Why Cambodia Is Becoming a Prime Destination for Textile & Apparel Investment?

A Thriving Textile & Apparel Industry Since the 1990s

Cambodia’s textile and apparel industry has transformed dramatically over the past three decades, evolving from a modest manufacturing base into one of the country’s most influential economic pillars. Since the 1990s, exports of garments, textiles, and footwear have expanded rapidly, driven by Cambodia’s competitive labor costs, an increasingly sophisticated industrial ecosystem, and the advantages of multiple international trade agreements. These favorable conditions continue to attract global manufacturers seeking sustainable, scalable, and cost-efficient production.

The Engine of Growth Behind Cambodia’s Manufacturing Power

The garment, footwear, and travel products sector remains the heart of Cambodia’s industrial growth. In 2022, the industry reached a historic milestone with USD 12.8 billion in total exports, reflecting the sector’s resilience and expanding global demand. By December 2023, these products made up 62.26% of Cambodia’s total exports, supported by 918,718 workers and 1,680 factories producing bags and travel goods. The combination of a vast labor pool and strategic industrial clustering has secured the industry’s central role in the nation’s GDP and economic stability.

Read more: Why Invest in Electronics in Cambodia?

The Advantage of Preferential Trade Agreements

As a least developed country and active ASEAN member, Cambodia benefits from preferential tariff treatment with numerous global partners, including Australia, Canada, Japan, Iceland, Norway, China, the UK, India, Chile, South Korea, and more. These agreements help position Cambodia as a competitive exporter within Asia, Europe, and North America.

However, challenges remain. The United States applies an Ad Valorem Equivalent (AVE) tax of 14.31% on Cambodian textile and apparel exports, while the EU reduced certain trade preferences since 2020. Additionally, the Vietnam–EU Free Trade Agreement may create short-term competitive pressure. Nevertheless, Cambodia’s diverse trade partnerships ensure ongoing access to high-value international markets.

Read more: What Does the 20% Capital Gains Tax Mean for Cambodian Investors?

1. Consistent, Sustainable Economic Growth

Remarkable Economic Expansion

With a decade-long 10% CAGR in GDP, Cambodia continues to strengthen its macroeconomic foundation. Major improvements in electricity infrastructure, cost reductions of nearly 20% over the past ten years and a tenfold increase in capacity over fifteen years, further support industrial productivity.

Large-scale infrastructure investments enhance competitiveness, including the USD 1.9 billion Phnom Penh–Sihanoukville Expressway and the USD 150 million 38-road upgrade in Siem Reap, significantly improving logistics efficiency.

A Predictable Business Environment

The country’s stable inflation rate, foreign exchange consistency, and low unemployment contribute to a reliable investment climate, enabling long-term business planning for manufacturers and investors.

Commitment to Sustainability

Cambodia’s energy mix is increasingly green, with around 70% of installed energy capacity in 2019 sourced from renewables. Combined with one of ASEAN’s lowest CO₂ emissions rates, the nation is positioning itself as a responsible manufacturing hub.

Read more: Why invest in Cambodia?

2. Strong Trade Connectivity and Infrastructure

Favorable Regional and Global Trade Integration

Cambodia’s membership in ASEAN and participation in multiple FTAs—including those with China, Japan, Korea, India, Australia, and New Zealand, offer substantial tariff reductions and market access. Additionally, joining the Regional Comprehensive Economic Partnership (RCEP) connects Cambodia to the world’s largest trading bloc, representing 30% of global GDP.

Expanding Transport and Logistics Networks

As a key player in the Southern Economic Corridor, Cambodia forms a strategic bridge between Thailand, Vietnam, and Myanmar. With 17 airports, including three international hubs, and multimodal logistics in the Sihanoukville Special Economic Zone (SSEZ), Cambodia provides efficient access to global supply chains. The Phnom Penh–Sihanoukville Expressway further strengthens this connectivity.

Proximity to Fast-Growing ASEAN Markets

Bordering Thailand, Vietnam, and Laos, Cambodia offers manufacturers close geographic access to thriving consumer markets and integrated production chains. Four SEZs sit along the Thai border and 13 more along the Vietnamese border, strategically positioning producers for regional expansion.

3. A Competitive, Young, and Skilled Workforce

A Young, Energetic Population

With more than 60% of Cambodians under the age of 35 and a labor participation rate of 80%, the country provides a dynamic and abundant workforce ready to support large-scale manufacturing operations.

