Starbucks in downtown Phnom Penh will be open in early 2016. Image: Chea Phal/Tumnei.Wordpress.com

Starbucks Enters an Eager New Market in Cambodia

ASEAN

Starbucks is set to launch in Cambodia, with one location opening at Phnom Penh International Airport by the end of 2015, and another in downtown Phnom Penh in early 2016. Owing to a successful partnership spanning 15 years, Hong Kong Maxim’s Group will be the licensee of Starbucks Cambodia, with operations handled by Coffee Concepts (Cambodia) Limited, a local partner. Cambodia will be Starbucks’ 16th Asian market, with more than 5,200 stores and more than 80,000 employees already in the China-Asia Pacific Region. Once the new Phnom Penh locations are open, Starbucks will have a presence in eight of the 10 ASEAN countries.

Cambodia has seen remarkable economic growth, with an average growth rate of 7.7 % for two decades. Urbanization has accelerated in Phnom Penh, Siem Reap, and Sihanoukville, and the emerging middle class can afford premium products, which has facilitated diverse retail growth. New supermarkets and mega-shopping malls are sprawling in these cities and American goods and services are well regarded there.

T-shirts with the Starbucks logo are popular items in Cambodia since well before the company established a presence there. Image: cambodiamoments.com
In addition, the youth in Cambodia has become more sensitive to global cultural trends since international media has become more influential. The desire to spend time in cafés and go to American-style restaurants has led to success for US chains KFC and Swensens’. New brands and chains are in high demand among the large youth population, with 70% of all Cambodians under the age of 29.

Although there has never been a Starbucks in Cambodia, the Starbucks brand is already familiar there. In 2013, Starbucks t-shirts caught on as a hot item among teenagers. Though the coffee chain had nothing to do with the shirts, the Starbucks brand is already well-known and trendy there, suggesting that the company will have an eager customer base from the moment it opens its.

Seoyoung Baek is a Research Intern at the East-West Center in Washington, ASAN Washington Young Fellow, and an undergraduate student at Korea Advanced Institute of Science and Technology.