Navigating the Cambodian e-commerce ecosystem with DHL

In the bustling world of Cambodian e-commerce, businesses are riding the wave of a digital revolution. As this dynamic landscape unfolds, it presents a unique set of opportunities and challenges. At DHL Express Cambodia, we're here to guide you through this journey, offering insights and solutions that empower your e-commerce enterprise to thrive. Let's explore the different factors that are shaping Cambodia's online shopping scene, from the industry trends of the most sought-after products to the logistics challenges, and understand how we can be your trusted partner in navigating this e-commerce ecosystem.

E-commerce trends in Cambodia

The Cambodian e-commerce landscape is evolving at a remarkable pace, and as the digital market continues to expand, so do the trends that shape it. In 2022, the numbers spoke volumes as a study by Statista projected a total revenue of US$979.90 million for the e-commerce market in 2023. 

While various product categories contribute to this growth, three stand out prominently in Cambodia according to Statista’s study: Electronics, generating an impressive US$253.30 million; Beauty, Health, Personal, and Household Care at US$241.80 million; and Fashion, with a significant US$217.10 million in revenue. These figures reflect the changing buying patterns of Cambodian consumers, as more people embrace the convenience and variety offered by online shopping. 

Understanding the e-commerce audience in Cambodia

To thrive in the dynamic world of Cambodian e-commerce, it's crucial to understand the diverse audience that drives this digital transformation. Demographically speaking, over 50% of e-commerce users in Cambodia fall within the age group of 25 to 44 years old, according to research by Profitence. Interestingly, Profitence’s study also found that female consumers slightly outnumber their male counterparts in this growing digital realm. These consumers predominantly belong to the low and middle-level income groups, reflecting the accessibility and appeal of e-commerce to a broad spectrum of society.

But it doesn't stop at demographics. To succeed, businesses and companies must also consider payment preferences. According to Profitence’s Ecommerce 2022 Report, cash payment for online shopping is slightly above 40%, which means almost 60% of respondents use online payment methods for online shopping.

Additionally, Visa's Consumer Payment Attitudes 2022 study found that credit and debit cards remain popular in Cambodia, with 68% preferring them over mobile wallets (32%). Among digital payment methods, QR payments lead the way at 36%, followed by swiping or inserting cards at 23%, and online card payments at 10%.

This rich tapestry of consumer behaviour highlights the need for businesses to tailor their payment methods and marketing strategies accordingly. Understanding the preferences of younger demographics and women in the Cambodian e-commerce audience and providing popular payment methods such as QR code payment is the key to tapping into this burgeoning market. 

E-commerce challenges

The growing Cambodian e-commerce industry presents businesses with both opportunities and challenges. To thrive in this dynamic market, companies must address common challenges faced by e-commerce enterprises:

1. Late deliveries

The Cambodian e-commerce landscape is thriving, but it's not without its challenges, one of the most pressing being late deliveries. As the demand for online shopping continues to surge, businesses find themselves racing to meet the heightened expectations of consumers. Late deliveries can be a serious headache, but they often stem from two primary culprits.

First, poor logistics can disrupt the smooth flow of goods from warehouses to customers. Inefficiencies within the transport and logistics systems, whether it's traffic congestion, a shortage of delivery personnel, or miscommunication between logistics partners, can lead to significant delays.

Second, inaccurate delivery estimates provided by online retailers can set unrealistic expectations. When the actual delivery time surpasses the initially estimated timeframe, customers feel frustrated and deceived, damaging their shopping experience.

How to address late deliveries

To tackle late deliveries, businesses can partner with a reputable logistics provider such as DHL Express. We offer a range of options tailored for urgent and time-sensitive shipping. These options include Express, Express Worldwide, and Express Easy, each ensuring smooth customs clearance, efficient delivery management, door-to-door courier service, and comprehensive end-to-end tracking visibility.

Furthermore, DHL Express Commerce (DEC) provides a sophisticated platform for integrating DHL Express services directly with your e-commerce website. Through an application programming interface (API) developed by DHL Express, DEC enables the estimation of delivery times, offering customers a clear view of when their packages will arrive. This integration is a significant step toward addressing late delivery challenges in Cambodian e-commerce, fostering trust and reliability for consumers. For more information about APIs, check out our guide on 3 APIs every e-commerce business in Cambodia needs.

2. Payment failures

Payment failures in e-commerce often arise from several key areas. One significant challenge is inaccurate data, where discrepancies in the payment information can lead to declined transactions. Payment orchestration failures are another concern, where the system's inability to effectively manage payment processing can disrupt the transaction flow. Errors related to consumer details, such as incorrect billing addresses or contact information, can also result in payment failures.

How to reduce payment failures

The solution to these payment challenges starts with enhancing the consumer's front-end experience on your e-commerce website. Overcommunication of the necessary steps and the details customers need to fill in accurately can significantly reduce payment failures.

Furthermore, the back-end payment processing systems play a crucial role. Staying up to date with evolving technology, industry regulations, local nuances, and other payment processing complexities is essential. Technologies such as machine learning and intelligent transaction routing can enhance the likelihood of payments being accepted and minimise the declination of legitimate transactions.

A vital part of solving payment challenges is choosing the right payment partner. Such a partner can navigate these intricacies and implement the best payment gateway solutions for your e-commerce needs, allowing you to focus on your core competencies. Moreover, offering a variety of payment options, especially those favoured by Cambodian consumers, can significantly reduce payment failures and create a smoother, more reliable e-commerce payment experience.

3. Lost packages

Lost packages can have a significant impact on e-commerce businesses in Cambodia. According to the report Fixing Failed Deliveries: Improving Data Quality in Retail, failed deliveries can result in substantial financial losses for businesses. However, losing a parcel in the world of e-commerce not only involves the logistics of retrieval or compensation but carries several consequences for businesses. 

Firstly, it can severely impact their reputation, as customers expect reliability and dependability when it comes to the delivery of their orders. This, in turn, results in reduced brand loyalty and trust, with customers becoming more hesitant to place future orders. Moreover, the ripple effect continues with decreased customer retention rates, as unhappy customers are less likely to return. Ultimately, these issues culminate in decreased sales as the loss of trust and customer retention takes a toll on a company's revenue and growth prospects.

How to safeguard your business from lost packages

When it comes to safeguarding your business and ensuring your customers receive their orders as expected, one key strategy is shipment insurance. Unforeseen events in the supply chain are beyond your control, but having your shipments insured is a proactive measure that can cover the costs associated with these events, allowing you to better serve affected customers.

Here's where DHL Express comes in to help protect your business and your customers. With our shipment insurance, we cover the complete invoice value of your shipment in the event of damage or loss during the shipping process while your parcel is in our care. For a nominal fee of US$10 or 1.50% of the insured value if higher (the value of your shipment), you can have peace of mind, knowing that your shipment is fully covered until it reaches your customer. Whether your customer requests a reshipment or prefers to be reimbursed, you'll have the resources to cater to them accordingly, aligning with your chosen strategy.

Also, it’s important to note that all lost parcels shipped through DHL Express are covered under standard liability if they are not insured. This coverage encompasses a percentage of your shipment's value when it is deemed lost, following a thorough investigation by our Customer Service department. In the ever-evolving e-commerce landscape of Cambodia, having the right safeguards in place is essential to the success and trust of your business.

Unlocking opportunities: DHL Express and the future of e-commerce in Cambodia