After a decade in Cambodia internet is a booming industry in Cambodia. The number of internet user has increased from a few hundred users 10 years ago, to tens of thousand users today. At the same time the price of internet connection has also dropped, from US$8 per hours, to US$ 0.50 per hour. This industry is booming, but, there are not much economic activities going on in Cambodia’s internet world. There are not many e-commerce shops specifically targeted Cambodian customers, and the Cambodians do not have suitable products or services suitable for transactions over the internet. Following is my analysis on the reasons behind this lack of transactions over the internet.
Banking: The ability to collect payment through internet is not yet efficiently possible in Cambodia. It is possible to collect payment from the internet, but we need to use third party credit card processor with high transaction cost. There are many banks in Cambodia, so what’s the problem with it? Banking in Cambodia mostly provides services such as saving account, and local business transaction, but when come to the services for e-commerce none of them provide such service. Another reason is the number of credit card users. Although there is no statistic data on how many credit card users in Cambodia, I can assume that the number of user is very low, as every time I spend using my credit I am look like an alien.
- Trusts: E-commerce require so much trust, so much that you’re willing to let some one charge your credit card before shipping the goods to you. I don’t think this kind of trust is possible in Cambodia. I remember some time my friend who own a credit card, told me that he do not trust to enter his card information on the internet.
- English: No matter how easy you can integrate Khmer language in to a website; e-commerce still requires understanding of English. Almost all of students in Phnom Penh learn English, but to talk about e-commerce with the current level of English knowledge, I definitely say Not Yet!
- Shipping Cost: Shipping and transportation cost is one of the highest barriers for e-commerce in Cambodia. Reliability and cost is a major draw back here. The cheapest reliable method I can find to send a document from Cambodia to United State cost me US$35. That is almost impossible for e-commerce transaction to occur profitably.
- Creativities: Do you agree with me that, we Cambodian lack of creativities in term of entrepreneur and business? For me, I believe so, the moment you come up with some things new, everyone started to copy your ideas. So, why not sit wait to copy other’s ideas don’t waste your time creating new ideas.
- High Internet Cost: Cambodia is now waiting for the next big thing about internet; it is having internet access at home. E-commerce requires using more time on the internet. For example if you plan to sell CDs on the internet, it is not easy to scan, write the description, save it in a USB drive, ride a moto to the internet café to up load all the information. So affordable internet connection at home is a must for e-commerce operations.
- Regulations: We’re not talking about e-commerce business, to start a business alone we require the license from Ministry of Commerce, tax id and patent from Ministry of Economic and Finance, and other license from specialized Ministry or authorities. Can you imagine how many step further you have to go, to have an e-commerce shop start up legally? Yeah in Cambodia individual cannot register a .com.kh domain. To register a .com.kh domain we need to have a certified copy of business license or a certified copy of patent.
Although there are so many obstacles for e-commerce to grow in Cambodia, there is always a possibility for young entrepreneur to generate revenues from the internet. I keep until the next post to list some of the e-commerce activities that are possible in Cambodia. So check back often for updates 
Related posts:
- Mobile Operators Race toward 3G in Cambodia
- WAITING FOR AFFORDABLE INTERNET CONNECTION IN CAMBODIA
- CONFIDENCE IN BANKING SYSTEM BOOST
Tags: banking, Cambodia, credicard, ecommerce, online business
August 28th, 2007 at 3:32 pm
[...] looks at the factors that might discourage Internet entrepreneurs from starting E-Commerce ventures in Cambodia Share [...]
October 8th, 2007 at 7:40 am
thank you borin for post this information. However, however do you have the reference of this information? Can you send me the reference?
Thank again.
October 9th, 2007 at 2:08 am
Sophea,
I have all include all the references that i qote from other sources, If i didn’t quote it mean that the information is based on my self.
Please tell me if you need any specific information to be clarified.
October 24th, 2007 at 2:14 am
Very interesting article!
However when you say ‘Cambodian lack of creativities in term of entrepreneur and business’. I disagree with your idea. In fact, I think lots and lots of young people are strive with enthusiasm in doing business, but they lack the opportunity.
