Thai investors are being urged to tap Cambodia, Laos, Myanmar and Vietnam (CLMV), notably in non-technology industries, as demand remains strong in those segments.
Narong Sawanpopan, senior vice-president for the policy and strategy department at the Bank for Agriculture and Agricultural Cooperatives (BAAC), said that while Thailand is shifting to high-technology and innovation industries, the four neighbouring countries are still seeking investment in infrastructure and essential consumer goods.
"The CLMV are emerging markets, so they don't demand products that are too advanced," he said. "Instead, what they need is non-technology goods and infrastructure development."
According to Mr Narong, investment in the CLMV has become easier compared with several years ago because the governments are working with the private sector to attract foreign investment and spur economic growth.
Mr Narong suggested Thai businesses focus their investment in the countries' special economic zones (SEZs), given improved facilities and management standards, plus their proximity to government offices.
"Investors will have access to more incentives and convenience if they invest in SEZs," he said. "Banks also have more confidence in [SEZ] investors when providing loans."
Mr Narong said investors in the CLMV are also looking for foreign partners.
According to Kasikorn Research Center, the middle-income population in the CLMV -- a combined population of more than 170 million, more than twice the population of Thailand -- is increasing. This translates to huge purchasing power, consumption and demand for luxury goods, travel, residences and wellness products.
Kasikorn Research Center predicts that GDP in the CLMV will continue to grow over the next 10 years, boosted by the Common Effective Preferential Tariff (CEPT) scheme of the Asean Free Trade Area, which calls for all goods of Asean origin to be free of import tariffs within the region in 2018.
Building on the CEPT is the Asean Trade in Goods Agreement. Both underpin the concept of a single market and production base with a free flow of goods, wherein goods are duty-free.
Free flow also reflects improvements to customs clearance processes such as the Asean Harmonised Tariff Nomenclature and Single Administrative Document, as well as the continuing work on the Asean Customs Transit System, e-origin certificates and the ambitious Asean Single Window.
Last year, the value of Thailand's trade with the CLMV was US$30.9 billion (1.03 trillion baht). Vietnam led the way with bilateral trade worth $13.9 billion, followed by Myanmar, Cambodia and Laos.
According to a Bank of Thailand report, the value of Thai investment in the CLMV last year was $11.6 billion. Of that total, $3.88 billion was invested in Myanmar, followed by Vietnam ($3.59 billion), Laos ($3.05 billion) and Cambodia ($1.04 billion).
According to Kasikorn Research Center, each CLMV nation has different business gaps and opportunities.
Cambodia needs more infrastructure development, consumer products and fashion products, while Laos wants daily essential products, convenience stores, branded franchises, fashion and beauty products.
Myanmar has demand for construction to improve its infrastructure and telecommunication sector to accommodate growing tourism. Vietnam has room for lifestyle products such as home appliances, beauty and wellness as well as IT products.
"Nonetheless, to capitalise on those markets, Thai entrepreneurs are advised to create business strategies specifically for each of the four markets," Mr Narong said. "Consumers in Cambodia, for instance, need Thai products but they also require good quality and reasonable prices, while Lao consumers prefer goods in small packages with creative design."
