Cambodia is a neighboring market with many attractive features. Its border is close to Thailand so commuting back and forth is convenient. Also, the consumer market in Cambodia is not fully grown and the competition is not relatively high at the moment. SCB has opened 4 branches in Cambodia to provide extensive services to customers in several special economic zones such as Phnom Penh, Battambang, Siem Reap, and Sihanoukville.
 

Cambodia is a neighboring market with many attractive features. Its border is close to Thailand so commuting back and forth is convenient. Also, the consumer market in Cambodia is not fully grown and the competition is not relatively high at the moment. SCB has opened 4 branches in Cambodia to provide extensive services to customers in several special economic zones such as Phnom Penh, Battambang, Siem Reap, and Sihanoukville.
 

Here are 4 steps to know before starting a business in Cambodia. 

1) Observe customers and find an opportunity 

Dated back to 18 years ago, Khun Sombat was a distributor of “Kubota”, an agricultural machinery brand in Surin Province where the area is close to Chong Chom border, Cambodia. As over 80% of local Thai people over there can speak the Cambodian language, Cambodians regularly travel to buy consumer goods in Surin and also agricultural machinery items at Khun Sombat’s store. From his observation and talk to Cambodian customers, his products are in high demand and he anticipated a good opportunity to penetrate his business in Cambodia as the market is still open and less competitive comparing with business expansion in Thailand.

2) Make a field trip to prove it with your own eyes

When coming up with an idea to run a business in Cambodia, Khun Sombatwent out to explore the agricultural field to see it personally to gain real market insights. “I traveled to Cambodia through Aranyaprathet border and hired a travel van for 5-6 days to survey around Tonle Sap Lake, the largest freshwater lake in Southeast Asia, to check How big is the agricultural area, Is most area plain or slope? How do people do agricultural works? Is there any agricultural machinery store? At that time, Cambodian agriculturists mostly used animal labor and there were few machinery stores near the border”. After that, Khun Sombat made a market trial by increasing product orders to sell to Cambodian customers and his business was going well. A year later, he signed a contract with Siam Kubota Corporation Co., Ltd. as an agent to sell Kubota machinery in Cambodia.

3) Find dealers and partners 

When Khun Sombat firstly launched Kubota products in Cambodia, he delivered products through Cambodian distributors. At that time, he had to compete with Chinese machinery which is 70% cheaper than Kubota made in Japan. He coordinated with Siam Kubota to set a marketing strategic plan; Khun Sombat took charged of Dealers and product promotions while Siam Kubota was responsible for after-sales service. “Most Thai is quite worried about running a business in Cambodia and they are very careful on that. Anyway, the key is to select the right person to be your partner no matter which country you will go. My success in Cambodia starts with selecting dealers or partners who really have business passion with strong marketing intention, and are ready to grow with us in the long term”, said Khun Sombat.

At the first stage of marketing, in addition to product dealers, Khun Sombat shared his business experience in Thailand and helpful suggestions with his partners such as, selecting showroom location, installment sales methods, creating reliable quality and after-sales service, and encouraging customers to pay a slightly higher price for better value. Those are all concerns that we need to understand with local partners and adjust consumer behavior because Cambodians didn’t know anything about warranty over the last 20 years ago. Trading at that time was made by cash, verified products, and closed sales without product guarantee. Therefore, we need to educate both partners and customers all about those matters.

After 6-7 years of running the Kubota business, Khun Sombat saw growth opportunities in the automobile market in Cambodia so he exported Mitsubishi cars to be launched there. When considering the Cambodian population and the country space; if its economic growth was as much as the Thai market, the size of the Cambodian market would be around 20-30% of Thailand depending on the type of business.
 

Mitsu Cambodia Co., Ltd. currently has 3 showrooms in Phnom Penh, Siem Reap, and Battambang. Cambodian consumers tend to buy high-priced items at Phnom Penh more than upcountry. To provide extensive after-sales service for customers, we opened new branches in the provincial area and plan to expand two more branches in Phnom Penh very soon. Besides, we also plan to develop showrooms according to Headquarters’ rebranding policy to create Mitsubishi a more modern brand.

4) Customer needs come first 
 

The heart of achieving business success in Khun Sombat’s experience is “Customer first”. How to make customers buy your products and to feel good value for money, satisfy with our products and services. We realize that customer needs are essential. Suppose that we are customers, ask ourselves what do we need from the salesperson and what is our expectation, so that we will respond to them based on the principle that ‘customer needs are also our needs’. Most significantly, we must be honest to customers in order to keep their loyalty sustainably.

Tips for CLMV market penetration

Khun Sombat revealed that the challenge of running a business overseas is to make a proper investment. The business practices in each country differ from Thailand such as law, tax, import, and export process, transportation, document registration including culture and tradition. Those who are interested in doing business in that country will have to study all those aspects so the marketing will run easily well. Fortunately, SCB has local branches in the country that Khun Sombat wants to invest which is the Cambodian Commercial Bank – CCB, the SCB affiliate. At present, there are 4 branches in special economic zones; Phnom Penh, Battambang, Siem Reap, and Sihanoukville that facilitate customers with loans and several services. SCB will support customers from day one after they are qualified for starting the business in Cambodia. 

Khun Sombat has summarized 3 principles for those who want to set up a business abroad which are: 1. Find a local partner if you don’t know anything about that market. A good business partner will enhance the success of your business. 2. If we don’t have a business partner, we must understand the market, be familiar with the area, know what that market needs, and realize if that market is competitive. 3. If that market is competitive, it’s worth expanding your business as you can launch products in a new market while the competition in Thailand is remaining aggressive. It’s also a good opportunity for Thai entrepreneurs to bring their business to succeed in foreign markets.

Customers who are planning to run a business in CLMV or Great Mekong Subregion: GMS comprising Cambodia, Laos, Myanmar and Vietnam, SCB is pleased to support and service you at our international branches. Please contact – Here -