E-commerce Acceleration and Formalization of MSMEs

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Background:

The global COVID-19 pandemic has created a major economic shock in Cambodia, predominantly in the garment, tourism, and construction sectors. These shocks have moreover had significant spillover effects on domestic demand and supply for other necessary basic needs. Local markets, which necessarily depend on physical buyer to seller contact are particularly affected due to precautionary social distancing measures. For many Cambodian micro, small and medium enterprises (MSMEs) and small household farmers these pressures pose an existential threat to their survival and business continuity.

Domestic consumer demand, however, remains strong for essential daily provisions. Most online marketplaces in Cambodia have therefore seen significant growth as people have resorted to shopping online and limited their movements to contain the spread of the virus.

To minimize the constraints caused by the pandemic and to ensure Cambodian MSMEs and small farming households have access to participate in the digital economy, the United Nations Development Programme (UNDP), with support from the Australian Government, has initiated the “E-commerce Acceleration Programme”, aiming to support MSMEs and small household farmers to digitalize and sell online in order to overcome the strains COVID-19 has put on their businesses.

UNDP has also partnered with the Ministry of Commerce and Enhanced Integrated Framework (EIF) to support Cambodia’s e-commerce ecosystem development through the project “Go4eCAM”, aiming to provide the necessary conditions for MSMEs to go digital and to gain access to much needed finance for e-commerce uptake and business formalization to support export readiness.

Key Expected Results:

Output 1: Digital transformation and e-commerce uptake of MSMEs and small household farmers are accelerated for business continuity and sustainable economic growth during and post pandemic.

Output 2: Capacity building and financial support are provided to MSMEs, with a special focus on women entrepreneurs and provincial business, to support e-commerce uptake that can expand their business opportunities to local, regional, and international markets for more inclusive and resilient economic growth.

Output 3: Employment opportunities within the sectors and provinces most affected by COVID-19 are promoted, in particular among youth, informal workers, redundant workers, and women in the logistics and hospitality sectors.

Output 4: An enabling environment for e-commerce development is built among stakeholders in the ecosystem through e-commerce awareness campaigns and public-private policy dialogues.

Achievements:

Two assessments have been completed to understand the additional capacity needs of e-commerce marketplaces and vendor readiness for e-commerce uptake.

The assessments build knowledge on both the existing e-marketplace capacity to onboard more vendors and the readiness of vendors/MSMEs for e-commerce uptake. 25 online marketplaces were interviewed, and one consultative workshop took place with approximately 30 representatives from business associations, local vendors and sellers, and e-marketplaces to validate the study results. Four key interventions to support e-commerce acceleration have been identified based on the findings.

An onboarding program has been launched to support 1,000 MSMEs to join existing e-marketplace platforms.

Approximately 1,000 MSMEs will undertake training workshops to develop the e-commerce knowledge and skills required to go online and will then be onboarded to existing e-marketplace platforms across different market categories such as food, consumer goods, and transportation.

E-commerce training workshops for 1,000 MSMEs have been developed to build their capacity to transition online.

Training on e-commerce related skills and knowledge for MSMEs to either go online by themselves or with existing e-marketplace platforms will be conducted both online and offline for 1,000 MSMEs located across the cities and provinces of Phnom Penh, Siem Reap, and Battambang.

A series of “Digital Business Talk” TV episodes have been broadcasted in collaboration with Cambodia Broadcasting Service (CBS)  to increase public understanding and awareness of e-commerce.

This series promotes public knowledge on e-commerce and national role models in the e-commerce space. An in-person awareness campaign and online campaign are also underway to promote the benefits of e-commerce, with a focus on digital adoption and digital payment among both vendors and consumers.

1,200 smallholder farmers have been onboarded onto an agri-tech platform, which provides easy access to agricultural supplies, technical information and trade credit support.

These rice and vegetable farmers are located in five provinces and  are trained to use the application for purchasing inputs, accessing extension services, and selling crops. The platform further enables farmers to access credit if needed.

Digital Business Talk - EP1

With the support from the Australian Embassy, Cambodia, UNDP Cambodia collaborates with CNC TV and CTN TV on developing a video program titled “Digital Business Talk". Today, we’re bringing you Mr. CHANN Borima, co-founder of NHAM24 which is a prominent local food delivery App. Watch the video below to discover whether COVID-19 is a threat or an opportunity for tech businesses! Disclaimer: this video does not aim to promote any business entity. It is only to share insights of E-Commerce ecosystem in Cambodia.

Digital Business Talk - EP2

Check out the second episode of “Digital Business Talk”! Dr. Seng Sopheap, President of the National Institute of Posts, Telecoms & ICT - Niptict, shares insights on the current ICT development, how it is impacting the e-commerce ecosystem, and what is needed for preparing talents in the digital economy era.

Digital Business Talk - EP3

Check out the third episode of “Digital Business Talk”! Dr. IN Channy, President of ACLEDA Bank Plc., shares insights on digital payments for small and medium enterprises to enter the e-marketplaces.

Upcoming Initiatives:

  • An incubation program will build the capacity of 100 MSMEs to sell online and across borders with a focus on woman entrepreneurs and provincial businesses.
  • A small grant program will provide financial support to approximately 50 MSMEs with the most potential to transform their businesses through digitalization and export.
  • A series of online and offline career forums will take place to promote employment opportunities within the e-commerce sector for redundant workers and those most affected by the pandemic.

Policy dialogues on the digital economy and e-commerce will take place to cultivate an enabling environment for e-commerce development among stakeholders in the ecosystem, ensuring no one is left behind

Partners:

With support from the Australian Government, UNDP has been working with partners to raise awareness of e-commerce and to build an enabling environment for e-commerce development. In 2021, UNDP will collaborate with the Ministry of Commerce and Enhanced Integrated Framework (EIF) under the project “Go4eCAM” to accelerate the digital transformation of MSMEs and enhance gender equality through women's economic empowerment.

The program will continue to seek multilateral partnerships with a range of stakeholders, including business associations and multinational corporations.

Status:

Ongoing

Project start date:

January 2019

Estimated end date:

December 2023

Focus area:

  • eradicate poverty in all its forms and dimensions
  • accelerate structural transformations
  • Project office:

    UNDP in Cambodia

    Implementing partner:

    United Nations Development Programme

    Full project information  

    Funding Support by

    Donor name

  • United Nations Development Pro
  • Worldbridge International (cambodia) Ltd
  • 4 Px Express Co.
  • Ltd
  • Undp Funding Windows
  • World Bank (int'l. Bank For Reconstruction & Development)
  • British Embassy
  • Government Of Cambodia
  • Amount contributed

    $10,443,664

    Delivery in previous fiscal year

    2021 $497,767

    2020 $2,808,419

    2019 $2,376,905

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