This is the year ecommerce is taking off in Cambodia

When Chhaleta Chharoat and her boyfriend Borey Chum launched Roserb in May last year, there were only few online shopping options in Cambodia.

Most people rely on a site that’s been around since 2009, Khmer24, which is a classified listings site for literally everything: cars, land, fashion, gadgets, and jobs.

Others have come and gone in this fledgling tech space. In 2012, Rocket Internet made a first attempt to establish an ecommerce site in Cambodia, called Shop, but shut it down after just two months. In 2013, marketplace 7makara made a big entrance, but now appears to be in an indefinitive offline mode.

Building trust

Chharoat and Chum started their ecommerce company with a different strategy. They picked a niche – cosmetics and skin care products – because Chharoat was already involved with the distribution of Korean beauty products in Cambodia. She knew from experience that there was demand.

“She complained that when shopping in regular local markets and shops, the service personnel are clueless. They don’t know the products they’re selling and can’t give advice. Sometimes the products are even fakes,” explains Chum.

That’s how they developed the idea for a cosmetics ecommerce site that would offer only quality products and put an emphasis on customer service. Chum built the system himself, and they started Roserb with 50 types of cosmetics items which they purchased themselves from Korea. “Then, one of our team taught himself how to take professional photographs. To this day, every single photograph on the site is taken in-house,” says Chum. The same goes for the design. Chharoat and Chum have an emotional bond with their brand, it’s easy to tell. Apparently, Roserb means “ticklish.”

A year on, Roserb has expanded its product inventory to cover baby products, fashion, jewellery, and accessories, as well as selected packaged food items.

It now offers about 2,000 items. “We purchased the products only in the beginning,” says Chum. “Now it’s on consignment basis with our partners.”

The couple values product quality and a curated inventory over mass. “We test the product before we decide whether to go with it. Usually we purchase a few of them, we test on the site if there is a demand, before taking on the product,” Chum says.

Startup number two

Chharoat and Chum are currently bootstrapping Roserb from their own savings. This is possible due to the modest success of Chum’s first startup. He previously built a software-as-a-servcie venture called Luxurymachine which encompasses a suite of digital tools for hotel management, including bookings and key card system. Family and friends helped him bootstrap that company, and now most hotels in Cambodia use the software, according to Chum.

Roserb’s transaction volume is small, but steady. The startup claims to be shipping 170 to 220 packages per month, at an average value of US$37.50 each.

The ordering process tends to involve a lot of manual labor. “Most people don’t buy through the website. They take a screenshot of the item they like, for example one they found on our social media channels. Then they send it to us through a Line chat, to make further inquiries,” explains Chum.

If the deal is on, the Roserb team creates the transaction in their backend, which sends a confirmation SMS to the customer. Within the capital city, cash on delivery is the most popular payment method. For the provinces, Roserb uses a popular Cambodian payment system called Wing, which allows mobile phone owners to send money to a mobile phone number. The owner of that mobile number can then go to a physical Wing station and receive cash.

Roserb’s team is small, with about ten people. At present, it is not yet turning a profit, but that’s because the company’s strategy is to invest in people first, which requires a lot of training.

The Roserb team in its Phnom Penh office

Ecommerce no longer the sleeping beauty

Up until the start of this year, Roserb was pretty much the only consistently developed ecommerce site in Cambodia, according to Chum.
But things are changing now. Two big ecommerce sites have made their entrance in Cambodia: January saw the launch of Maio Mall, developed by Cambodian conglomerate World Bridge International in conjunction with Acleda Bank. And since April, Rocket Internet is back, this time with an online marketplace called Kaymu.
Cambodia’s GDP, though still low overall, has been growing at one of the highest rates in the region, only behind Myanmar, says data from McKinsey Global Institute. In addition, internet penetration and social media adoption rates have been improving. The internet penetration is now 25 percent , shooting up from 16 percent in 2012.
These indicators are likely to be the reason why well-funded operations like Kaymu and Maio Mall are attempting to establish themselves in Cambodia now, while it’s still early. Chharoat and Chum are still sceptical about whether Cambodia’s inexperienced online shoppers are ready for the online marketplace model, or if large capital intensive retail sites can prevail.
“Just look at Kaymu’s site now. They are selling fake Beats headphones for a few dollars,” says Chum. In the long run, Chharoat and Chum believe, Cambodian customers will not be satisfied with fake or low quality products.

Editing by Steven Millward, image by Fred

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