Cambodia crisis hits Thai brands, disrupts logistics and halts ad spending

The ongoing Thai-Cambodian border conflict, which has escalated into armed clashes in several areas, has led to the closure of border trade checkpoints since June 24, 2025. 

The shutdown has disrupted cross-border business, forcing exporters to switch from road to maritime transport, resulting in significant delays. 

As the unrest persists, the impact on business has widened, with Thai brands operating in Cambodia suspending marketing communications and companies planning market entry postponing their launches until conditions stabilise.

Romtham Sathientham, managing director of Carabao Group Plc, said the closure of the Thai-Cambodian border in June directly affected the company’s energy drink exports. “We were unable to transport goods by land for seven to eight days, so we had to switch to sea freight, which delayed shipments and hit second-quarter sales,” he said.

Exports to CLMV markets, Cambodia, Laos, Myanmar and Vietnam, contracted by 4% during the quarter.

Given the ongoing conflict, the company has prepared multiple risk scenarios. In the worst case, if shipments are halted entirely, sales in Cambodia could be suspended for up to two months.

For now, however, Carabao is continuing to build stock in the market. Its Cambodian energy drink plant is now scheduled to open in December 2025, with the timeline moved slightly forward.

“Since the closure of the border trade checkpoints, we couldn’t deliver at all. Our second-quarter sales could have been tens of millions of baht higher than reported if we had been able to sell during those days. Although exports to Cambodia have now resumed, we expect the impact to be more visible in the third quarter,” Romtham said.

In Thailand, sales of energy drinks, particularly in areas close to the conflict zone, have so far been unaffected, with a slight increase from purchases by frontline workers and for donations.

“The energy drink market sells hundreds of millions of bottles each month. Border areas might see an increase of a few hundred thousand bottles, but it’s not significant for growth. In the first half of the year, the market grew about 5%,” he added.

Thai brands in Cambodia halt marketing amid conflict

The escalation of the Thai-Cambodian conflict, which has led to border clashes, has forced Thai brands operating in Cambodia to suspend marketing and advertising activities.

Companies expect this to be a temporary measure, as demand for energy drinks in the market remains strong and supply is still insufficient. Thai products also retain their appeal among Cambodian consumers in terms of quality and brand image.

“Overall, Thai goods and brands may face some challenges, but we believe this will be short-term,” a senior executive from Carabao Group said. “The emotional sentiment in Cambodia is still there, but over the next six to twelve months, we hope the situation will return to normal, as Cambodians like Thai products in much the same way Thais appreciate Japanese goods. Most of our advertising is via television, which we have put on hold for now; that cost is borne by our partners.”

70% of Cambodian factory workers recalled home

Sommat Khunset, chairman of Pan Asia Footwear Plc, said the conflict has also triggered a sharp outflow of Cambodian workers. Around 70% of the company’s roughly 100 Cambodian factory employees have been recalled to their home country, cutting shoe production by 20–30%. The company employs around 2,000 people across its operations, including retail staff.

To address the labour shortage, the firm is recalling Thai workers and bringing in Myanmar nationals, though only a small number can enter Thailand each day due to procedural constraints.

“Most of our Cambodian staff have been with us for a decade or more, renewing contracts year after year,” Sommat said. “Our HR department spoke with each of them and found that their families were calling in tears, urging them to come home out of fear of possible consequences.”

The conflict has also led Pan Asia Footwear to delay plans to enter the Cambodian market, with the company now focusing on other ASEAN markets such as Malaysia. “If Cambodia isn’t ready, we will prioritise other markets,” Sommat said.

“The conflict has affected consumer sentiment in Cambodia, though border-area shoe sales in Thailand have not been significantly impacted.”

As an entrepreneur, Sommat said national sovereignty must come before business interests. “If we do not have a country, how can we have an economy?” he remarked.

KFC monitors 10 outlets in Thai-Cambodian border areas

KFC Thailand, which operates more than 1,000 outlets through three franchisees, has identified about 10 branches in border areas affected by the ongoing Thai-Cambodian clashes.

Associate Marketing Director Patra Patrasuwan said the company is closely monitoring the situation at these outlets. The impact has so far been limited, although one branch was temporarily closed for security reasons before reopening.

KFC has also stepped up support for staff at the affected outlets and delivered fried chicken to officials and evacuees in shelters in provinces including Surin, Buri Ram and Si Sa Ket. “KFC is part of the community. Whether it’s floods, earthquakes or other emergencies, the brand has a responsibility to offer support. We already have clear operational protocols for such situations,” Patra said.

Thai brands freeze marketing and ad spending

Wichit Kunkongkaphan, head of international business development (Bridge Team) at Media Intelligence Group, said the conflict has prompted Thai brands to halt all marketing and advertising targeting Cambodian consumers, both in Cambodia and in Thailand.

For clients under the agency’s management, this pause affects advertising budgets of 3–4 million baht per month, most of which is spent on television.

“Right now, our Thai brand clients operating in Cambodia have stopped everything because the situation is too sensitive. Whether spending resumes next month is difficult to predict; it depends on how the scenarios develop,” he said.

The affected brands include those in beverages, construction materials and retail aimed at attracting Cambodian tourists to Thailand. In Thailand, brands had been targeting an estimated 2.5 million Cambodian migrant workers, mainly through Khmer-language community content to encourage purchases, particularly in banking, financial services, telecommunications and mobile phones.

“Even in Thailand, brands have put marketing plans on hold,” Wichit said.

He warned that difficulties for Thai goods could open opportunities for competitors from Vietnam and China. He cited the example of Myanmar, where a ban on Thai imports enabled local brands to gain market share.

“Cambodia’s population is similar in size to a region of Thailand, such as the northeast. They like Thai products and are familiar with them through Thai content, which gave us an advantage. But now we face tougher competition, and given that many Thai brands market heavily on their ‘Thai-ness’, we need to pause. This could be an opportunity for other local or regional brands,” he said.

Border closure costs run into hundreds of millions

A source in the consumer goods sector said the closure of Thai-Cambodian border checkpoints, combined with intensified clashes, has caused initial estimated business losses in the “hundreds of millions of baht”.

Essential goods can no longer be transported by land and must instead be shipped by sea, resulting in delays and higher costs.