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Top 5 Industries to Invest in Cambodia for 2023

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Cambodia has had an open liberal foreign investment regime for almost 10 years. The Khmer government allows 100% foreign business ownership, long-term and renewable leases for foreigners, corporate tax incentives, and even a seamless acceptance of dollar currency used inside the country. 

As an emerging market that has also proven itself stalwart in protecting its citizens’ welfare and reinforcing global ties, such as during the covid-19 crisis, there’s no doubt that Cambodia’s economy is rapidly growing. 

Key industries for investment in 2023 include the Kingdom’s economic pillars that weathered and stood against the pandemic’s erratic market situation, as well as more innovative sectors that were uncovered during the health scare. 

1. Infrastructure and Real estate

The Asian Property Awards has chimed in agreement with IPS Cambodia that Cambodia’s real estate sector will flourish this year. According to the latter’s country director, Adam Fitzpatrick, the steady pattern of growing deals, transactions, and inbound investment from overseas are likely to bring a rebound to pre-pandemic levels. 

Cambodian land and constructed properties have continued to attract high interest from international investors. While external factors such as the global economy will nevertheless influence the market, it is still a very optimistic year for Cambodian real estate. Corporations from Mainland China, Hong Kong, and Macau have already investigating feasibility of doing business with local properties. 

Potential investors would do well to prioritize the incorporation of renewable energy and green architecture, should they choose to invest in Cambodian real estate. The Ministry of Land Management, Urban Planning and Construction has already begun laying the foundation for promoting green buildings. Making this a key element in real estate projects is a surefire way to establish government support. Likewise, it would be a more sustainable strategy to make use of the country’s abundant natural resources.  

Overall, combining green architecture and the use or production of renewable energy may be the best way to go, as this would strike the balance between business feasibility and corporate social responsibility in modern real estate. While more time-consuming, it would be a more worthy pursuit. As Fitzpatrick has advised, “If you want to make a splash in the commercial market, do your research, find a trusted agent, and focus on relationships with advisors, and good opportunities will be introduced in time.”

Growth Projections of Real Estate and Infrastructure in Cambodia 

The infrastructure and real estate industries in Cambodia are growing rapidly. The construction market size in Cambodia was $11.2 billion in 2022, and it is projected to achieve an annual average growth rate (AAGR) of more than 6% during 2024-2027. The real estate market is also projected to grow, with demand for luxury properties expected to remain strong.

The growth of these industries is being driven by several factors, including:

  • Cambodia’s strong economic growth. The Cambodian economy has been growing at an average rate of 7% per year in recent years, and this is expected to continue in the coming years.
  • Foreign investment. Cambodia attracts increasing foreign investment, helping finance infrastructure projects and real estate development.
  • The government’s focus is on infrastructure development. The Cambodian government invests heavily in infrastructure development, creating new opportunities for the construction and real estate industries.

The following are some of the key market trends in the infrastructure and real estate industries in Cambodia:

  • The focus is on public-private partnerships (PPPs). The Cambodian government is increasingly using PPPs to finance infrastructure projects. This is creating new opportunities for foreign investors and local companies.
  • The growth of the tourism sector. Cambodia is a popular tourist destination, and the tourism sector is growing rapidly. This creates demand for new hotels, resorts, and other tourism-related infrastructure.
  • The rise of the middle class. Cambodia’s middle class is growing rapidly, and this is creating demand for new homes, apartments, and commercial properties.

Cambodia’s infrastructure and real estate industries are poised for continued growth in the coming years. The solid economic growth, foreign investment, and government focus on infrastructure development create new opportunities for these industries.

2. Logistics, Fintech, and E-commerce 

If there’s anything that the pandemic revealed on a global scale, especially across Southeast Asia, it’s that people are more than ready and willing to go online to run their errands. These include grocery shopping and retail to courier services.  

Shifting to online channels had been one way in which the pandemic affected Cambodia’s economy, and during that time online orders rose by more than 180%. The trend of relying on online platforms for shopping needs is here to stay, and sites like Aeon Online and La Rue are going strong even at the tail-end of the pandemic. 

Likewise, food delivery apps like Nham24 and Foodpanda continue to thrive even with more and more establishments reopening and reallowing their maximum customer capacity on-site. Businesses have dived into supplying through Alibaba, and khmer24 has become the country’s buy-and-sell hub. These came with the advent of cashless transactions and digital payment channels, of which Pi Pay currently holds the top position in Cambodia.  

Alongside other rising trends like customer service automation and remote working, digital platforms for logistics, commerce, and finance are set to remain at the top of the market and thus investment opportunities. Potential investors may want to investigate streamlining these platforms with other global e-commerce and payment sites, providing a win-win situation for both international and local buyers and sellers.

Market Size and Growth Projections of Logistics in Cambodia 

The logistics market in Cambodia is projected to grow at a CAGR of 6.3% from 2023 to 2028. The growth of the logistics market is driven by the increasing trade between Cambodia and other countries, the growth of the e-commerce sector, and the government’s focus on infrastructure development.