I’ll keep looking back at your next post of successful e-commerce in Cambodia. It would be a tremendous help for me, as i’m willing to build a small e-commerce too.
Thanks or your article.
October 24th, 2007 at 2:32 am
Agree with you that some of us have the entrepreneur spirit and creativities. But, there are little number with that kind of thinking. If we look at the business landscape of Phnom Penh, we can see all people are doing the same business: Suki soup for example they sell the same thing every restaurant..
Talking opportunity: entrepreneur search for opportunities, opportunities don’t come to them. But i truly agree with you that opportunity in Cambodia do not present it self in front of true entrepreneur… but the opportunity always present its self in front of unethical business person.
Hey about the e-commerce.. you can share your ideas with me because i also have some failure experiences in that…
October 25th, 2007 at 5:16 am
I’m definitely appreciate your ideas.
What I want to say, actually, is to encourage more entrepreneurship activity for those who already pursue this ability and those who are on their way. However, your article seem to discourage those people. so sorry to say that na.
For my ecommerce site .. it’s in the progress..
I’m going just try to experience it, i’m using paypal as my merchant account .. don’t know yet whether work or not .. but definitely i’m going to try my best.. !!
October 25th, 2007 at 6:05 am
I am glad to hear true feed back. Anyway the purpose of this article is not to discourage entrepreneur, but i want to put some factor into consideration for entrepreneur. If you find information help you’ll use it, but if you find that it is discouraging feed back because i hope to improve the next time i publish new article.
About paypal I don’t think it’ll work in Cambodia, I have on pay pal account too but i have to use Thailand physical address. Another problem is I cannot withdraw money from my pay pal account, but i can add more money.
May i suggest you using 2checkout, but of course it is not free, but i work with every bank account in Cambodia.
Since you’re determine that you’ll put your money and effort in to e-commerce. I may wanna share some experiences:
– First the traffic: it is not easy to get traffic, I tried using google adword it work but the expenses on ads is far exceed income.
– Second: Do not trust any traffic source other than good reputation company such as Google or yahoo. Other ads serve i tried do not convert visitor into buyer.
-I though i’d spend a few hundred dollar to get my website up and running, the the real cost of doing this business is how to generate traffic. My previous business end up: haveing 47 dollar income on every 200dollar of expense.
– My another mistake, is to keep the profit margin too low. for example my direct cost is $5 per unit, I charge my customer only $7 per unit (every one charge $20). I didn’t realize the my real cost was to get traffic to my site.
– The cost of getting genuine visitor to my website cost my around: $0.03 – $0.1. The conversion rate is you can get 1 buyer ever 100 visitor (I mean genuin visitor here). So the cost of selling is: 100*00.6= $6. i assume that 0.6 is the average cost of very one genuine visitors. So US$6 + direct cost + Profit = selling price. ( I am sure the number is not efficient but i’ve done it). In this part I assume that the product is one time sell only (not recurring every month).
* please note the conversion rate vary depend on nature of product & other factors.
I hope that the information about helpful in your decision on pricing your products. I don’t mean to discourage you. If you don’t try you’ll never know right?
Here’s another inspiration phrase for you: It is better to try and fail, than not even try at all.
Please let me know if you need other information.
October 25th, 2007 at 7:05 am
A million thanks to you borin.
It’s absolutely very useful to me.
Just one more question..
Can you transfer your money by telling you 2checkout merchant account that you’re doing business in Cambodia? I mean will creditor company accept online businesses transaction online from Cambodia?
It would be a tremendous help if you could points me to some other websites!
For paypal.. i think it’s good for beginner who just want to try and take experience (:) good news.. Paypal just add Cambodia to their lists) .. it save you lots of $ and charge per transaction is very low.. compare to 2checkout and others.
Once again thanks for your great help.. it does absolutely help me and others who interested in this new challenges business.
