At City’s 2,500-Riel Shops, It’s Buyers Beware

By Hay Pisey and Simon Henderson | June 2, 2014

Customers may not expect top-of-the-line products when they shop in discount stores for shampoos, shower gels or beauty creams. But as a police raid on a 2,500-riel store in Phnom Penh last week showed, neither should they expect to get exactly what they are paying for.
Following a complaint from Pich Beauty Co. Ltd. that the 2500 Riel Mini Mart in Daun Penh district was peddling fake lotion in Leivy’s branded containers, economic police raided the store last Monday and confiscated hundreds of bottles of counterfeit toiletries and beauty products.

Customers browse items for sale last week at a 2,500-riel store on Sihanouk Boulevard in Phnom Penh. (Siv Channa)

The scale of the potential knock-off problem is unclear, but growing fast. Authorities have only a vague idea of how many 2,500-riel shops are operating in Phnom Penh, but say they are formulating a plan to make sure their deals are real.
Ly Kong, director of the municipal commerce department, said there are only seven 2,500-riel shops officially registered in the city. But he estimated that there are between four and 10 in every city commune—anywhere between about 300 to more than 700 such shops across the city.
“These sort of shops have been open for more than a year at least, but we have not got numbers for the total amount in Phnom Penh yet,” he said, adding that he would begin asking commune officials to get the figures.
Long Sreng, chief of the Ministry of Interior’s economic police department, who led last Monday’s raid, said it is highly likely that other products stocked by the city’s numerous 2,500-riel marts do not comply with trading standards, whether they are fake, rebranded or simply well past expiry dates.
For the economic police department, cutting off the supply chain of such fake goods will become a priority, he said.
“First of all, we intend to find out who produced the fake shampoos and other products we found [last Monday] because they pose a threat to the country’s economy and public safety,” Brigadier General Sreng said.
Police believe that empty branded bottles seized last week were imported from Vietnam and then filled with counterfeit product in Cambodia, and have compiled a report on last week’s raid and sent it on to Camcontrol, the Commerce Ministry’s customs inspection unit, he added.
“I don’t know when they will take action, but we have informed Camcontrol authorities and they will then go and carry out quality control checks in 2,500-riel marts, especially on food products that may have already expired.”
Mom Dany, 50, who runs four 2,500-riel shops in Phnom Penh, the first of which she opened two years ago, said she had heard all about the police bust on Monday but had no worries about a similar raid on her own outlets.
“I do not worry about police investigating my shops because the products are all listed with the correct expiry date and there are no expired or fake products,” she said at one of her shops in Chamkar Mon district, adding that her daughter and son-in-law travel to Thailand and China and purchase stock directly from wholesalers.
Ms. Dany said that as 2,500-riel shops are becoming ever more popular, with increasing competition between them, many retailers are likely feeling threatened.
“There must be some supermarket owners making complaints to the police because they charge more than 2,500 riel for the same product,” she said.
The 2,500-riel shops are also facing the threat of being undercut, with 2,400-riel stores now popping up. In a crowded market, discounted name-brands and household miscellanies are being sold for a fraction of the price they can be bought for at the supermarket, or even at the local market.
Chiv Ty owns two 2,400-riel shops and claims to have come up with the idea for discount shops in Cambodia after visiting Japan and seeing the success of similar stores there. Since he opened his first shop in Tuol Kok district’s Phsar Doeum Kor commune just one year ago, the venture has proved very successful.
“I make about $750 in an average day, earning a profit of between $100 to $200 per day,” he said, adding that he employs 10 people in each store.
His success, he says, is based on a simple premise—he sells products at prices that customers who earn low salaries can afford to buy, though everything on sale is not being sold at the eponymous price.
“My prices start at 2,400 riel and go up to $10,” he said. “But the same products in a market are hard to bargain, while my prices are low and they are set.”
He buys his goods exclusively from middlemen who come to him with whatever they have on offer. “About 80 percent of the products I buy are from China and the rest are from Thailand, Vietnam, or here in Cambodia,” he said.
But keenness for a bargain does not inure all customers to the potential risks involved. At a 2,500-riel shop on Sihanouk Boulevard, shoppers said they were not surprised at the police’s discovery.
“I would buy only some types of products in this kind of shop,” said 23-year-old Her Rainer. “I wouldn’t buy food and snacks or beauty products because I don’t trust those types of products when they are very cheap.”
Another customer, Hang Monika, also 23, said she shops at 2,500-riel stores for kitchen products such as dishwashing soap, plates and anything that doesn’t pose a health risk.
“I would never buy food and lotions at discount shops because I know they will not be good quality,” she said.
And the pay-off for all 2,500-riel-shop entrepreneurs is not guaranteed. The overabundance and proximity of selfsame discount shops selling similar or identical products has introduced some business owners to the law of diminishing returns.
Kim Leang said there are about six of the same shops on the same street as her store in Chamkar Mon district, all of which sell similar goods—all bought from the same wholesalers.
“I have been running my business for about a year now, and for the first half of the year, business was fine,” she said.
Now, many people are running the same kind of business and the glut of 2,500 shops now open on Street 271 has left her pessimistic about the future of her enterprise.
“My business is slow now. There are just too many shops on the same street.”
pisey@cambodiadaily.com, henderson@cambodiadaily.com

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