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Cambodia’s e-commerce market eyes $1.78B by 2025
With the growing reach of the Internet, better access to newer technologies, increasing digitization, and rise in income levels, the e-commerce sector in Cambodia is marching ahead on a firm growth path.
“The e-commerce sector has been growing and showed a remarkable growth during and after the Covid-19 pandemic,” Penn Sovicheat, Undersecretary of State and Spokesman at the Ministry of Commerce, told Khmer Times on Tuesday. The growth of the e-commerce sector will continue in the coming years, he added.
Since 2020, the e-commerce sector has registered consistent growth. The market value of e-commerce in Cambodia is estimated to reach $1.11 billion in the year just gone by, $1.28 billion in this year, $1.50 billion in the next year and $1.78 billion in 2025.
The market value increased to $970 million in 2021, up 19 percent from $813 million in 2020, according to the Ministry of Commerce’s iTrade Bulletin.
Increased reach and use of the Internet in recent years have given a big boost the e-commerce. In 2022, according to the Khmer Enterprise estimates, among 17.06 million people, there were 22.06 million mobile phone connections, 13.44 million internet users, and 12.6 million social media users in Cambodia. The previous year, among 16.8 million people, there were 21.18 million mobile phone connections, 13.3 million Internet users, and 12 million social media users.
According to the Commerce Ministry iTrade Bulletin, at $263.30 million fashion accounted for the lion’s share of the e-commerce market revenue. It was closely followed by the electronics segment at $254.4 million. At $230.5 million, sales and purchases of beauty, health, personal and household care products contributed the third largest share. The rest of the revenue came from food, furniture, beverages, and media, among others.
The e-commerce market in Cambodia is expected to expand by a compound annual growth rate of 13.51 percent during 2023-27 which may take the market volume to $2.10 billion in 2027, according to research by statista.com.
By 2027, the number of e-commerce market users in Cambodia is expected to increase to 8.8 million and the user penetration to grow to 48.1 percent from 40.1 percent in 2023, as per the model calculation of the market trend. The average revenue per user could grow to $181.50 by 2027, according to the statista.com assessment.
Between 2022 and 2027, the e-commerce sector in Cambodia is expected to grow at a compound annual growth rate of 14.5 percent, said a market participant.
More money in the hands of people will give a fillip to the country’s trade and business, including the e-commerce sector. The government expects the economy to grow by 6.6 percent and the per capita gross domestic product to reach $1,924 this year, said Prime Minister Hun Sen while presiding over the groundbreaking ceremony for
the construction of a bridge across the Mekong River in the Kratie province on Monday.
The government plans to promote e-commerce like other businesses to facilitate cross-border trade, and increase local business activities of small and medium enterprises, said
the Commerce Ministry spokesman.
To support the sustainable development of e-commerce, the government unveiled an e-commerce strategy in 2020. In 2019, it formulated laws on e-commerce and consumer protection. Similarly, the law on competition was adopted in 2021.
As per the law, the natural persons and the legal persons (companies) conducting businesses in Cambodia by leveraging social networks or other electronic means for the supply/purchase of goods and services are required to apply for registration. While the natural person and the sole proprietorship are required to obtain the e-commerce permit, the legal person and branch of a foreign company are needed to obtain the e-commerce licence.
The registration of e-commerce entities is aimed at a fairer competition, developing the statistical base for the government’s supportive and protective policies, and creating consumer-supplier confidence and protection, said the ministry official.
The government sees e-commerce as a potential sector to help boost the economic recovery in the post-pandemic years, Sovicheat said.
Source: https://www.khmertimeskh.com/501214272/cambodias-e-commerce-market-eyes-1-78b-by-2025/