much people trust the quality of a product. For example, with Vietnamese products – I’m not sure how much it has to do with the quality of the products or the general dislike of the country – but they are not popular in Cambodia.
Does Facebook remain the biggest medium for e-commerce in Cambodia?
Yes, everybody who is on the internet is on Facebook. In Cambodia, of the 34 per cent of people who are online, 99 per cent of people are on Facebook. The problem with Facebook, however, is that it is very difficult for brands to get people to engage with them on Facebook. I have no real data on this, but what I get from talking to people is that a lot of people in Cambodia use Facebook really naturally, but also superficially, as they ‘like’ almost everything that comes up on their page.
What does e-commerce need to succeed here?
The problem is that very few people have a computer. More people have smartphones, so every platform will have to be mobile. It also needs to be pay on delivery. I don’t think e-commerce will replace the shopping experience, but in the end it definitely will come.
We are at the stage of development in Cambodia in which e-commerce is becoming visible: where we see the middle class, where we see people having a little bit more money to spend. People have more of an urban lifestyle and culture.
In the next five years we will definitely see it start to grow. How big the potential is and how big the market can go is difficult to forecast with the market right now being quite small.
But can it be profitable?
That is always a little bit of the problem with Cambodia, you’re not going to make huge profits, especially in the first year. The market here is small and people will buy small things. If you want to make money here, you need to sell something really cheap and sell it to a lot of people. You have a potential clientele of 5,000 or 10,000 people for most current e-commerce ventures.
