Intelligence Applied Emerging markets

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Nestled between Vietnam and Thailand on the Indochina Peninsula, Cambodia is often overlooked in favour of its wealthier neighbours. The country’s history has also cast a shadow over how it is perceived by the rest of the world, and with good reason. The genocide led by Pol Pot’s Khmer Rouge regime in the 1970s resulted in the deaths of an estimated 25% of the population, including many of the intellectual elite.

Yet forty years on, there are many reasons for optimism. The last 15 years have seen substantial economic growth, driven by the government’s efforts to attract foreign capital and build a stable investment environment. More recently there has also been a ‘southwards shift’ as companies facing challenges in China – including wage inflation and an ageing population – shift their focus to South East Asia. Cambodia also has a young, driven population (over 60% are under 24), determined to rise above the challenges of the past and rebuild the country’s image.

TNS measures a quarterly business confidence index, which tells us that companies are seeing steady growth year-on-year. But for brands just waking up to Cambodia’s potential, the question is what do local people really care about?

Emerging middle and high income classes are showing strong purchasing power, creating an opportunity for a wider pool of high-quality, international brands. The country’s first high-end shopping centre – AEON – opened in July in Phnom Penh’s Chamkar Mon district, showing the potential for similar developments in the future.

From Rolls Royce to Unilever, many multinational companies have already recognised Cambodia’s potential and established a presence in places like Phnom Penh, Battambang and Sihanoukville. Within the urban hubs, coffee and football count among Cambodia’s favourite pastimes. Phnom Penh’s café culture is booming, as shown by growth of Costa Coffee and local player Brown Coffee and Bakery, particularly among young people. From

The dark days are over: it’s time to meet the new Cambodia

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The dark days are over:it’s time to meet the new Cambodia

About the author Eelco Dijkhuizen, General manager of TNS Cambodia, has over 14 years‘ experience in market research. Originally from the Netherlands, he has worked for different research agencies across Europe and Asia.

Having worked and lived in South East Asia for over 10 years, Eelco has developed expertise on the region. Eelco has managed TNS Cambodia since it was opened in April 2012.

About TNS TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world.

TNS is part of Kantar, the data investment management division of WPP and one of the world’s largest insight, information and consultancy groups.

Please visit www.tnsglobal.com for more information.

If you would like to talk to us about this report, please get in touch via enquiries@tnsglobal.com or on Twitter @tns_global

football to Khmer kickboxing, the sports industry is also on the rise, thanks to growing investment from the private sector.

Cambodia has its own distinct heritage and cultural identity, meaning companies must be wary of ‘importing’ strategies from Thailand or Vietnam. Angkor Beer, the market leader, has taken a successful nationalistic approach with the motto, “My Country, My Beer”, helping cement its status as people’s first choice. Relative newcomer Cambodia Beer (with its tagline ‘National Beer, National Pride!’) is matching Angkor’s success with a similarly patriotic campaign. The fact is that targeted campaigns – including using local languages – are few and far between, presenting a golden opportunity for those who adopt a more tailored approach. Failing to translate the company’s slogans from Thai or Vietnamese can damage consumer perceptions right from the offset.

Yet despite the increasing wealth of the big towns and cities, brands need to remember that 80% of the population live in rural areas. Wet rice agriculture is a cornerstone of the economy – one of the classic ‘postcard pictures’ is of rice paddies scattered with sugar palms. Within these rural communities access to digital media is strictly limited, meaning most people are only reachable through a direct sales approach.

Linked to this is Cambodia’s low internet penetration, with only about 16% of people able to access information over the internet. Yet this number is creeping up as smart phone ownership continues to rise. More than 16% of mobile phone contracts are now for 3G services, with mobiles accounting for almost one quarter of all internet activity in Cambodia. As mobile leapfrogs other means of getting connected, companies are placing mobile marketing at the heart of their strategy for engaging new customers.

Far from images of killing fields and land mines, there is a bright future ahead for Cambodia. Brands looking to expand their presence in South East Asia would do well to look beyond Bangkok and Ho Chi Minh, and instead turn their attention to Cambodia’s forward-looking, aspirational population. From iced mochas to five-a-side football, this is a nation developing new tastes as it pushes ahead with its next stage of development.