The market size of the logistics sector in Cambodia was estimated to be $1.5 billion in 2022. The market is expected to reach $2.5 billion by 2028.

Market Size and Growth Projections of Fintech in Cambodia 

The fintech market in Cambodia is projected to grow at a CAGR of 20.56% from 2023 to 2028. The fintech market’s growth is driven by the increasing use of smartphones and the internet, the growing demand for financial services, and the government’s focus on financial inclusion.

The market size of the fintech sector in Cambodia was estimated to be $100 million in 2022. The market is expected to reach $500 million by 2028.

Market Size and Growth Projections of E-Commerce in Cambodia 

The e-commerce market in Cambodia is projected to grow at a CAGR of 12.2% from 2023 to 2028. The growth of the e-commerce market is driven by the increasing use of smartphones and the Internet, the growing demand for online shopping, and the government’s focus on e-commerce development.

The market size of the e-commerce sector in Cambodia was estimated to be $1 billion in 2022. The market is expected to reach $2 billion by 2028.

3. Agricultural Manufacturing 

Agriculture has remained a major source of livelihood for most Cambodians, even lifting millions out of poverty and providing jobs for over 50,000 people. Secondary to the sector is manufacturing, with a hefty proportion of laborers working in garment factories. 

With the table open for large-scale investment in agricultural land and owning factory properties, investors may find a strategic window of opportunity for combining the two and adding heavy processing based on scientific research that maximizes the country’s natural bounties to produce unique items for both local consumption and global export. 

Examples could be specialty coffee and coffee products, including cosmetics; artisan spice blends to bring the flavor of Cambodian cuisine to tables all around the world; and even health supplements made from traditional Khmer herbs that grow in plenteous amounts throughout the countryside. Alternatively, investors could zoom in on handcrafted items and utilize these to promote a deeper understanding of local culture and traditions. 

These would be a refreshing and an innovative take on both agriculture and manufacturing, sectors which have proven to be boons of Cambodia’s economy and well-suited to provide numerous jobs for the local workforce. A start-up that has already begun doing so is Agri House, which describes itself as an “innovation impact venture working with marginalized communities.”

Market Size and Growth Projections

The agriculture manufacturing sector in Cambodia is estimated to be worth $1 billion in 2023 and is projected to grow at a CAGR of 5% from 2023 to 2028.

4. Healthcare 

Aging populations in Southeast Asia and increasing health awareness, especially after covid-19, spell a positive outlook for the healthcare industry of Cambodia. There has been an increased demand for not just medical services, but also pharmaceuticals and first-aid supplies, dietary supplements, and even fitness paraphernalia—anything that could help people enhance and preserve their vitality from the comfort of their own homes. 

Distinguished in Khmer telemedicine is MeetDoctor, the brainchild of Dr. Nit Buntongyi of northeastern province Stung Treng. Accessible via website, Facebook, and Telegram, this platform distributes access to not only consultations with physicians, but also medicine delivery and home lab testing. 

These present key investment opportunities in Cambodia’s healthcare sector today. It’s a solid option, given the population’s heightened attention and awareness of health as well as the growing availability of digital platforms to reach people, deliver items, and fulfill transactions online.

Market Size and Growth Projections

The healthcare sector in Cambodia is estimated to be worth $2.4 billion in 2023 and is projected to grow at a CAGR of 28% from 2023 to 2027.

5. Experience Tourism 

Tourism is another sector for which Cambodia has long been known for. While it remains a major investment point, a sub-trend is on the rise: experience tourism. 

Experience tourism involves unique experiences and an emotional connection with a country’s culture and nature. Travelers nowadays seek to mingle with locals and capture once-in-a-lifetime experiences than to spend on material souvenirs.

Market Size and Growth Projections

The tourism sector in Cambodia is estimated to be worth $2.6 billion in 2023 and is projected to grow at a CAGR of 5.5% in 2023 and 6.8% in 2024.

While such destinations have already existed within the Kingdom’s vibrant tourism landscape such as Khmer cooking classes and landmine-detecting rats, the years of quarantine periods and restrictions seem to have produced a collective thirst for life-enriching experiences. It’s especially apartment among the younger generations, such as millennials and Generation Z. 

Taken into consideration alongside the boom of remote work and the element of bleisure travel, experience tourism also points to co-working spaces designed to promote an almost radical level of work-life balance and wellness for travelers, whether they’re in the country on business or purely for leisure. You don’t need a huge parcel of land to invest in experience tourism—ingenuity and good idea of your target market’s underlying values will go a long way. 

Overall, the Kingdom is a promising landscape for new, exciting investments across an array of sectors, including traditional economic pillars. Given such a welcoming environment for foreign business owners and thriving human capital, there’s plenty of room for exploring innovative investment opportunities. Coupled with strong partnerships and strategies that prioritize both the country’s development and business growth, investors stand to gain much in an increasingly diversifying economy.  

Consult, collaborate, and contribute—key steps that should accompany any venture this 2023. 

IPS Cambodia Real Estate
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