[LIFT MAGAZINE]
When you enter a store in Cambodia, how do you decide between local and
foreign products? Foreigners might choose products from their countries,
but, surprisingly, most Cambodians also decide to choose foreign
products.
Many reasons contribute to this situation, but the major one is Cambodians’ perception of local products.
Volume
two of Cambodian Commodity Chain Analysis Study, a publication by
COSECAM and Plan Cambodia, suggests that negative perceptions by
consumers that Cambodian products are of poor quality relative to
imported products from Thailand and Vietnam is one of the barriers to
the industry growth.
According to an article published in
January, 2010 on the website of Louie-Thomas, a Vietnamese/European
family-run company that focuses on making boutique products, the overall
worth of Vietnamese products consumed in Cambodia is US$988 million.
Vietnam’s
major exports to Cambodia include instant noodles, plastic products,
tobacco, confectionery, seed corn, household products and vegetables.
The
71-page-publication of COSECAM and Plan Cambodia mentioned above also
said that while the perception that Cambodian goods are of lesser
quality is often accurate, some products are still successfully
competing well against imports due to the fact that at the local level,
they are better able to meet consumer taste requirements and have a
competitive advantage.
If the above statement is true that local
products better meet local consumer tastes, you might ask why many
people still do not use local products.
But if you pause a bit
and think about the prices of the products, you will see that some of
the same kinds of products have different prices between the imported
and local versions, and usually the imported products have low prices
because production costs in Cambodia are a bit higher.
With
reportedly 30 percent of the population living on less than two dollars a
day, I’m sure that Cambodians will select the cheaper one available.
Another reason causing Cambodian products to not get support from local consumers is weaknesses in marketing.
Since
Cambodian advertising and marketing industries have just emerged, the
concept of promoting products is not very developed, unlike in other
countries. Watching advertising spots of local products and foreign
products, and you’ll see the difference. Some local companies don’t even
have enough money to produce spots and advertise through media for a
long period compared to foreign products. As a result, some local
products remain unknown in the heart of Cambodians.
Some
negative aspects might arise if Cambodians continue to not support their
local products. First of all, the local company might face bankruptcy
because of lack of support. Also, we will spend a lot of money on other
countries’ products while only a little for local ones. As a
consequence, Cambodia will have no local strong brand to compete for the
regional, as well as the international, audience and that will affect
imports and exports as well.
For example, according to the US
Department of State website, in 2009, the amount we received from
exporting goods was only $3.9 billion, while the money we spent on
imports was $5.4 billion.
One more thing is that the current
situation might discourage graduated students from investing in
industrial business because they realise that no matter how good the
quality of the goods is, it’s still hard to convince Cambodians to use
their local products. As a result, a lot of human resources end up
working as staffers for foreign-brand companies in Cambodia because they
think it’s more stable than opening a business on their own.
Nowadays,
young people tend to start running businesses, but mostly businesses
related to services, such as opening a hotel, a restaurant or an
internet cafe rather than opening a business to produce local products.
However,
there are some positive signs that some institutions are working to
promote local products. In 2009, for example, the PRASAC micro-finance
institution sponsored a campaign to buy Cambodian products, and the
website khmerproducts.com has been created to promote Khmer products.
The Cambodian government has tried to promote Khmer products by
establishing the One Village One Product (OVOP) National Committee.
As stated on the committee’s website, OVOP is a concept to make products of high quality.
So,
if Cambodians begin using local products, and institutions work
together to promote Khmer products – for example, by creating more
frequent local product exhibitions – producers will try to improve
their quality, the economics will improve and the young generation will
have more jobs and more chances to use their skills.
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