A Change of Guard

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Tuesday, 19 April 2016

Vending machines find a niche

A motorist passes a vending machine stationed on a busy street corner in the capital’s Daun Penh district earlier this month.
A motorist passes a vending machine stationed on a busy street corner in the capital’s Daun Penh district earlier this month. Pha Lina

Vending machines find a niche
Tue, 19 April 2016
Ayanna Runcie

The vending machine in many developed economies is a regular fixture in transport hubs, office buildings and petrol stations. Nearly every conceivable consumer good has found its way behind a vending machine display case, from gourmet ready-to-eat meals, to 10 gram bars of pure gold, and – in Japan – even ladies' panties to satisfy the fetish habits of perverts disembarking the subway.

Yet in Cambodia, the coin – and bill – operated product dispensers are rarely seen, and rarely used – and with inventories limited to just a few almost entirely liquid items.

But Warm Family Co Ltd, which began distributing vending machines in Cambodia last June, sees room for growth in this barely tapped market. The firm, which started as a cosmetic and beauty treatment products supplier, has placed over 40 vending machines in Phnom Penh and Sihanoukville.

Ouch Sambath, Warm Family’s owner, said he was first introduced to the concept of vending machines during visits to countries overseas, which gave him the idea to bring the automated devices to Cambodia.

“I want to help Cambodia have high-tech things that are more convenient for both consumers and buyers, like in modern countries,” he said. “It satisfies both those who are highly educated, as well as the general public.”

Warm Family’s vending machines, which feature a bill slot, digital screen and glass display case, sell for about $3,700 or can be rented on a profit-sharing basis.

The machines are stationed in shopping malls, schools and banks – with a conspicuous solitary unit occupying the busy corner of Sihanouk Boulevard and Sothearos Boulevard in central Phnom Penh. Their alphanumeric-coded racks are stocked with beverages, including bottled water, soda and fruit juice cans, which are typically sold for between 1,000 and 4,000 riel.

According to Sambath, each machine averages about 100 sales a day – enough to potentially make street vendors jealous, though he has not had any showdowns.

Chan Kim Leang, general manager of Warm Family, said the company’s vending machines have so far only been used to display beverage products – and it could be some time before Doritos and Snickers bars find their way inside the display case.

“We focus on drinks because most people in Cambodia are not sure about the machines yet. If we sell food it will affect a lot of things inside of the vending machine,” she said, without elaborating.

While Warm Family hopes to lock up the local market on vending machines, a Korean-backed company’s units are increasingly visible throughout the capital.

Korea Andong, a trade name of the Cambodian subsidiary of South Korean agricultural products firm Andong Trading, has placed nearly a dozen units in Phnom Penh to date.

One unit located inside Build Bright University (BBU) in the capital’s Chamkarmorn district – and occupying a space next to a machine placed by Forward Cambodia – does particularly brisk business.

Leakhena Leng, one of the university’s administrators, said vending machine companies pay BBU $50 a month to park their units on the busy campus, and routinely stock the machines.

“A lot of students use the machines because they are convenient,” she said. “The company restocks the machines, and if the machines have problems the company deals with it.”

BBU student Yith Meng admits he has sunk a lot of riel banknotes into the machines’ bill slots.

“Whenever I come to school I buy at least one drink for 2,000 riel [$0.50],” he said. “I’ve spent maybe $200 so far.”

Additional reporting by Cheng Sokhorng

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