Rapidly Increasing Skills and Literacy

The literacy rate climbed to nearly 90% in 2019, while employment in secondary and tertiary sectors has grown 1.6 times since 2008. This shift reflects improving skills, educational access, and a maturing labor market.

Cost-Effective Labor

A minimum monthly wage of USD 208 keeps Cambodia among Asia’s most competitive manufacturing destinations—especially for labor-intensive sectors such as textiles and apparel.

4. A Conducive and Investor-Friendly Business Climate

Open and Fair Economic Policies

Cambodia guarantees equal treatment for foreign and local investors. There is no requirement for local equity participation, no government price controls for investment project outputs, and full freedom for currency convertibility and profit repatriation.

Attractive Investment Incentives

Qualified Investment Projects (QIPs) benefit from incentives such as:

• Up to 9 years of income tax exemption or special depreciation options
• Export tax exemptions
• Full import duty exemptions for construction materials, equipment, and production inputs
• VAT exemptions for locally produced inputs
• 150% tax deduction for R&D, innovation, worker welfare, training, and machinery upgrades

Streamlined Registration Processes

Through the Council for the Development of Cambodia (CDC), investors enjoy a simplified single-window approval system. If a project is not on the “negative list,” the CDC issues a registration certificate within 20 working days, fostering speedy business setup and operational start.

Source: CDC

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The ongoing Cambodian–Thai border conflict has unexpectedly shifted the consumer landscape in Cambodia. A grassroots boycott of Thai products, energised by the “Khmer Love Khmer” campaign, has led many Cambodians to consciously pull away from goods bearing the Thai label. What has this meant for Cambodia’s broader trade ecosystem and could this shift herald a bigger role not just for Vietnam, but also an amplification of Chinese imports?

Consumer Behavior in Flux: Say Goodbye to Thai Products

With tensions rising and the campaign gaining traction, Thailand-sourced products began slowly vanishing from shelves in July. Imports from Thailand plunged dramatically down 44%, falling from $297.4 million last year to $166 million in July alone, according to the General Department of Customs and Excise (GDCE). Many consumers, particularly via social media, have embraced the boycott enthusiastically. As Secretary of State Penn Sovicheat emphasized, no one is coerced into excluding Thai goods but consumers clearly feel entitled to choose their suppliers. Asia News Network

This consumer-driven market correction has opened a distinct gap — one that Vietnamese suppliers appear poised to fill.

Vietnam’s Opening: Geography, Trust, and Opportunity

Economist Duch Darin points out that the drop in Thai imports presents a golden opportunity for Cambodia’s other partners, especially Vietnam. Vietnam benefits from natural geographic proximity, cost-efficient logistics, and trade agreements all of which position Vietnamese goods to gain traction fast.

Read more: 3 Best Businesses to Make Passive Income in Cambodia

Nguyen Khac Giang of ISEAS–Yusof Ishak Institute echoes this, noting that Vietnam’s logistics advantage overland routes—helps Vietnamese goods reach Cambodian consumers faster and cheaper than alternatives. Add to that, Cambodia and Vietnam share strong diplomatic ties and mutual trust foundations ripe for accelerating trade.

Multi-Partner Strategy: Diversification, Resilience, and Stability

Darin suggests a multipronged approach: not only should Cambodia diversify imports across multiple ASEAN countries, but it should also boost local manufacturing and lure foreign investment in domestic production—creating a supply chain that’s both resilient and flexible. Import diversification, he notes, can also enhance Cambodia’s negotiating power and underpin regional stability.

Vietnam, meanwhile, is seizing its moment. A new trade agreement between Cambodia and Vietnam (starting this year into 2026) offers zero-tariff access on 28 categories of Cambodian goods into Vietnam, and establishes a joint trade committee with the aim of reaching $20 billion in bilateral trade volume.

Yet challenges persist: Vietnam Plus notes that poor warehousing, lack of border markets, prevalence of informal trade, smuggling, and quality control issues continue to hinder smoother commerce between Cambodia and Vietnam.

Meanwhile, China Is Already Dominating Imports

Amid all this, Cambodia’s trade with China remains remarkably high—and growing. In 2024, Cambodia–China bilateral trade soared to a record high of $15.19 billion—an increase of 23.8% over 2023’s $12.26 billion. Of that, $13.44 billion were Chinese imports—rising 24.6%—while Cambodian exports to China reached $1.75 billion, growing 18.4%.

