The Challenge

MSMEs are the backbone of Cambodia’s economy, accounting for 99% of the private sector, over 70% of employment and 58% of GDP. However, only 10% of exports come from small business. Increasing their market share to 30% – levels achieved by comparable ASEAN countries – could grow exports by an additional $3.2 billion.

In recent years, technological and digital advances have driven significant growth in e-commerce activities, in turn propelling growth in small package exports. To keep pace, Cambodia Post has needed to modernise its processes and services to provide MSMEs with an affordable, reliable and direct route to international markets.

The sheer volume of small packages also presents challenges for Cambodia Customs (GDCE), tasked with the efficient release and clearance of packages while ensuring consumer safety, national security, revenue collection and statistical analysis.

To address this challenge, the Alliance project tackled several key issues:

  • The lack of an Electronic Advance Data (EAD) link between Cambodia Post’s Customs Declaration System (CDS) and GDCE’s customs clearance system (ASYCUDAWorld) had created a slow and inefficient clearance process for postal shipments, affecting MSMEs disproportionately.
  • In the absence of EAD, packages from Cambodia were at risk of getting returned or destroyed by destination countries because of a lack of EAD compliance .
  • MSMEs lacked access to relevant, transparent information on the rules, procedures and costings for small package exports and imports, hindering their ability to engage in cross-border e-commerce.
  • Many MSMEs lacked general export readiness and needed to improve their business capacity in order to compete in international markets.

 

What We Did

1. Building the ‘missing link’ – Electronic Advance Data

The Alliance project is establishing a fully functional EAD system by seamlessly integrating Cambodia Customs ASYCUDAWorld and Cambodia Post’s Customs Declaration System, marking a significant step in digitalising Customs processes for international postal shipments.

It also included various supporting activities such as awareness campaigns, capacity building, and public relations before and after deployment.

The Impacts:

  • Improves access to Electronic Advance Data, potentially enhancing Customs’ risk management processes by enabling advance risk analysis.
  • Improves administrative processes and efficiency gains for Cambodia Post.
  • Increases regulatory compliance for outbound shipments, resulting in uninterrupted trade for MSMEs
  • Boosts transparency and accountability by promoting legitimate trade.
  • Facilitates the movement of international shipments sent by Post
  • Increases IT readiness in Customs and Post staff
  • Improves cooperation and trust between Cambodia Post and Customs.

2. Creating an eLogistics Solution: BoxShipper

Using its public private partnership approach to trade facilitation, the Alliance worked with the Cambodian Women Entrepreneurs Association (CWEA) to develop an e-logistics platform.

BoxShipper links with an e-commerce platform, allowing 600+ MSMEs easier access to postal and express shipment services for domestic and international e-commerce activities.

The streamlined e-logistics solution acts as a one-stop site for all tracking and delivery updates. It also displays real-time shipping rates, generates shipping labels and customs declaration forms that can be printed out for postal shipments, and online payment options for service fees etc.

The Impacts:

  • Reduces the administrative burden of shipping small packages for MSMEs.
  • Increases the transparency of shipping rates, delivery times and restricted goods for small-package exports.
  • Improves efficiency at Cambodia Post by enabling MSMEs to fill out shipping labels and export declarations online.
  • Reduces the likelihood of Cambodia Post receiving goods that are ineligible for export.
  • Improves MSMEs’ ability to engage in e-commerce by providing easier access to Cambodia Post and DHL express logistics options.

3. Building capacity in MSMEs: ‘SPEC’

The Alliance conducted capacity building programmes to boost export-readiness for MSMEs through a dedicated programme called Small Package Exporter Champions (SPEC).

The programme aimed to enhance MSME presence online and to increase their engagement in cross-border e-trade, particularly through small-package exports, taking full advantage of the improved e-trade environment delivered by the project’s EAD and e-logistics solutions.

Through workshops and tailored mentorship, dedicated trainers and mentors from both public ministries and the private sector provided information on a variety of relevant topics to further the success of exporting businesses .
Subject areas included:

  • Onboarding to e-commerce platforms
  • Building export readiness through business registration, product quality, production capacity, packaging, labelling and regulatory requirements among other things.
  • Digital visibility and branding for e-commerce
  • Logistics options, customs rules, fees and export procedures for small-package shipments
  • Opportunities to access international markets and making connections with international buyers

The Impacts:

  • Increased knowledge and awareness among 120+ MSMEs, 70+% of them women-owned or led, on topics related to cross-border e-commerce
  • Enhanced MSME export-readiness and capacity to engage in cross-border e-commerce
  • Increased MSME engagement in domestic and international e-commerce
  • Increased MSME exports of small package shipments via Cambodia Post

E-commerce has the power to democratise international trade and drive inclusive economic growth by unlocking the potential of MSMEs. The Alliance project in Cambodia is paving the way for MSMEs to venture into cross-border e-commerce by improving the country’s e-trade environment and increasing the capacity of small businesses, many of them women owned or led, to engage in international trade.