I had the pleasure of travelling to Siem Reap this past weekend. To my surprise, I enjoyed the city much more than I imagined. While Siem Reap is Cambodia’s largest tourist hub (thanks to Angkor Wat) I was astonished to see almost no franchises. There was one KFC. And a Dairy Queen at the airport. Nonetheless compared to Thailand where Western franchises abound, Cambodia is basically bare.
As most people are familiar, Cambodia was a nation in much turmoil until the late 1980s– meaning tourism as an industry only started to flourish recently. Apparently, Siem Reap in 2000 is completely unrecognizable from the one today.
Tourism in Cambodia is imbalanced; most visit Siem Reap than elsewhere. Still it is expected, as a country, Cambodia will attract 4 million tourists this year, up 11.73% from 3.58 million visits in 2012. A testament to predicted growth: Hard Rock Cafe plans to open in Siem Reap this year, and then a Phnom Penh location in 2014.
Okay, but what does this tourism boom mean? And what will be the effect on other industries?
Firstly, it is important to note that Cambodia is still classified as a “low-income” country– which brings downfalls and upsides. Downfalls being a lack of infrastructure and other services guaranteed in developed economies. Yet on the upside Cambodia is almost a vacant market filled with potential. Additionally, one can benefit from low operating costs. Another point to keep in mind is that in comparison to other Southeast Asian neighbors, doing business Cambodia ranks pretty poorly. (Probably because compared to other countries like Singapore and Thailand, though, development in Cambodia is in its’ early stages.)
Taking into consideration other aspects of the business climate, since 2004 foreign investment has increased significantly, particularly from Asian investors from countries such as Malaysia, China, Korea, Thailand, and Vietnam. Approved investment proposals by the Council for the Development of Cambodia surpassed $11 billion in 2008. Also promising is the fact that over 30% of the Cambodian population is under 30 years of age, meaning that Cambodia has one of the world’s youngest populations.
Looking into the future, the following industries are anticipated to grow substantially:
– Tourism Infrastructure and Resorts
– Architecture, Construction, and Engineering Services
– Household Goods and Appliances
– Agribusiness and Food Processing
– Used Cars and Automotive Parts
– Power Generation Equipment
– Fast Food and Beverage Franchises
– Pharmaceuticals, Medical Supplies, and Medical Equipment
(Wake up and smell the business opportunities!)
All and all, like the rest of the Southeast Asian region, Cambodia’s economy is starting to take off, resulting in new ventures. My advice: jump on the business possibilities while they last. Who knows how much room for others will be left in the next twenty to thirty years.
Image Credit – Sam Garza (originally posted to Flickr as Angkor Wat) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commmons