Read more: How Will the Phnom Penh–Siem Reap–Poipet Expressway Boost Local and Regional Business?

That $15 billion represented nearly 30% of Cambodia’s total trade volume (~$54.74 billion) in 2024.

Breaking it down further: in January–October 2024 alone, imports from China reached $10.95 billion, while exports stood at $1.43 billion. China accounted for about 27.5% of Cambodia’s total trade in that period.

The composition of these Chinese imports spans a wide swath:

• Raw materials for factories critical to Cambodia’s export-oriented manufacturing sector
• Daily consumer goods, food and beverages, vehicles, machinery, construction materials, electronics, pharmaceuticals, and agricultural products.

In short: while Vietnamese goods appear as emergent players, Chinese products already saturate Cambodian markets. So, the question is less about whether Chinese goods are expanding—but how Vietnamese goods might carve out more space, especially amid Thai retreat.

Chinese Deepening: Trade, Infrastructure, and Diplomatic Backing

China’s role extends beyond simple trade. In Q1 of 2025 alone, trade between the two countries reached 33.33 billion yuan (~$4.53 billion)—a 13.1% year-on-year rise, outperforming China–ASEAN average growth by six percentage points. Agricultural trade featured prominently: China imported 980 million yuan in Cambodian farm produce, with cassava chips surging 879.7% and cocoa powder up 133.6%. Global Times

Meanwhile, Chinese exports of vehicles and lithium batteries soared respectively 183.7% to 840 million yuan, and 465.7% to 100 million yuan. Chinese fabrics, vital to Cambodia’s light manufacturing, continued rising for a seventh quarter. Yuan-based cross-border transactions also doubled in 2024 to 20 billion yuan, with goods trade accounting for 4 billion yuan (about 9% of total bilateral trade).

Read more: What is Cambodia’s National AI Strategy? Why Does It Matter for Your Business?

On the diplomatic side, President Xi Jinping concluded a state visit to Cambodia in April 2025—his first since 2016—signing 37 agreements spanning investment, trade, infrastructure, health, and more. He reaffirmed China’s deep commitment to Cambodia, positioning it as a key partner and strategic friend. AP News

The Chinese Surge Why This Matters in a Thai Boycott Climate

• Infrastructure: China is building Cambodia’s expressways, including the Cambodia–China-funded Phnom Penh–Bavet expressway, which, when completed, will further ease logistics, especially between Vietnam and Cambodia.
• Strategic positioning: Xi’s visit underscored China’s pivot toward Southeast Asia as a stabilizing and reliable economic partner amid global uncertainty. That sentiment resonates in Phnom Penh, especially as Chinese investment pours in through CDC-approved projects (reportedly accounting for nearly 50% of the $6.9 billion in investment in 2024).

In effect, where Vietnamese goods may be gaining traction thanks to consumer preference and logistics, Chinese goods dominate by sheer volume, infrastructure ties, and diplomatic momentum.

Looking Ahead: What to Expect in the Smart-Shopper Era

1. Vietnam Gains Momentum, But Must Overcome Friction Points

Yes, Vietnam is well-positioned—with geography, political goodwill, and trade frameworks. Yet poor warehousing, informal channels, and smuggling remain hurdles. If those can be resolved, Vietnamese goods could make significant inroads, especially in sectors like agro-processing, packaged foods, and consumer staples.

Read more: Is Phnom Penh’s Condo Market Still a Good Investment in 2025?

2. China Remains the Bulk Supplier

No boycott is large enough to unseat China from its role as Cambodia’s main supplier. From vehicles and electronics to raw materials and consumer products, Chinese presence is entrenched and still accelerating. However, as consumers grow more conscious, Vietnamese brands could grow premium or “new favorite” appeal.

3. Policy and Infrastructure Will Be the Force Multiplier

Cambodia’s expanding expressway network—built by Chinese firms—will benefit Vietnamese logistics as much as Chinese. Investing in border markets, warehousing, and transparent trade channels will be key. Incentives, SEZs, and streamlined imports could further tilt the balance in Vietnam’s favor.

4. Import Diversification: Both Pragmatic and Strategic

The Thai boycott highlights how consumer sentiment can disrupt trade. A diversified import portfolio—strengthened by multiple partners like Vietnam, U.S., Japan, Malaysia, and Europe—makes Cambodia’s market more resilient and gives consumers real choice. As economist Darin argues, a multi-partner approach can keep prices competitive and supply chains sustainable.

