Supplement maker Me Infinity Thailand is introducing a new energy drink in the Cambodian market, hoping to capitalise on some of the advantages the kingdom offers, including less competition.
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The company, which focuses on beauty and health products in the Thai market, will expand into the energy drink sector in Cambodia with its Iceberg energy drink, which falls somewhere between a more traditional health supplement (it includes ginseng and cordyceps extract) and a conventional energy drink.
“The company hopes to take a 20 percent stake in the $1.77-billion Cambodian energy drink market, dominated by Bacchus, which is produced by the Dong-A Socio Group,” said Salilaporn Kongthongmaneeroj, chief executive of Me Infinity.
Dong-A Socio holds approximately 60 percent of the Cambodian market, with upwards of 24 million cans sold per month.
“It is a less competitive and more profitable market than Thailand’s, that’s why we choose to enter this year,” Ms Salilaporn said, adding that they have already shipped one million cans of Iceberg to the kingdom.
If they can manage to achieve a 20 percent market share, Me Infinity will derive 50-60 percent of its revenue from the Cambodian market, where it currently sells no other products, Ms Salilaporn explained.
In that case, the supplement company’s annual revenue would double from $3.05 million in 2017 to $6.1 million next year.
In terms of marketing the company is shying away from the heavy promotion models favoured by local competitors.
“Promotions deplete profits, which are much higher in Cambodia than in Thailand because there is much less competition,” said Ms Salilaporn.
The decision to forgo promotions is also a strategic choice. Executives hope that consumers will place the drink on the same level as Bacchus, which does not usually run promotions.
A lot of drinks in the Cambodian market already contain ginseng, but no drink contains cordyceps extract, although Bacchus may move to include it in its Cambodian formulation soon. The drink will also contain about 50 percent less caffeine than its competitors, which Ms Salilaporn said is a draw for health-conscious consumers.
Energy drinks are a staple in Cambodia, where the average energy drink consumer drinks 2-3 cans per day. Demand is fuelled by a large population of day labourers, said Ms Salilaporn, but Me Infinity will target all segments of the population.