Mandatory Site Operation License
Facebook Targeted by 70% of Young Users
Popular Korean Cosmetics Also Affected
[Asia Economy Phnom Penh Correspondent An Gil-hyun] The Cambodian government has strengthened regulations on the e-commerce market by requiring licenses for individual entrepreneurs selling products through Facebook. In Cambodia, Facebook is a preferred marketing channel for sellers. There are concerns that this could negatively impact Korean cosmetics, given the popularity of cosmetics sales on Facebook locally.
According to local media on the 13th, Cambodia recently amended the Ministry of Commerce decree to require corporations operating e-commerce (EC) sites, as well as those engaged in online marketing, auctions, and smartphone-based e-commerce, to obtain a license valid for three years. Additionally, individual entrepreneurs selling goods and services via social media must obtain a license valid for two years. However, those selling products and services they have created themselves or with annual sales under $65,000 are exempt from obtaining a license.
The main regulatory target is Facebook. Facebook is particularly preferred in Cambodia. As of June 2019, 8.8 million people, equivalent to half of the total population, are registered on Facebook. According to 'Geeks in Cambodia,' an IT-related news portal covering technology, startups, and social media, over 70% of Facebook users in Cambodia are aged 18 to 30. Because of this, not only small businesses but also larger companies heavily rely on Facebook. Especially with the increase in contactless sales during the COVID-19 pandemic, Facebook sales have grown even more.
The regulation of the online market is due to the fact that, unlike quantitative growth, qualitative growth has not been properly achieved. This is in consideration of various damages occurring due to indiscriminate product sales. According to Statista, one of Germany's largest statistical portals, Cambodia's e-commerce market sales are estimated at $182 million this year. Among these, the largest sales category is clothing, with a scale of $64 million. Cosmetics are also a popular category. Cambodia's cosmetics import volume grew at an average annual rate of 36.6% from 2015 to 2019. This year, it is expected to exceed $10 million for the first time ever.
According to the local cosmetics industry, in recent years, Cambodian women who have migrated to Korea have entered cosmetics distribution and are exporting to Cambodia in small quantities and multiple varieties without going through formal customs clearance, causing social problems. This peddler-style sales method is not recorded in official export-import statistics and does not register products with the Ministry of Health, raising concerns that products not meeting local standards may spread.
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