5. Branding and Quality Will Seal the Deal

Vietnamese products have an emerging advantage in storytelling: shared regional identity, perceived quality, and proximity. If Vietnamese exporters can elevate standards—packaging, branding, certifications they could ride the momentum of the Thai pullback.

A Market in Transition

Cambodian consumers are now flexing their economic power—voting with their wallets.

• Thai goods are retreating, both from enforcement and consumer preference.
• Chinese goods already omnipresent continue to surge, fueled by investment, infrastructure, and deep trade relations.
• Vietnam stands at the threshold of greater influence, with all the raw ingredients to capture a growing share but not without addressing logistical and informal trade challenges.

As Cambodia navigates a changing trade landscape, import diversification isn’t just a buzzphrase it’s a necessary evolution. One that can yield better consumer choice, regional ties, and economic resilience in the years to come.

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The digital landscape in Cambodia has evolved rapidly over the past decade, opening up a wealth of opportunities for individuals to generate income online. From traditional business models to more innovative approaches, the possibilities are vast. Whether you’re a tech-savvy entrepreneur or a creative content creator, the internet offers several avenues for making money online in Cambodia. Below are some of the best ways to do so.

1. Product/Service Affiliation

Affiliate marketing is a lucrative option for anyone looking to make money online in Cambodia. By partnering with companies to promote their products or services, you can earn a commission for every sale made through your referral link. This model is particularly popular in sectors like e-commerce, travel, and digital services. Cambodian affiliates can join global platforms like Amazon Associates or local programs offered by regional e-commerce giants. The key to success in affiliate marketing is to choose products that align with your audience’s interests and needs.

2. Consultation and Training Services

With the rise of digital communication tools, offering consultation and training services online has become more accessible. Whether you’re an expert in digital marketing, business strategy, language instruction, or any other field, you can monetize your knowledge by offering online consultations or training sessions. Platforms like Zoom and Google Meet make it easy to connect with clients anywhere in the world. In Cambodia, there’s a growing demand for English language tutors, business consultants, and IT training, making this a viable option for skilled professionals.

3. Social Media Content Creators

The boom of social media in Cambodia has paved the way for content creators to earn money through various channels. Whether you’re a YouTuber, Instagram influencer, or TikTok star, there are multiple monetization opportunities available. Content creators can earn through brand partnerships, sponsored posts, and even direct fan donations through platforms like Patreon. In Cambodia, social media is a powerful tool for reaching a large audience, and with creativity and consistency, content creators can turn their passion into a profitable career.

4. Software, Website, and Mobile App Development Services

The demand for digital solutions is increasing in Cambodia, creating a robust market for software, website, and mobile app development services. Whether you’re a freelance developer or part of a larger agency, there are plenty of opportunities to make money online by offering these services. Many Cambodian businesses are seeking to establish an online presence, and they require skilled developers to create and maintain their digital platforms. This sector is not only profitable but also offers the chance to work on diverse and innovative projects.

5. Monetization from Facebook, YouTube, and Google AdSense

Facebook, YouTube, and Google AdSense offer straightforward ways to monetize your online presence. If you have a website, blog, or popular social media channel, you can earn money through ad placements. YouTube creators, for instance, can earn through ads, memberships, and Super Chats, while Facebook offers monetization options for video content and in-stream ads. In Cambodia, where internet usage is steadily increasing, building a substantial online audience can lead to significant earnings through these platforms.

6. Selling Products Online

E-commerce is thriving in Cambodia, making it an excellent time to start selling products online. Whether you’re selling handmade crafts, clothing, electronics, or even digital products like eBooks and courses, platforms like Shopify, WooCommerce, and local marketplaces such as Khmer24 and DaraBuy can help you reach a wide audience. Dropshipping is another popular model that allows you to sell products without holding inventory. By leveraging social media and digital marketing, you can create a successful online store catering to the Cambodian market or even international customers.

Conclusion

The digital era has unlocked numerous ways to make money online in Cambodia. From affiliate marketing to offering consultation services, creating social media content, developing software, monetizing popular platforms, and selling products online, there’s a method to suit various skills and interests. The key to success in the online world is to remain adaptable, continually improve your skills, and stay updated with the latest trends and technologies.

Have you tried making money online in Cambodia? Share your thoughts and experiences in the comments below. Your insights could help others find their path to success in the digital economy!

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