The lack of quality of local brands in Cambodia offers an opportunity for enterprising international advertisers, writes Eelco Dijkhuizen, general manager of TNS Cambodia.
Two decades of relative political stability and rapid economic progress means that Cambodia presents a market opportunity for international brands. But, in a country where only three in 10 people speak English and internet penetration is under 40%, launching and growing a brand can be a challenge.
Add to this an economy that is largely cash-based, and you’ll find that online shopping is rare and products need to be available in store rather than online. Salaries in Cambodia are often paid in cash and people, particularly in rural areas, turn savings into gold rather than opening bank accounts.
Despite these barriers, rapidly increasing mobile and internet use, coupled with a young population open to change, means that Cambodia is a market that brands should consider more than ever.
The biggest opportunity for brands is appealing to the large under 25 year old proportion of the population. These are the early adopters looking for new and exciting products, making it easier to break into a market that has previously been quite traditional and reserved.
The potential to target this millennial demographic is growing. Nearly all of these internet users are on Facebook – a key channel for brands. But brands must not forget classic channels – TV is still by far the most credible option with penetration of around 90%.
“Despite this potential to seize market share, few have stepped up to the mark”
The use of mobile platforms such as Wing, which enables people to deposit, send and receive money, are also gaining popularity as younger people look for a more advanced way to manage their money. This suggests that there is potential, and appetite, for online advertising and shopping in the future.
Levels of education and affluence are also rising in this group and, with it, the views of Cambodians are changing. This is demonstrated by young people’s career aspirations – the leading ‘dream’ job of 16 to 19 year-olds is medical services, compared to a job in wholesale or retail, which is the leading job for the population as a whole.
Door is opening
Together these conditions mean the door to Cambodia is opening. Whilst the majority of the population still have stronger preferences for local brands, due to the desire to support domestic produce and the ability to understand the brand name, more affluent consumers value international brands more. This highlights the importance of enhancing brand packaging and communications, for example with branding in both English and Khmer.
“Although there are clear challenges and barriers to entry, Cambodia is a promising market for global brands with trusted products”
Although consumers do buy local products, particularly those in the lower earning bracket, low quality products and a lack of strong brands mean that there is space for international brands to enter the market. Despite this potential to seize market share, few have stepped up to the mark.
One international brand that is making waves in the Cambodian market is Heineken. Heineken’s marketing over the last couple of years has included its ‘Dropped’ advertising campaign, where participants are stranded in a remote location and must use their wits to reach a given destination, as well as the Heineken GrooveTronic event series in Phnom Penh. These events introduced new concepts, styles and experiences to ingratiate the brand with the local people.
Global brands can also learn from local products that have succeeded in building a strong brand. One example that has enjoyed continued success in Cambodia is Angkor beer. Its marketing focuses on local culture and showcasing the beautiful landscape, creating an affinity with its customers. Angkor beer has relied on its status as a proud local brand by connecting with Cambodian culture, showcasing the landscape in its marketing.
Although there are clear challenges and barriers to entry, Cambodia is a promising market for global brands with trusted products. Marketers need to be adaptable to the habits of young consumers but the lack of quality of local brands does mean that there continues to be an opportunity for significant growth.
As internet penetration continues to grow there will be a case for e-commerce in the future.