7-Eleven eyes 100 branches in Cambodia by year-end
Convenience store chain 7-Eleven is expanding rapidly in Cambodia, where it aims to open its 100th branch by the end of this year.
It also plans to open its first branch in Laos and add another 700 in Thailand, drawing on a budget allocated for branch expansion of 11 billion to 12 billion baht (US$318 million to $347million).
Thai retail businesses have increasingly expanded their operations in Cambodia, Laos, Myanmar, and Vietnam in recent years due to strong economic growth and rising purchasing power in the region. Moreover, the region has a young population that is seen as a strong consumer base. As a result, many Thai companies have expanded aggressively in the region.
CP Group’s CP All Plc operates 7-Eleven convenience stores in Thailand and has the license for 7-Eleven in Laos and Cambodia.
CP All entered the Cambodian market through subsidiary CP ALL (Cambodia) in August 2021, opening its first branch in Phnom Penh. By 2022, it had already opened more than 40 7-Eleven branches in Cambodia. As of April 2023, it had 60 branches in the country, and by the end of this year it is forecast to have 100.
The decision to expand into Cambodia was driven by several factors. The country's economy is growing fast and it has a thriving consumer market with rising purchasing power. Moreover, Cambodian consumers are responding well to Thai products. As a result, the 7-Eleven branches in Cambodia feature a wide range of Thai products.
Although Cambodia's economy is much smaller than Thailand’s, it is growing at a faster pace. According to the World Bank, Cambodia's GDP is expected to expand 5.2% this year, while Thai GDP is forecast to expand by 3% to 4%.
Jiraporn Thongtan, the head of investor relations at CP All, said the company opened 7-Eleven branches in the Cambodian market as a “market testing strategy”.
The response from consumers has been consistently positive, with some branches achieving a customer base of more than 1,000 consumers.
The branches are located in community areas, tourist destinations, educational institutions, and service stations. During the recent SEA Games in Phnom Penh, branches located near sporting venues saw rising sales, which affirmed the company’s plan to expand its branch network and invest in additional business infrastructure, including distribution centers to support future business growth.
In Thailand, it opened 209 new 7-Eleven branches in the first quarter of this year and will open 491 more this year to reach its target of 700 additional branches in 2023.
CP All remains confident about prospects for growth in the Thai market. The overall economic outlook for Thailand in the second quarter, along with confidence in the new government's economic stimulus policies, is expected to increase consumer purchasing power in the country.
Additionally, the expanding tourism market is expected to provide more support. It is projected that the number of tourists visiting Thailand will reach about 25 million people this year.
In the first quarter of this year, the average sales performance of 7-Eleven stores was 78,735 baht per day, compared to 76,659 baht per store per day in the first quarter of 2022. The number of customers visiting each store per day rose to 941 in the first quarter from 916 in the year-ago period.