It might seem crass to describe the arrival of an American fast food chain in the land of magnificent 12th century temples as progress. But in a country that has experienced such a troubled recent past, the opening of Kentucky Fried Chicken restaurants in Phnom Penh is further evidence that Cambodia is a country in which brand owners can have confidence.
Quick Service Restaurants (QSR), the Malaysian franchise holder for KFC, cites the country’s stable Government, liberalised investment laws and economy that has grown, on average, by nine per cent annually since 1998 as reasons for moving in. “Awareness of international brands has grown as more Cambodians have returned to their country after years away, to rejoin their families and start up their own businesses,” explains Benjamin Jerome, deputy general manager of QSR Cambodia. “There are also a growing number of multinationals moving in that employ expatriates familiar with international brands such as KFC.”
Though a third of Cambodia’s 15 million people live below the poverty line, living standards are improving and the discovery of oil and gas deposits in its waters, as well as rising tourism numbers, promise a better future for the Kingdom. FMCGs such as Nestlé and Unilever already have a presence. Now, banks are rolling in. HSBC Vietnam’s head of marketing Rose Leng says the company has been doing “preliminary market exploration”.
This will involve charting the progress of ANZ Royal Bank, a joint-venture between Australia’s ANZ and Cambodia’s Royal Group that launched in 2005. A campaign by BatesAsia has been persuading Cambodians that they are better off saving money in a bank than under their beds.
Bates was also behind the launch of Cellcard, mobile phone brand from MobiTel that entered Cambodia in 1997, and now dominates the market. Blitz Neri worked at Bates at the time of launch, and now runs the account at her own agency, BrandSolutions. She says: “MobiTel pioneered consumer marketing here. It is the category leader and marketing benchmark by which other brands are judged.”
In a country where around 70 per cent of the population is under 25 years of age, Cellcard has become the quintessential Cambodian youth brand. Using ‘coolness’ as its creative theme, Cellcard brought Cambodia its first international music festival. “There is a strong sense of pride in progression. Cambodians love international brands that localise by recognising their culture,” says Marianne Waller, head of Bates Cambodia.
But opportunites in Cambodia aren’t without obstacles. Advertising a new product will inevitably lead to an increase in the sales of smuggled imports, which are sold at point-of-sale at unregulated retail channels. This has led marketers to become preoccupied with distribution. “Distribution networks are important, but you mustn’t neglect to make your brand desirable. A common mistake is to enter the market to gain share-of- voice with a generic message - as there is little competition at the time - and not plan for when the category expands,” says Waller.
Although there are nine TV stations (excluding foreign satellite options), the media landscape is still basic, and Cambodians - 80 per cent of whom live in rural areas - can be tricky to reach. But a lack of clutter means brands stand a better chance of standing out and gaining loyalty if they move in early.
Barry Cupples, regional CEO of Omnicom Media Group, has been looking to launch in Cambodia to follow clients Visa and Fonterra. As he puts it: “Cambodia is fast-growing, forward-thinking and fast-emerging. Bottom-line: we need to be there.”
