DHL Express has launched a new flight service between Phnom Penh and Bangkok, one of its hubs in Asia Pacific, reports Yahoo Finance.

This express freighter service, the first operating to and from Phnom Penh, adds to the existing DHL Express flights between its hubs in Bangkok and Singapore, extending the Cambodian capital’s trade ties to more markets across the globe.

The new route will help meet rising import and export demands in Cambodia, especially in high-growth industries such as garment and construction.

Trade between Cambodia and Thailand reached $5.1 billion in 2015, and the country also imported $1.05 billion worth of goods from Singapore in 2014.

What’s the point of Phnom Penh-Bangkok Service?

This service will enhance the country’s global connectivity and trade relations, which can eventually also extend to ecommerce. With the new scheduled services between Phnom Penh and Bangkok, the new DHL service gives Cambodian exporters constant access to its global network spanning 220 countries and territories. Bangkok is one of four hubs for DHL Express in Asia Pacific.

Cambodia’s economy expanded approximately 7% in 2015. Its logistics capabilities are also rising.

Cambodia is fast becoming an important trading player in Southeast Asia and the demand for movement of goods will grow in tandem.

According to a write-up in Phnom Pen Post, the country’s ecommerce potential is blocked by poor logistics infrastructure and a largely unbanked market but as logistics and trade strengthens, ecommerce will have the potential to experience meteoric growth.

A version of this appeared in Yahoo Finance on August 2. Read the full version here.

Payment cards on the rise rn Cambodia

VISA overtakes MasterCard in Cambodia, Source: Phnomphen Post

There has been a surge in both credit/debit card penetration and widespread acceptance in Cambodia according to Phnom Penh Post. MasterCard, the plastic payment-card brand of global financial services firm MasterCard Worldwide, has been present in the Kingdom since 2001, but until recently it was relatively unknown to most Cambodians.

To date, MasterCard has partnered with 13 banks – including six with foreign-owned banks – in Cambodia to deliver its products.

Currently, the total number of MasterCard credit and debit cards issued in Cambodia grew by 22% during the one year period through March 2016. The company recently announced a partnership with Cambodian bank Acleda, potentially accelerating growth within the next year.

MasterCard’s partnership with Acleda is a step towards a cashless society. The goal is to adopt and grow electronic payment methods and drive greater financial inclusion in the country.

1.4 million debit cards and almost 40,000 credit cards were issued in Cambodia last year. Acleda Bank was the largest single issuer of these cards, with almost 60% of debit cards and over a quarter of credit cards issued by them.

According to So Phonnary, Executive VP and Group COO of Acleda Bank, Cambodians are increasingly using MasterCard for electronic payments, which is why the bank decided it was time to issue its own MasterCard payment cards. Electronic banking is helping to develop payment systems in Cambodia, which can reduce dependency on cash based transactions.

There are also broader economic benefits in using credit and debit cards, cash printing and circulation can cost up from 0.5-1% of a nation’s GDP.

For an emerging market such as Cambodia, the small percentage fraction takes a considerable amount away from the country’s total GDP.

According to Limhong Fashion Shop, it is estimated that 30% of transactions made at the local store are either through MasterCard or Visa. This growth can potentially create more opportunities for ecommerce.

A version of this article appeared in Phnom Penh Post on June 6. Read the full version here.

Rocket Internet To Merge Ecommerce sites Daraz and Kaymu

Bjarke Mikkelse, Co-CEO of Daraz Group. Source: www.daraz.com.bd

In another Southeast Asian ecommerce B2C consolidation (and why that’s not surprising, explained here), Rocket Internet has announced the merging of its Lazada-like marketplace Daraz  operating in Myanmar, Pakistan, Bangladesh, and Kaymu in Myanmar, Sri Lanka, Cambodia, Philippines, Tech in Asia reported. The two ecommerce sites will be merged under a new entity, “Daraz Group,” although Kaymu is the larger one with 475 thousand visits overall compared to Daraz’ 11.5 thousands visits from January 2016 (Similar Web).

According to Bjarke Mikkelsen, co-CEO of Daraz Group, “Kaymu is the larger company in terms of customer base and orders, but Daraz is significantly bigger when it comes to the total amount of cash customers spend. The overlap between customers who transact on both Daraz and Kaymu is less than 10% of the combined user base”.

Operations such as marketing, IT and Business Intelligence will be centralized in Pakistan. Only in Pakistan and Bangladesh will the two ecommerce sites remain separate, in other markets, the sites will be merged under  “Daraz Group”.

The decision to centralize operations in Pakistan away from Paris means the group will also have considerably less overheads and be able to operate on a lean model.

A version of this appeared in Tech In Asia on June 24. Read the full article here.

 

Thailand-Cambodia Partnership Aims To Boost Trade

Foreign Ministers Don Pramudwinai and Prak Sokhon; Source: vietnambreakingnews.com

Thailand and Cambodia have agreed to upgrade four border checkpoints and open new ones to boost bilateral trade and tourism along the shared border. The goal is to increase trade volume between the two countries to $15 billion US over the next five years.

Thailand Foreign Minister, Don Pramudwinai, and his Cambodian counterpart, Prak Sokhon, have agreed to upgrade small border checkpoints, i.e An Ses, Phnom Dei, Thmor Da and Chub Kokei, to international standard checkpoints. The two ministers have also agreed to open the Stung Bot-Nong Earn international checkpoint and another border checkpoint at O Neng-Banbaray.

Trade exchanges will be a priority for the border as the two sides aim to increase the number of trucks carrying goods across the border, as well as facilitate trade application procedures.

The aim is to increase bilateral trade to $15 billion US in 2020, three times more than the current $5 billion. Currently, about 70% of Thai products exported to Cambodia were transported by road and passed through the Poipet international border checkpoint.

There is also a railway link between Thailand and Cambodia planned for the end of 2016 to increase trade between the two countries.

Advantages of upgrades checkpoints

The aim to open new checkpoints comes after reports show a 15% decrease in the two-way trade volume. Bilateral trade will urge Thai traders to strengthen the quality of products and promote new ones for Cambodia to import. This strategic partnership should be leveraged in order to boost the economic growth of both countries, while the new checkouts should create more trade opportunities in the region.

A version of this appeared in Khmer Times on June 22. Read the full article here.