The wave of consumerism spreading across the Kingdom is encouraging more Japanese investors to consider Cambodia as an attractive market in the region to promote their products and services.
Bilateral trade between Japan and Cambodian touched $1.9 billion in the first 10 months of 2019 – a sign that Japanese investors’ confidence in the Kingdom’s economy and its flourishing consumer society remains sturdy.
“There were around 40 Japanese companies registered but now there are close to 300 companies,” Japan External Trade Organization’s (Jetro) chief representative in Cambodia Miyao Masahiro told The Post.
Japanese investments are found in almost all sectors of the Cambodian economy – from supermarkets, garments and lifestyle, to physical infrastructure such as roads and bridges.
Major Japanese brands like Matsushita, Aeon Mall, Panasonic Corp, NTT Communications, Sumitomo Corp, Nippon Express and All Nippon Airways have established their offices in Phnom Penh.
“From an economic point of view, we have contributed to Cambodia’s growth and trade. Japanese companies hire and train Cambodian people. We help to increase its GDP [gross domestic product] and exports.
“So we are contributing to Cambodia’s economy and development through economic activities,” Masahiro said.
Rapid urbanisation due to rural-urban migration, the growth of an affluent consumer society plus rising consumer spending due to higher disposable income are all driving consumption – a boon to foreign investors.
Japanese hypermarket Aeon Mall, for instance, plans to open its third supermarket along Hun Sen Boulevard after entering the domestic market in 2014 (Aeon 1 is located along Sothearos Boulevard, with Aeon 2 in Sen Sok City), a clear reflection of a strong consumerism market.
“Other areas that we are interested in are education and healthcare. We are really keen to promote these areas. There will be a chance for Japanese companies to invest and a chance for Cambodians to have access to affordable new services,” Masahiro added.
He said Cambodia could take advantage of the “Thailand-Plus-One” strategy whereby Japanese companies extend their supply chain network based in Thailand to neighbouring countries.
“Many Tier-1 and Tier-2 companies are based in Thailand, and Cambodia can become a base for Tier-3 and Tier-4 companies that can supply products and services to those based in Thailand.
“Cambodian government is giving subsidies and labour costs are less than half [of Thailand], so it is really profitable. Many Japanese companies and other foreign companies are investing in Poipet town, which borders Thailand.
“Poipet is becoming a popular destination for Japanese investors. While the main companies are in Thailand, they can use Cambodia as part of their regional access. This is part of the Thailand-Plus-One strategy, which is popular among Japanese companies,” Masahiro said.
Japanese investors are also eyeing opportunities to work with local companies to develop quality products for the export market.
“There are lot of Cambodian products that do not reach the international market, so we need to add value to these products so that they can be exported.
“Cambodian pepper, cashew nuts, cassava and coffee are products that could be exported on a large scale and in a sustainable manner as this would definitely help local producers,” Masahiro said.