October 25th, 2007 at 11:37 am
Kagna,
I just get the news that paypal added cambodian to its list. The problem is it ok to withdraw money from paypal in Cambodia? HMMm…
For 2checkout.com or 2co.com the I am not sure about the transaction commision rate but i think it’s 5% of the sales value plus around 50cent for each transaction……..
2co work perfectly with cambodia bank account. fill in your bank acount number in your account then 2co will wire transfer the money to you when your balance reach 800$ (or any value you set). the cost of wire transfer is on you.
Another option is to have them mail your the pay check. but it take longer.. and the cost of clearing that check is also on you.
October 26th, 2007 at 3:15 am
April 23rd, 2008 at 5:59 pm
hello
nice to see your all your text.
you guys have talked about e-commerce. Then, do ever heard about M-commerce (Mobile commerce)? if yes, any ideas about it?
May 4th, 2008 at 10:41 pm
HUh, there’s not much different between them. overal you still need internet technology to conduct transaction.
For Cambodia it not easy to implement such commerce, not many cambodia use the banking system or trust.
May 16th, 2008 at 1:12 pm
Dear Borin,
Thanks for this useful article. I am interested in E-commerce in Cambodia. I had searched on the internet for some information. I found your blog which contain this article.
For what you have posted, do you have any references?
Please give the references as possible.
Regards,
Sovathena
May 16th, 2008 at 3:33 pm
Hi Sovathena,
If i quouted some one else’s work I definitely put the reference here. But if i did not it mean these words are mine. You can agree or disagree with me.
I welcome any opinion.
Thanks
May 22nd, 2008 at 9:01 am
Thank Borin.
Well, what you said and posted here is reasonable.
I agree with you.
I would like to praise you and appreciate to what you have post, especially your website that you created is really a good one for giving information to the world.
*Please continue to distribute your idea, also any information that you know to the world.
Best regards,
Vathena
September 7th, 2008 at 5:35 am
hello there,
read through the main article and i must say that Borin did a lot of research and there is need for improvement in the IT field in Cambodia to make it more interesting competitive and attractive.
Asides 2co there a lot of offshore 3rd party merchant accounts and credit card processors in the us that would accept Cambodian bank accounts for settlements.
the only snag is the settlement date and time interval which might be extended to make sure that the business is legitimate and that the card holders dont cry fowl
thanks
January 6th, 2009 at 10:10 pm
I don’t use paypal but I still can pay and receive payments online! I am in Cambodia too. 18 year old boy at Toul Tom Pong High School! Contact me for details!
January 12th, 2009 at 7:45 pm
Hi Borin, It’s really useful info. Thank.
As you have lots of experience with e-commerce, do you know which Bank is a good one for e-commerce?
Nowadays, There are many banks in Cambodia and it’s such a pain that they only provide local service. Why don’t we just have few banks that serve for both local and international service… hmmm…
I’ve just checked ANZ Royal Bank on its website. It’s like it’s a branch of an Australia Bank which I’m not sure it’s a best one in Cambodia? What do you think about it?
Dear Sela, I really want to contact you regarding the way you pay and receive payments online, but I don’t know your email address. So if you by change come to this blog again. Could tell us more detail about that? like which bank?
which service? and how it work?
Dear all, does anyone ever have experience with PayPal, AsianPay, MoneyBookers, E-Gold, 2checkout, or other services? Which one is good for Cambodian?
Thanks.
March 2nd, 2009 at 1:45 pm
Dear Borin and all,
It’s very interesting to read your article and comments from all of you in this blog. It’s very helpful for someone who are interested to work on e-commerce.
I have some questions related to PayPal online payment. I just tried out to create account with PayPal, and tried to transfer some money to other payment accounts of my friends in Cambodia. But PayPal said that “Currently PayPal accounts in Cambodia are only able to send payments. This recipient is not eligible to receive funds.” Does it mean that we can not receive money from outside using PayPal account? Anyone can help to share this?
Have anyone tried to work e-commerce now? Which bank in Cambodia we can provide this service if we want to receive payment from online?
Thank you for your ideas and sharing in this blog. We are looking forward to hearing from you.
