Thai conglomerate CP Group’s Bangkok-listed subsidiary CP All Plc is said to be planning to raise the number of 7-Eleven branches in Cambodia to 100 by end-2023 from the existing 60 as of April to capitalise on the Kingdom’s rapid economic growth and booming trade between the two neighbouring ASEAN nations.
CP All Plc runs 7-Eleven convenience stores in Thailand and is licensed to operate the brand in Cambodia and Laos.
Prime Minister Hun Sen earlier this month predicted that, despite some challenges, Cambodia’s economy would grow by 5.6 per cent in 2023, while the World Bank (WB) recently marked up its projection for real economic growth this year to 5.5 per cent – from the 5.2 per cent it forecast in April – expecting that rate to climb to about six per cent “in the medium term”.
Thai media outlet The Nation reported late last week that Thai retail enterprises’ operations in Cambodia, Laos, Myanmar and Vietnam (CLMV) are generally growing quicker due to the region’s robust economic growth and burgeoning purchasing power.
Additionally, loads of Thai businesses have “aggressively” developed in CLMV countries as a result of the region’s young population, which is deemed to be a strong consumer base.
“CP All entered the Cambodian market through subsidiary CP ALL (Cambodia) in August 2021, opening its first branch in Phnom Penh. By 2022, it had already opened more than 40 7-Eleven branches in Cambodia. As of April 2023, it had 60 branches in the country, and by the end of this year it is forecast to have 100,” The Nation recapped.
It highlighted a number of factors that it said contributed to the decision to expand into Cambodia, including the country’s quick economic growth, thriving consumer market, and rising purchasing power, as well as Cambodian consumers’ positive reactions to Thai goods. As a result, the 7-Eleven outlets in Cambodia offer a wide variety of Thai goods.
Jiraporn Thongtan, head of investor relations at CP All, remarked that the business opened 7-Eleven stores in Cambodia as part of a “market testing strategy”, according to the Thai media outlet.
Cambodia Chamber of Commerce vice-president Lim Heng similarly commented to The Post that Thai businesses have been expanding their presence in the Cambodian market looking to profit from opportunities in the midst of robust economic momentum.
“One can see that, as the population continues to spend, especially on consumer items, our macroeconomic performance remains solid, despite regional and global economic slowdowns.
“The increasing presence of convenience stores like 7-Eleven underscores how very well [operators] comprehend our economic situation and how much support they’ve garnered from local consumers,” he said.
According to The Nation, consumers on the whole have responded favourably towards 7-Eleven, and some outlets have amassed customer bases of more than 1,000 people.
“The branches are located in community areas, tourist destinations, educational institutions, and service stations.
“During the recent SEA [Southeast Asian] Games in Phnom Penh, branches located near sporting venues saw rising sales, which affirmed the company’s plan to expand its branch network and invest in additional business infrastructure, including distribution centres to support future business growth,” it said.
Average daily sales per 7-Eleven outlet reached 78,735 baht ($2,260) in the first quarter of 2023 – ended March 31 – up 2.71 per cent year-on-year from 76,659 baht, with average daily customers coming in at 941, up nearly three per cent from 916 a year earlier, it noted, most likely just referring to the stores in Thailand.
This means that the average amount that each customer spent in the January-March period fell in the range of 83.626- 83.717 baht, accounting for rounding, about on par with 83.642-83.736 baht during the same time in 2022.
On the Stock Exchange of Thailand, CP All’s share price remained flat to close at 64.00 baht on June 20 for a market cap of 574.918 billion baht, 52-week range of 52.75-73.75 baht and price-to-earnings (P/E) ratio of 41.24, with 16.567 million shares traded, according to the bourse.
The volume of merchandise traded between the two kingdoms in 2022 was valued at $4.664 billion, up 14.22 per cent on 2021 and up 154.90 per cent against 2015, according to provisional GDCE figures compiled in “International Merchandise Trade Statistics” bulletins.
Cambodian goods exports to and imports from Thailand amounted to $831.772 million and $3.833 billion, respectively up 34.11 per cent and up 10.66 per cent year-on-year, expanding the former’s trade deficit with the latter by 5.54 per cent to $3.001 billion.
Thailand was Cambodia’s fourth largest merchandise trading partner in 2022, accounting for 8.897 per cent of the global total of $52.425 billion, compared to the top three: mainland China ($11.686B; 22.291%), the US ($9.281B; 17.704%) and Vietnam ($6.136B; 11.704%).
However, the Cambodia-Thailand merchandise trade has suffered a setback this year amid worldwide economic uncertainty, clocking in at $1.705 billion in January-May, down 8.78 per cent year-on-year from $1.869 billion and down 14.79 per cent half-on-half from $2.001 billion.
Still, Cambodian goods exports to Thailand reached $480.236 million in the first five months of 2023, rising by 9.47 per cent year-on-year from $438.705 million and rocketing by 84.47 per cent half-on-half (compared to July-November 2022) from $260.33 million.
At the same time, Cambodia imported $1.225 billion worth of goods from Thailand, down 14.38 per cent year-on-year from $1.430 billion and down 29.64 per cent half-on-half from $1.741 billion.
Thailand was Cambodia’s fourth biggest merchandise trading partner for the five-month period – behind mainland China ($5.076B), the US ($3.292B) and Vietnam ($2.871B) – representing 8.838 per cent, 5.229 per cent and 12.116 per cent of the latter’s international trade ($19.293 billion), exports ($9.183B) and imports ($10.109B), respectively.