Most Cambodians still shop at markets, survey discovers

Wednesday, 14 October 2009 15:02 Nathan Green

New data show that the Kingdom’s new supermarkets and shopping centres still have a lot of work to do to entice shoppers away from traditional markets.

Photo by: Heng Chivoan

Checkout workers wait for customers at Phnom Penh’s City Mall last month. Most Cambodians still do the bulk of their shopping in traditional markets, a survey said Tuesday.

MARKET majority

Retail format most often used for shopping:

• Traditional markets - 37pc
• Local shops - 28pc
• Street vendors - 18pc
• Shopping centres - 7pc
• Supermarkets - 8pc

Source: Indochina Resource

MODERN retail shopping centres have sprung up recently in Phnom Penh, leading to tight competition for customers at a time when discretionary spending is under pressure from the global economic crisis.
But according to the results of a survey released Tuesday by Indochina Research, the toughest battle the city’s malls are facing is in luring consumers away from traditional markets.
Although the survey shows that almost 40 percent of Cambodia’s urbanites prefer to shop in modern-format shopping centres and supermarkets, just 15 percent cited them as the place they most often shopped. In contrast, 65 percent cited traditional markets, convenience stores and neighbourhood shops as the place they made the bulk of purchases.
“If you look at the data, the modern shopping centres still have a lot to do to attract consumers,” said Indochina Research General Manager Laurent Notin.
The survey was part of the market research company’s quarterly regional I-TRAK survey. It questioned 600 key household-purchase decision makers aged 21 and over in Phnom Penh, Vientiane, and Vietnam’s two major cities, Hanoi and Ho Chi Minh City.
Notin said the research indicated that consumers in Cambodia were beginning to change shopping habits in favour of modern retail options, but that convenience stores were reaping the benefits over shopping centres and supermarkets.
“The perceptions among consumers are that supermarkets are more expensive than convenience stores and traditional markets,” he said, adding that the company did not have a price index to determine the accuracy of the perception.
But findings from Vietnam, where 56 percent of those surveyed made the bulk of their purchases in shopping malls and supermarkets, gave hope for the modern format in Cambodia, Notin said.
“In Vietnam, supermarkets are bigger and provide everything under one roof,” he said. “Here in Cambodia, where it is the traditional markets that are known for having everything under one roof, we are far from that point. [The Vietnam findings show] there is still a lot to achieve in being more modern and attracting more people.”
Lee Hsieh Yu, whose Taiwanese firm Fu Yang Investment owns the four-storey City Mall Shopping Centre recently opened next to Phnom Penh’s Olympic Stadium, said the findings were not a surprise, but that he was confident that Cambodians would increasingly embrace the modern retail format if mall and store owners got the recipe right.
“We have promotions every month and we work with shop owners to improve their offerings,” he said, adding that goods had to be priced right and then discounts offered judiciously to attract customers. He also said it was important retailers improved the range of products on offer.
Home-grown favourites
The survey also looked at preferences for locally produced and imported products. Cambodian respondents showed the clearest preference for home-grown food and beverage goods with 58 percent preferring to buy local goods, compared with 52 percent in Vietnam and 44 percent in Laos. The numbers dropped to 54 percent preference for locally made personal-care products among Cambodian respondents and just 41 percent for durable goods, reflecting the paucity of decent-quality goods produced locally.
“It’s a good sign. There seems to be the space for local brands, but there aren’t a lot of local products now,” Notin said. “Vietnam has a lot more local brands, but here you can almost count them on one hand.”