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Small and medium enterprises (SMEs) are vital for economic growth and social inclusion. They account for 90% of businesses, 60-70% of employment, and 50% of GDP worldwide. To recognize their contributions, the UN has declared July 27th as World MSME Day.
In Cambodia, SMEs make up 99.8% of businesses and 70% of employment, but only 10% of exports. This is far below the ASEAN average of 30%. If Cambodia can strive for this target, it would significantly boost its economy with an additional $3.2 billion export revenue.
However, Cambodian SMEs face many challenges in accessing and competing in the global market, especially in the fast-growing sector of e-commerce and cross-border trade. To address this gap, the Improving Small Package e-Trade for SMEs” (SeT4SME) project was launched to enhance Cambodia’s trade performance and promote inclusive growth by enhancing the capacity and competitiveness of Cambodian SMEs in e-commerce and cross-border trade by focusing on two main workstreams:
Workstream 1: Establishing an Electronic Advance Data (EAD) system by interfacing ASYCUDAWorld of Cambodian customs (or GDCE) with Cambodia Post’s Customs Declaration System to allow advance sharing of critical customs and security information of the postal shipment electronically, to expedite the customs clearance process of international postal shipments. The workstream also features complementary supports to enhance Cambodia Post’s mail and logistics capacity for small package deliveries and contribute to Cambodia’s digital trade facilitation efforts.
Workstream 2: Boosting the online presence of Cambodian SMEs and facilitating their participation in cross-border e-commerce by developing an e-trade portal and supporting capacity building / networking building of MSMEs to strengthen their export capability in small package low-volume shipments.
The implementation of the EAD system will bring numerous benefits to Cambodian SMEs who want to sell their products online to overseas customers. Some of these benefits are:
Regulatory compliance: The EAD system ensures that the outbound postal shipments from Cambodia comply with the regulations of the destination countries that require EAD, such as the EU-Import Control System and US Stop Act. Without EAD, Cambodia’s postal shipments to these markets risk being returned or destroyed by their customs administrations.
Customs efficiency: The EAD system facilitates the advance sharing of data, so that customs and security information of the postal shipments can be received by customs ahead of arrival, making clearance and processing of imports and exports much more efficient. This reduces delays, costs, and uncertainties for both customs and traders.
Trade facilitation: The EAD system contributes to progressing Cambodia’s commitments under Article 7.1 on Pre-Arrival Processing, Article 7.4 on Risk Management, and Article 8.2 on Border Agency Cooperation, specifically between customs administration and postal operator, of the WTO Trade Facilitation Agreement. By aligning with international standards and best practices, the EAD system enhances Cambodia’s trade competitiveness and attractiveness as a trading partner.
The project runs many capacity-building and networking activities to support MSMEs and Women-owned Businesses (WoBs) in Cambodia. Among the interventions include:
The project also leverages Information and Communications Technology (ICT) to empower women entrepreneurs by developing an e-trade portal and linking it with a Cambodian e-commerce platform. This allows the 600+ MSMEs and WoBs vendors on the platform to access postal and express shipment services for their e-commerce activities domestically and internationally.
These interventions promote gender equality (SDG 5: Gender Equality, target 5.b) by using technology to empower women. They also support SDG 8: Decent Work and Economic Growth, specifically target 8.3, by improving cross-border e-commerce through trade facilitation and transparency. Moreover, the project contributes to SDG 9: Industry, Innovation, and Infrastructure, particularly target 9.b, by supporting technology development, research, and innovation in Cambodia. This fosters industrial diversification, adds value to commodities, and encourages SMEs to adopt digital platforms and technology-driven solutions. Additionally, the project aligns with SDG 17: Global Partnerships by enhancing trade facilitation and customs clearance for small package imports and exports. It aims to double the share of global exports from least developed countries like Cambodia (target 17.11). Effective partnerships with organizations like UNCTAD and UPU, as well as ministries such as the Ministry of Commerce and Ministry of Economy and Finance, are essential for the project's success (target 17.17), strengthening the global partnership for sustainable development (target 17.16).
The SeT4SME project is a timely and relevant initiative that supports Cambodian MSMEs and WoBs in tapping into the potential of e-commerce and cross-border trade. By establishing an EAD system and developing an e-trade portal, the project enhances the capacity and competitiveness of SMEs and WoBs in accessing and competing in the global market. The project also contributes to several SDGs and TFA commitments, promoting inclusive growth, gender equality, innovation, and trade facilitation in Cambodia.
The project is proud to celebrate World SME Day on July 27th, recognizing the vital role of SMEs and WoBs in economic development and social inclusion. The project hopes to inspire more SMEs and WoBs to join the e-commerce revolution and benefit from the opportunities offered by the digital economy. The project also invites other stakeholders, such as government agencies, private sector partners, donors, and civil society organizations, to collaborate and support SMEs and WoBs in their e-commerce journey.
Improving Small Package E-Trade for SMEs (SeT4SME) is a two-year project (2021-2023) of the Global Alliance for Trade Facilitation (the Alliance), implemented by Swisscontact in partnership with Ministry of Commerce (MoC), and with the collaboration of the General Department of Customs and Excise (GDCE), Cambodia Post, The United Nations Conference on Trade and Development (UNCTAD) and Cambodian Women Entrepreneurs Association (CWEA).