Bucking the Trend

While many businesses fight for survival during the ongoing pandemic, Capital Cambodia examines those that are positively thriving

The late American management consultant Peter Drucker, often upheld as the godfather of the philosophical and practical foundations of the modern business corporation, once famously said, “The entrepreneur always searches for change, responds to it, and exploits it as an opportunity”.

His observation has perhaps never been more relevant than today as the COVID-19 pandemic continues to exact not just a high cost in terms of loss of human life, but in the trail of global economic destruction it leaves in its wake.

While many retail businesses and food outlets across the nation have temporarily closed their doors as customers stay away in an effort to social distance, others, mostly in the online delivery space, are bucking the trend in plummeting profits and are positively thriving.

The recently new-to-market online grocery store, Grocerdel, is a prime example of this. The business started life as an app in 2019, attracting mainly expat customers with a “one-stop” service and the promise of freshly picked fruit and vegetables being delivered to their home.

Grocerdel has rather cleverly tapped into the sustainability trend, working with small-scale local farming businesses in the country and offering plastic-free delivery, and also say they’re playing a part in bolstering Cambodia’s “vulnerable agricultural industry against international threat”. This is a particularly seductive “sell” right now with food security high on the national agenda because of the effects of the pandemic.

According to Grocerdel CEO Priyanka Chetry, the app has been downloaded 2000 times so far and in response to increased customer demand, the company has launched a website platform. The original app had 600 products on its virtual shelves for shoppers to choose from; the website now features 2000 and has expanded to include sundries such as cleaning products.

And business is brisk, says Chetry. “We’ve had an overnight increase in sales volumes. Luckily, our committed team have been able to manage orders. We have increased health safety; the wearing of facemasks and gloves are mandatory. We’ve also been helping local businesses that are facing closure to sell off their stock through us. We have the space and are happy to hold the inventory if it helps our local partners.”

Smile Shop, billed as Cambodia’s leading e-commerce platform and the country’s version of worldwide delivery giant Amazon, is also seeing an increase in orders. Launched in 2018 by Chinese entrepreneur Jack Lee and available for download on iOS and Android devices, the business targets young Cambodians who are never far from their mobile devices due to data rates that are among the cheapest in the world.

The company reports an increase of XXXX in orders during February and March. Not only is this encouraging from a profit-making point of view but it points to the fact that Lee is starting to see results in terms of the biggest challenge faced by not just this e-commerce platform but all similar businesses in the country. With approximately 78 percent of the population “unbanked” and inherently distrustful of online transactions, Lee’s persistence in creating a simple user interface which allows for online payments or exchange of cash when items are delivered, is paying off.

Smile Shop is also supporting SMEs at this critical time. “We source many of our products from small and medium-sized businesses in the country, which not only help them but appeals to the consumer’s desire to buy ‘local’,” says Jack. “We are also aiming to outgun other sites by prioritising customer service and building consumer confidence in us. Using social media sites like Facebook is free – anyone can do it, yet many people are scammed with fake products every day. Our service centres are open to feedback, we accept returns within seven days and exchanges can be made within 14.”

Food delivery services have also reported a sharp growth in business since the virus emerged.

Muuve, a food delivery service app based in Phnom Penh, say that their orders are up by 130 percent and rising. The company partners with 80 percent of the capital’s restaurants and satiates customer’s hunger for everything from street food to take-out from their favourite dining spots.

Launched in the capital in 2018, Muuve crowdsources its delivery partners (called Muuvers) using an ‘asset-light’ approach. Currently, the company has over 18,800 different food items on its menu catering to locals, expatriates, and Chinese taste-buds via its 350-plus restaurant partners. Confidence in the company has been backed up by a recent undisclosed strategic investment by Cambodian venture capital firm Ooctane.

Muuve’s head of marketing, Houen Sodalen, attributes some of their increased trade with the stringent measures they are taking during the pandemic.

“To respond to the outbreak, we have also been working on developing a feature to track Covid-19 in all of Cambodia. We also teach our drivers to practice social distancing and hygiene throughout the whole process – from picking up food in stores to delivering it to the customer,” she says.
Nham24 is a similar app and its co-founder Som Tom says that in response to ever-climbing order numbers as people confine themselves at home to sit out the virus, he has recently expanded operations.

“We now partner with over 2,000 restaurants and stores in Phnom Penh and Siem Reap and I have my sights set on expansion into three further provinces, Kampong Cham, Kampot and Battambang.”

The company’s expansion plan encompasses the growing foothold such businesses are gaining during the pandemic, speaking to Peter Drucker’s observation about entrepreneurial exploitation of change as an opportunity for growth. And it’s not a foothold such companies will willingly relinquish when the virus eventually recedes, leaving the retail businesses and food outlet companies shut down in the health crisis with a serious game of catch up to play to avoid being closed permanently.