Best Regards,
Khmer Angkor
March 2nd, 2009 at 6:35 pm
Khmer Angkor,
You’re right, currently paypal doesn’t allow us to accept money. Some services such as 2checkout charge high fees, but i never have chance to try it, because i never really sale any thing on the net.
I guess we have to wait, although it is possible to accept fund, but considering the cost, it doesn’t make sense.
March 4th, 2009 at 9:02 am
Dear Borin,
Thanks for your quick response. One of my friend in Cambodia really wants to have your Hotel can be booked online and able to accept credit. Do you have any idea how should he do?
Thank you for help.
Khmer Angkor
March 4th, 2009 at 8:28 pm
You should have the hotel’s marketing to contact Precisionreservation, and other website.
You can first research a list of competitor hotel that have online booking, and what is the website. To have your hotel listed you should contact the website, they are in this business for long time they should have a good system of doing this.
It’s simple, research, and contact the website… there are hotel in Cambodia that can do it, so it is possible.
March 4th, 2009 at 8:29 pm
Some online reservation service have their affiliate system accross the www. So by listing with one major reservation system, you can have your hotel listed in many website.
March 4th, 2009 at 9:13 pm
Thank you for your explanation. But could you suggest one or two booking engines which Cambodian hotels can work with. I’m not sure that good enough in e-commerce or booking system, but I think those systems need to keep update my our room availability in hotel too in order to confirm the customers for their booking. Do you think the system which hotel in Cambodia is using now need to link up and update to booking engine at all time? I’m not sure that my question is ok to you, I think it’s very helpful not only for my friends but for all who want to have online booking system on their hotel and websites.
Thank you for time explanation in the blog.
March 5th, 2009 at 4:48 am
This get abit too specific for me, as I am not in that kind of business. But, my suggestion is that you work with the biggest hotel reservation system precisionreservation (google it). I guess as they are in business they have a best practice of doing it or at least they know how to deal with many hotel around the world. Try to work with the best in the business they know what to do. by simply having your own website with payment processing to accept booking it’s not enough because you need to advetise it (cost more).
April 3rd, 2009 at 4:34 pm
Hi all,
Could you tell me how to add ANZ visa card to paypal account?
I can’t create one cos paypal can not verify my credit card?
August 22nd, 2009 at 6:06 pm
Hi Borin
i am in Siam Reap Cambodi and monday i will go to Maybank and try to open merchant account max they will throw me from the steps,we have merchant accounts in Israel and Singapor.allready,
can u send me (withthere permision e comerce singaporian e mail contacts?i will need someone local here that understen/want to do e comerce and they can be emploiud by us
thanks
babo natale,
August 22nd, 2009 at 6:08 pm
sorry not singaporian .CAMBODIAN E COMERCE E MAILS..
August 24th, 2009 at 12:07 pm
HI, borin
Thank you for good acticle, I am looking to run ecommerce in Cambodia too. but the problem is payment gateway can’t work in Cambodia. I am also looking who has experience with products sale online. Please contact me if you interesting to join with me, write me a message to meas_samol@hotmail.com
Thank you
Sam Ol
August 24th, 2009 at 12:23 pm
payment gateway is not easy for Cambodia but not impossible. What is the shopping cart you’re planning to use? What kind of product is it tangible that reqiures shipping or download product or service.
September 8th, 2009 at 5:10 pm
I want to know how many banks in cambodia>?
So please help me
and If want to open Bank in cambodia how to deposit for government?
and how about policy of cambodia government.
please send the answer to my mail. heng140881@yahoo.com
September 8th, 2009 at 9:21 pm
Would be nice if one you guys develop a prepaid system, similiar to calling cards where u can buy online money suitable for online purchases.
It’s not easy but the rewards should be nice.
Also I don’t trust shipping in Cambodia , if someone can guarentee Packages, I would like to import Cambodian products to the united states, I’m tired of every Cambodian stores selling Vietnam and thailand products here.
September 9th, 2009 at 8:13 am
Sokhen, I hate to say it, but I think in Cambodia we’re using Vietnamese product too. Generally Cambodian do not produce any thing. Some product that produced here can’t even supply the demand in Cambodia.
