Challenging opportunities after COVID-19 Of Thai retail business in Cambodia

Cambodia is currently seen as one of the most attractive countries to invest in CLMV as its economy continues to expand and grow. In 2019, Cambodia saw a 7.1% GDP growth. In August 2020, though, Cambodia will be withdrawn some of its benefits in Everything but Arms: EBA sponsored by the EU. To drive the Cambodian economy away from being the least developed countries (Least Developed Countries: LDCs). The Cambodian economy can grow from the garment and footwear industry. Clearly, in 2018, exports of apparel and footwear accounted for 75% of the total export value. Causing approximately 1 million Cambodian jobs, improving the livelihood of Cambodians by approximately 33% (SCB EIC data as of September 2019), And escape poverty from World Bank estimates. Which is an important market of Cambodia Is a group of countries in the European Union As a result of the better living of Cambodia, resulting in the domestic economy growing There are many new businesses. And has more purchasing power as well.

Cambodia's economy over the past five years has grown an average of more than 7% per year and is still growing. Cambodia is a market that is still gaps and has the potential for future growth. Cambodians have more purchasing power. With the expansion of urban society, as a result, Cambodia is a market that attracts investors in the modern retail business and is actively interested in investing in Cambodia from Europe, America, Japan, China, and Thailand, not even Cambodian investors.

Today I would like to introduce 4 Thai entrepreneurs who have launched a modern retail market in Cambodia.

  • Makro by Makro ROH Co., Ltd. (Makro's subsidiary with Siam Makro Plc. 100% shareholding). Joint venture with local investors for 70% to set up a subsidiary in Cambodia. Opened the first branch in Phnom Penh. In December 2017 and branch 2 in Siem Reap in January 2019

  •  CP ALL has signed a 30-year contract to operate a 7-Eleven convenience store in Cambodia on May 5, 2020. And the contract can be renewed 2 times 20 years after Makro has successfully pioneered the Cambodia retail market.

  • Big C opened the first Hypermarket branch in Poipet Which is located near the Aranyaprathet branch of Thailand to provide mentors And as a learning model for business models Observe consumer behavior (If opening a branch in a large city, there will be a high cost of shipping)
    It plans to open the next branch in Phnom Penh or Siem Reap. There is also a project to open a Mini Big C to focus on reaching more local customers

  • Jiffy a convenience store in the PTT petrol station, the pioneer of the Life Station, which is more than refueling in Cambodia. It has a very successful and growing Amazon coffee shop in Cambodia. You can say that it can get the highest share of the coffee shop business in Cambodia. Now starting to open a Franchise store for Cambodian citizens It has over 100 branches in Cambodia, both in PTT pumps and on stand-alone.


Cambodia remains an investor destination in the retail industry. The market is not saturated. And can also support a lot of growth. Although there are many investors of various nationalities deciding to invest a lot. Causing the number of modern trade shops to continually increase. But the main channel for Cambodians to shop is still traditional markets, while modern trade accounts for only 20% of the total population. Most of them are concentrated in the capital and tourist areas. Modern Trade's main customer groups are young people with high purchasing power. And can be open to change as well

The SCB EIC said that although Cambodia was being revoked some of its privileges in the EBA from the European Union in August 2020. But Cambodia still has tax privileges. Generalized System of Preferences: GSP from the United States and Japan. Which is a huge market and has high purchasing power. In addition, the government has prepared an economic reform plan with an industrial development plan 2015-2025 that reduces dependence on exports of clothing and footwear products to 50%. And promote renewable new industries Emphasize a variety of export products and connect Cambodia's industry with the regional supply chain. It is also open to foreign investment. By providing benefits to foreign investors such as allowing foreigners to hold shares in the business up to 100%. And foreign businesses that are supported by the government Tax exemption can be up to 9 years, which the entry of foreign investors to develop Cambodian workers to have expertise in other industries apart from the textile industry. Moreover, in the later period, the tourism industry has played an important role in driving Cambodia's business. And accelerate the development of small and medium enterprises (SMEs) to become one of the main business sectors of Cambodia. By helping in tax breaks for 3-5 years.

The golden opportunity for Thai investors in Cambodia is huge. Cambodians are fond of Thai products. Especially consumer products. Absorb the products and lifestyle of Thai people from various entertainment media. Therefore, products from Thailand have an advantage over those from other countries. Although the prices of Thai products are higher than many competitors, Cambodian consumers still see the quality of Thai products that are suitable for the price. Therefore, decided to buy Thai products without hesitation.

Customers interested in doing business in CLMV or Great Mekong Subregion (GMS) countries include Cambodia, Laos, Myanmar, and Vietnam. Siam Commercial Bank has foreign branches that are ready to take care of and provide services. Interested contact https://www.scb.co.th/en/corporate-banking/international-network.html


Thanks for the good information from Cambodia Commercial Bank (CCB): 

 

References

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