A recent churn in the business landscape of Cambodia drew investments from worldwide. Till 2023, 54 SEZs were constructed in Cambodia. It speaks for the volume of new opportunities for economic growth in the country.   

In recent times, we saw a spike in the rate of entrepreneurship here. The consumption power of Cambodian customers is growing, as well.   

No doubt, the country is drawing ample attention from the global markets.   

Even some years ago, we knew Cambodia as an agrarian society. However, Cambodians have stepped up and recognized them as a progressive, business-minded society.  

Now, business hubs like Phnom Penh are globally reputed.  Above all, Cambodia’s economic growth has been 7.2% in the last two decades.   

Here we will discuss the rapid growth of business and future growth opportunities. We will also seek answers to the pertinent question- why do businesses succeed in Cambodia, and will they sustain themselves in the future, too?   

We will also reflect on why Cambodia should be at the forefront of considerations for any business visionary.  

1. Economic Growth Trajectory

Cambodia witnessed more than 7% economic growth in the last 20 years or so. We can give credit to a lot of sectors for achieving this astonishing growth. For instance, textiles, agro-firms, tourism, and others performed well.   

However, we must specially convey credits to department stores in the country. The retail space of shopping malls will increase by 19.32% by 2026 in Cambodia. Similarly, you must know that the QSR market of Cambodia is also set to witness an unprecedented growth of 14.5% CAGR.    

Both sectors received adequate government support, alongside profound investments from home and abroad.   

We must give the due credit to the Industrial Development Policy of Cambodia for 2015-2025.   

A large swathe of regional manufacturing growth can be attributed to this policy. Moreover, the growth in retail space of 19.3% is staunch proof in favor of an increase in manufacturing and construction.   

You may argue that expanding retail space means people’s purchasing power has grown. And you would be just right if you did so.   

Above all, Cambodia’s average income reached an all-time high of $1,458.880 in 2019.

2. Strategic Location

Trade critics say Cambodia is the gateway to many viable South Asian markets. I’d tell you that Cambodia is the best channel to access markets like China, India, Thailand, and others.   

Due to such a strategic geographical position, Cambodia has become a natural logistics station.   

The country is not only situated in the vicinity of potential markets. However, you must have noticed that its stretched coastline is also favorable for maritime trade. So, Cambodia plays a pivotal role in the growth of regional trade.   

3. Favorable Business Environment

The government is bent on leveraging the strength of entrepreneurs in Cambodia.   

I will discuss an instance to prove it.   

The QSR industry had a big gap. Cambodia needs 2000 additional restaurants by 2020 to compensate for the increasing volume of foreign tourists.   

Guess what?  

There are 1740 restaurants in Phnom Penh, standing in 2024.  

Are you wondering how the number of restaurants increased in this short span of time? 

Quick licensing, quality checking, and faster construction were possible due to the government’s support. 

But what did the government do to help?  

Other than making the licensing process easier, other innovative steps also followed.   

I recently checked that the business registration process became entirely online. The government also supported local businesses with tax rebates.   

In fact, Cambodia became a strong economy after its entry to the WTO.   

Moreover, I saw that Cambodia entered into free trade agreements with many Asian neighbors. For instance, 98% of exports from Cambodia to China are tax-free.   

In the past few years, many people asked me- if it is the right time to open a small business in Cambodia.  

I just told them- it’s now or never.   

But my question is – can businesses succeed without fluent investments?  

Certainly not.   

And I will also try to show how investments are working out, here.  

A stable business environment and help from the government inspired many investors.   

In fact, Cambodia rose from 187th to 144th rank on the World Bank’s Ease of Doing Business Index. I feel that things like this sped up foreign investments.    

4. Growing Consumer Market 

The number of people representing the middle class of Cambodia is growing by 35% annually.   

Experts say that intense urbanization and investment in department store retail resulted in the strong growth we can see now.   

Moreover, we see demand for finer department stores in Tier 1 and 2 cities. Similarly, I also found that many global lifestyle and luxury retail brands were launched in the country. 

5. Tourism And Hospitality Boom

Tourism heavily contributes to the inching economic growth in Cambodia. It is also a direct and allied contributor to economic growth. The gross earnings of Cambodia’s tourism sector were $3.04 billion last year.   

Tourism has massively supported other hospitality sectors like QSRs and hotels.   

QSR brands like Dairy Queen, Burger King, Krispy Kreme, Hard Rock Cafe, and others have opened more branches. It helps to accommodate the rising number of guests in Cambodia.   

But my question is why is tourism growing so avidly?  

The leading cause is the spectacular landmarks of the country. Sites like Angkor Vat attract 2.6 million tourists every year.   

The newly set up Cambodia Tourism Marketing Strategy is also important for the exponential growth of the tourism sector.   

6. Agricultural Advancements

Agriculture is one of the optimal contributors to Cambodia’s local economy. I found that approximately 22% of Cambodian GDP comes from agriculture.   

The government again plays a principal role here. Alongside promoting high-yielding crops, the government provides technical training to farmers.   

7. Emerging Technology Sector

Rigorous promotion and investment by the government are the pillars of steady growth in fintech, e-commerce, and IT services.   

Also, we see that 71.3% of the Cambodian population uses the internet and social media. That speaks much about the supportive ecosystem the Cambodian government could build.    

8. Manufacturing And Exports

Due to the increase in department stores, the popularity of apparel and lifestyle brands is on the rise.   

However, we also see an increase in the manufacturing of electronic products. So, this sector will soon dominate the Cambodian market.   

The government’s focus on industrial development, including special economic zones, offers businesses streamlined operations and market access advantages. 

9. Real Estate And Urban Development

We see a lot of urbanization around Cambodia. It helps in the massive growth of Cambodia’s real estate. The ample foreign investments also helps Cambodia to grow.   

This growth is not limited to the capital city. However, the tier 2 cities are growing as well. Urbanization is also occurring in the tourism-based cities in Cambodia.  It extends to secondary cities and popular tourist destinations as well. 

10. Investment In Human Capital

The Cambodian government is focusing on vocational education. It is also adopting other policies for skill growth.  

I saw that Cambodia is also focusing on core education. The country is not limited to skill-based learning only. Recognizing the need for a skilled workforce, Cambodia is investing in education, vocational training, and skill development. I found examples of active efforts to bridge the skills gap.  

At the same time, I see that they are supported by both international partnerships and private sector involvement. As a result, you’ll find that workforce capabilities are enhancing. 

This investment in human capital development assures companies a competent, adaptable, and skilled workforce, aligning with the needs of a rapidly evolving business environment. 

Conclusion

The market potential of Cambodia is discussed throughout the article. The Cambodian government should also be praised for many unique initiatives. Firstly, the business environment of Cambodia is much helpful. Secondly, Cambodia draws a lot of global investors.  

Cambodia can be a suitable place for investing. Any foreign investor can find lucrative business opportunities here. Cambodia also offers geographical advantages.  

Cambodia found many ways to improve their economy. With time, Canada has become more modern, as well. They also have a supportive government.  

I see that their marketplace is gaining strength, too. That means people are gaining more purchasing power. I feel that they will soon become a mighty economic force in the Southeast. Cambodia might also became one of the strongest Asian countries too.

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