New Cafe to Enter Growing Cambodian Market

Caffe Bene, South Korea’s second-largest coffee chain, on Tuesday announced plans to open in Cambodia, according to a Korean media report.

But while its entrance adds one more competitor to the more than half-a-dozen coffee chains already in the country, local franchises said the market is far from oversaturated as Cambodia’s middle class continues to grow—and has a taste for coffee.

“As…Cambodia [has] the potential to develop the coffee industry, the local business companies chose Caffe Bene, showing eye-opening development in Korea as a business partner,” the company said in a statement to The Korea Times.

Though the statement does not reveal the local partner or when the shop will open, it states the Caffe Bene will be located in the Boeng Keng Kang 1 (BKK1) commune.

With Caffe Bene’s entrance, the number of franchises in Cambodia’s coffee market increases to eight—most of which have shops in BKK1 commune, a large expatriate-and NGO area.

Rami Sharaf, CEO of RMA Cambodia, the investment firm that is the local operator of U.K.-based Costa Coffee, said his company was not worried about having another player in the market.

Mr. Sharaf said RMA had plans to open two more Costa Coffee shops in Phnom Penh in the next few months.

“We see more cafes, but we see more people going to them and enjoying them. This market is one of the most authentic indicators of the growing middle class because you have coffee shops entering it, but it is not affecting target numbers [as far as customers],” he said.

Kao Sovany, acting manager at The Coffee Bean and Tea Leaf, a U.S. chain that has two shops in Phnom Penh, said Cambodians are becoming more educated about high quality coffee, making it easier for franchises to enter the market.

“The coffee market in Cambodia keeps increasing, and there are a lot of people in Cambodia who are starting to become more globalized and understanding good coffee brands,” he said.

The entrance of international giants such as Caffe Bene, Costa and Coffee Bean has little effect on local coffee franchises such as Brown Coffee, according to co-founder and managing partner Bunleang Chang, who said that Brown is “quite stable.”

“We see a tremendous shift of customers who want something local compared to internationally. We are adding two more stores by the end of this year and our own grocery store and coffee bean roaster by February,” Mr. Chang said.

As for the international brands, he said, “The new entries are good because it offers a diverse mix of coffees for customers.”

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