What kind of product are you looking for? A guarantee delivered is possible, but it depend on nature of the product. Whether is is shippable by Post, or it must be in a container.
September 9th, 2009 at 10:59 am
I’m not even sure, honestly I’ve been shopping in Cambodia and i know where a lot of our products come from. But I really want to help my fellow Khmer to have jobs and more opportunity. I don’t have the capital to do anything major, but I want to plan something in the future.
Some ideas include.. rice, (angkor beer was a great idea but the beer wasnt properly marketed here) , Kampot peppers, I kind of want both worlds.
I used to work for a company that employs callers and web designers from the Philippines, The callers would call a list of numbers that I would source and try to sell our product which was at the time computer repair and web design, They would get paid for every successful call converted into actually service. Like 5-10 dollars for every person they can make use our service. If someone needed web design the program and designers in the Philippines are reasonably prices compared to over here in america.
So I don’t know why Cambodia can’t compete with that, I’m sure there are plenty of bright people in Cambodia. The cost of living is less in Cambodia, so I think it can work out somehow.
September 9th, 2009 at 1:59 pm
If india can do it we can 2.
http://money.cnn.com/2009/07/08/smallbusiness/internet_for_india.fsb/index.htm
February 27th, 2010 at 6:09 am
To all i love this whole conversation concerning the trial and error theory. i have built several sucessful business that succeeded by failure through school of hard knocks. now at my age i am coming to cambodia to teach it to the well desired students that are willing to move foward. keep up the good conversation everyone will benifit as a whole .
Teacher Frank
April 30th, 2010 at 11:23 am
I was trying to get an feed for the RSS for the website & for some odd reason it isn’t properly showing up in Google Chrome. Does anyone have any suggestions?
May 18th, 2010 at 12:22 am
Dear Borin and fans,
I just dropped by borin.ws by chance I found lots of interesting conversations here. I really appreciate all contributing esp. borin. By the way, any of you can tell me if nowaday we can transfer money from our paypal merchant account (assuming i have one) to Cambodia local banks such as ANZ royal? And online payment using credit/debit cards by local banks now work with paypal?
Nimeth
May 21st, 2010 at 10:27 pm
http://cambodiaretail.com is an e-commerce site in Cambodia.
May 30th, 2010 at 8:09 am
Thank you Ben for introducing to this.
Nimeth
June 9th, 2010 at 8:21 am
I agree with you somewhat on your views, and also I really enjoyed reading your blog. You’ve been writing for a while now haven’t you? Anyways I’ll be back to read more of your posts later my friend.
June 30th, 2010 at 12:23 am
Dear Borin
Great perspective on e-commerce and quite the painful truth. However with the rise of Escrow, this give a chance for people to do e-commerce. It also ensures that the buyers would not loose their money. Hybrid escrow can be applied on e-commerce, whether you escrow the money or they escrow the item.
The issues with trust is not between buyers and sellers but the escrow agent. However trust may seem to take so long before you earn them but starting at some point will surely get you somewhere someday.
There is also an issue of what is e-commerce. There are some if not lots of companies claiming that they are e-commerce even without any product for sale.
Maybe you can write an article to define what is really e-commerce so that Cambodia may understand what it is.
Thanks. Hope to read more articles from you.
MekongMarket.asia
July 14th, 2010 at 10:42 am
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August 17th, 2010 at 9:39 pm
Almost everyone that earnsan income on the internet (even the millionaires) do so through affiliate marketing. Being successful in affiliate marketing involves applying the formula that makes other affiliate marketers successful. For example, autoblogging. Autoblogging is one of the least well-known forms of making money on the internet for quite some time… particularly because it’s quite difficult to make a good auto-blog. Yet, when done right, it can provide you with a perpetual passive income with the only real work required being the setting up process. Video Marketing, and several other marketing strategies are all designed to drive traffic to your site, can be incorporated organicly in order to raise the position your site appears in the SERPs when any one searches for a term related to your site. And yet, even this can be totally automated.