By:
• Dong Sakmay

• September 11, 2024 , 11:55 AM

PHNOM PENH – Cambodia is leveraging fast-growing e-commerce to digitize its paddy fields, a symbol of the nation's agricultural sector and its lifeblood. 

This transformation is creating opportunities for agricultural products but how is it empowering farmers and unlocking the potential of their products?

Buying and selling goods or services online is gaining popularity due to its convenience, value and wide range of products. A recent study showed that 90 percent of Agriculture Input Suppliers have a smartphone and internet access.

From 2020 to 2023, e-commerce revenue in Cambodia has grown from $813 million to $1,287 million. The market is expected to grow, with revenues estimated to reach around $1,500 million and $1,800 million in 2024 and 2025, respectively. 

The fashion, electronics and household care sectors mainly contribute to e-commerce. As e-commerce grows, it is a chance for the agriculture sector to seize the opportunities.

Agricultural modernization has become a top priority for the government. E-commerce has emerged as an efficient way to buy and sell produce. Supply chain efficiency can be improved, new markets can be created, and farmers can generate fair prices and income. 

E-commerce is a great way to simplify distribution, which cuts the costs of managing inventory, ordering materials, and labor. Cutting out intermediaries results in savings.

E-commerce also increases competition by bringing together large numbers of producers and suppliers. Cutting out middlemen can also draw farmers and customers closer and reduce prices for customers. 

It also lets farmers reach markets previously out of reach. Farmers can show their products and reach more customers online, increasing sales. 

E-commerce platforms are a convenient and secure way for customers to buy farm products, which can help to build trust and loyalty. They significantly impact society by creating jobs. In this way, e-commerce has become a good way to boost the agricultural industry and the economy.

As a case study, China is a leading e-commerce market among developing Asian countries. Its farmers in Shuyang of Jiangsu province used live streaming to sell bonsai plants, which led to significant sales. 

This rural area then became an e-commerce hub driven by farmers and entrepreneurs. Government's policies have advanced rural e-commerce, transforming agricultural markets and improving production efficiency. 

Farmers and entrepreneurs were connected to larger markets, attracting young migrant workers back to their villages. The economy has been revitalized and the social fabric of the countryside has been revived.

Despite the boost to digital transformation and bridging the divide between urban and rural areas, e-commerce in Cambodia still needs to improve. 

In 2022, tax revenues from e-commerce were $37 million, which increased to $39 million in the first half of 2023, according to the Digital Economy and Business Committee. 

Meanwhile, Cambodia has achieved the highest score in the second e-Trade Readiness Implementation Review by UNCTAD, with a 92 percent implementation rate for its national e-commerce policy. 

With such a successful implementation rate, Cambodia will likely attract more investors and expand its e-commerce market. However, it needs to improve its infrastructure and provide farmers with better digital and financial literacy. 

Cambodia has a rural population of 74 percent, which highlights the struggle of farmers in the countryside with poor internet connections, hindering their e-commerce efforts and emphasizing the need to bridge the digital divide.

E-commerce can transform agriculture by empowering farmers and creating new opportunities for local products. It connects farmers with consumers directly, improves supply chain efficiency, generates fair prices, and creates new markets. 

However, logistics and internet connectivity in rural areas are obstacles. The government and private sector must work together to tackle these challenges and ensure that e-commerce reaches its full potential in transforming the agricultural sector. 

The government must invest in digital infrastructure, provide training for farmers, and develop inclusive digital literacy and financing services. The private sector can also promote e-commerce in rural communities with investment, expertise, and logistics network building.
 

Dong Sakmay is a fellow of Adenauer Young Scholars for Excellence, a public policy training program co-organised by Konrad Adenauer Stiftung (KAS) Cambodia and the Institute for International Studies and Public Policy of the Royal University of Phnom Penh.