Local vs foreign: food for thought

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Local vs foreign: food for thought

Hor Kimsay

After bringing Tous les Jours to Phnom Penh in 2011, CBM Corporation general director Sila Chy Thmor has also kept a steady flow of global food and beverage chains coming into the Kingdom. He now operates franchises of Singaporean eatery the Asian Kitchen, the French cafe Miam Miam and South Korean fast food restaurant Lotteria. He is also a founder of local brands BB World, Pizza World and T&C Café. The Post’s Hor Kimsay spoke to Sila Chy Thmor about the rising number of international chains setting up shop in Cambodia and how they have influenced local competitors.

Why did you decide to invest in bringing foreign brands to Cambodia?.
There is an emerging trend here of people preferring famous brands and more modern products. I have 10 years of experience in the F&B business and I know that about 40-50 per cent of young Phnom Penh residents are able to afford such products.

Five years ago, the price of local food such as noodles or fried rice was significantly less than a hamburger. But now prices of local foods are increasing sharply while goods like hamburgers and other fast food are only increasing gradually. In some instances, the price of noodles could be similar to or even more expensive than foreign foods.

Young people always want to try new things. They check in on Facebook at trendy foreign shops to show their modern lifestyle to friends and relatives. Lots of them will also post photos while out at these places, which can get others interested and boost business.

What kind of process and costs do you face when opening a new franchise?
It generally costs between $200,000 and $300,000 to acquire the rights to a master franchise for a 10- to 15-year period, and on average we spend about half a million dollars to open the first branch. This number includes the cost of securing the franchise rights, finding a location for the shop and renovating it, and much more. However, while these costs are quite high for the first branch, they are much lower for those that follow.

If it costs so much to buy in to a global chain, why do it?
The risk is lower when dealing with an established foreign brand, even if we need to spend a lot of our budget on the franchise rights. Brands like Tous Les Jours, the Asian Kitchen, Miam Miam and Lotteria are already famous, so when they open here everybody will know them and trust their quality. Another advantage is we can make our products with the high standards set by the franchiser, who also supports us with know-how.

You have also established your own food and drink brands. Does your growing emphasis on foreign chains mean you’re focusing less on your home-grown ones?
No, we are simultaneously working to strengthen our own local operations. I truly love my brands. They are very close to my heart. It would be very painful if I had to close one of them, so I am doing my best to make them more competitive. We are closely observing how the market evolves.

As you say, the landscape is changing. What will the future hold?
We are not sure what the market will be like; however, we know that clients want new things – modern, high-class and imported things. We are the supplier, so we follow our customers. Looking at other countries’ experiences, globally and regionally, after living conditions improve, international brands dominate the market. Sometimes, the foreign brands can kill the local ones.

This interview has been edited for length and clarity

http://www.phnompenhpost.com/business/local-vs-foreign-food-thought