Cambodia’s e-commerce sector is experiencing rapid growth, driven by digital payment adoption, rising internet penetration, and shifting consumer behavior. However, despite the boom in online shopping, a new report by PROFITENCE highlights key challenges that could slow the sector’s expansion if not addressed.
The report paints a picture of a thriving yet fragmented market, where logistics inefficiencies, regulatory gaps, and low consumer trust in online transactions remain significant hurdles.
E-Commerce on the Rise in Cambodia
Cambodia’s e-commerce market has expanded significantly in the past few years, strengthened by the rise of digital payments and government-led initiatives to modernize trade. As per the report, in 2024, the E-commerce market in Cambodia is projected to reach approximately USD 1.12 billion.
The country’s youth-driven, tech-savvy population is fueling the shift towards online shopping, particularly in categories like fashion, beauty, and electronics. The median age in Cambodia is 26, which has also led to this spark in e-commerce.
A major contributor to this growth is the rise of digital wallets and QR-based payments, enabled by the Bakong Payment System, Cambodia’s national digital currency framework. These innovations have made online transactions more accessible, reducing dependency on cash and promoting financial inclusion. As per The National Bank of Cambodia, Bakong Payment System processed USD 54.8 billion across 175.3 million transactions in H1 2024.
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Government policies, such as the Cambodia Digital Trade Policy, and strategic partnerships with regional e-commerce giants like Alibaba, are further integrating Cambodia into the global digital economy. The report highlights how foreign investment and cross-border trade opportunities are strengthening the country’s position in the regional e-commerce ecosystem.
Challenges Threatening E-Commerce Growth
Despite the upward trajectory, Cambodia’s e-commerce landscape faces critical roadblocks:
- Weak Logistics Infrastructure: Delivery networks, especially outside Phnom Penh, remain unreliable and costly, impacting last-mile delivery efficiency.
- Low Consumer Trust in Online Transactions: Many Cambodians still prefer cash-on-delivery, fearing fraud or product authenticity issues.
- Regulatory Uncertainty: A lack of clear tax policies and consumer protection laws creates challenges for both domestic and international e-commerce platforms.
- Competition from Regional Giants: Local platforms are struggling to keep up with dominant players from Thailand, Vietnam, and China, who have more robust infrastructure and brand recognition.
Sector-Specific Trends in Cambodia’s Digital Economy
The report also delves into how different sectors are adapting to Cambodia’s growing digital commerce market:
- Banking & Finance: QR-based payments and mobile wallets are surging, helping Cambodia move towards a cashless economy.
- Food & Grocery Delivery: The sector is growing but remains constrained by high delivery fees and a preference for in-person shopping.
- Fashion & Beauty: Social media platforms like Facebook and TikTok are driving e-commerce purchases, with demand rising for eco-friendly and luxury products.
- Healthcare: Telemedicine and digital health services are emerging, but infrastructure limitations hinder accessibility, particularly in rural regions.
What’s Next for Cambodia’s E-Commerce Industry?
To sustain e-commerce growth, businesses and policymakers must take proactive steps:
- Enhancing Logistics Infrastructure: Investments in last-mile delivery and warehouse management are critical to reducing costs and improving efficiency.
- Building Consumer Trust: Stricter consumer protection laws and enhanced security measures for digital transactions will boost confidence in online shopping.
- Streamlining Regulations: Clearer tax policies and incentives for digital businesses can attract more foreign investment and help local platforms scale.
- Expanding Digital Payments: Promoting financial literacy and digital inclusion will ensure more Cambodians embrace cashless transactions.
The Road Ahead
While Cambodia’s e-commerce sector is set for significant expansion, overcoming its challenges will require collaboration between businesses, regulators, and technology providers. Looking ahead, the market is expected to grow at a compound annual growth rate (CAGR) of 9.98% from 2024 to 2029, potentially reaching a volume of USD 1.81 billion by 2029. The PROFITENCE 2024 report emphasizes that with the right strategies, Cambodia could emerge as a key digital commerce hub in the ASEAN region, unlocking new possibilities for economic growth and global trade integration.
