As many small and medium-sized enterprises (SMEs) struggle to stay afloat because of current economic challenges, many entrepreneurs in the kingdom are adapting and taking advantage of opening businesses online and using social media and its technology as a business tool.
With the growing number of people owning smart phones as well as internet connections improving across Cambodia, more and more people are getting clued up on the latest developments.
Data from the Digital 2020 Cambodia study shows that out of the 16.6 million people living in Cambodia 58 percent of them are internet users and all of those internet users are active on social media accounts.
Such data shows how big of a reach online sellers have in Cambodia. Furthermore, with secure shipping companies such as DHL and UPS, businesses are able to reach out to the 3.8 billion social media users globally.
Anthony Murray, an e-commerce entrepreneur, selling beauty cosmetics within Cambodia, explained that he and his wife have built up their earnings to around $3,500 a month using Facebook and Instagram’s demographic targeting.
“We started the business two years ago and we have around 20,000 followers between our Facebook and Instagram business accounts. We are able to target our audience and choose who will see our advertisements in different parts of the country. We usually spend around $200 a week between the two platforms on advertising and usually reach around 100,000 people.”
“I think the use of the advert targeting technology has enabled our business to grow a lot faster than we ever thought it would.”
“I do, however, think that unless you know what you are doing when putting money into online marketing through social media you could lose a lot of money,” Murray said.
The targeting technology allows people to choose specifically who will see adverts and it is eerily accurate. It uses a variety of methods such as collecting data from what they input on the social media platforms as well as what sites they visit while logged onto those platforms in the background. They also receive data from third-party companies although governments are cracking down on such activities.
This week a formal privacy case was filed against Apple, arguing that an IDFA (Identifier for Advertisers) in iPhones lets advertisers track users and violates privacy regulations. The government of Cambodia is in support of people starting up e-commerce style businesses. However, they are reminding business owners that there are e-commerce laws in place and that they should be strictly adhered to.
Under Secretary of State and spokesperson at the Ministry of Commerce (MoC) Penn Sovicheat said: “We are happy to see prosperous business activities happening in Cambodia, whether that be offline or online but, for the sake of fair competition and consumer protection both kinds of business have to be regulated. In terms of online business, we have strict e-commerce laws and regulations in place to regulate business activities. We do encourage online business but it is the business owner’s obligation under the law to register with the relevant bodies, the MoC and the Ministry of Post and Telecommunications (MPTC).” He added: “It is understandable that during COVID-19 people are working hard and coming up with new ideas to earn a living but, as we have mentioned, online business activities have to be regulated under the law.”
On Aug 27, a sub-decree on “regulating licences for types of electronic business and exemption” was signed by Cambodian Prime Minister Hun Sen. According to it, “An electronic business certificate must be issued to individuals, private enterprises that operate electronic businesses in Cambodia, including those that use social media or electronic systems as a means of supplying goods and services.”
The E-commerce business licence for Cambodians is valid for two years and can be renewed. For foreign companies, enterprises and individuals, the e-commerce business licence is valid for three years and can be renewed.
E-commerce businesses exempt from the licence in Cambodia include small businesses on social media platforms such as Facebook and Instagram, leaving things in a slight grey area. They can sell anything legal online.
The social media platforms could be footing out on more tax bills in the years to come. Last week the MPTC and General Department of Taxation said it is going to collect tax on digital ads by foreign tech companies
that are not registered in Cambodia.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.