As global brands look to diversify their supply chains, Cambodia is quietly emerging as one of Southeast Asia’s most promising manufacturing destinations. Once seen primarily as a low-cost garment hub, Cambodia has expanded its capabilities, upgraded infrastructure, and attracted billions in foreign investment, positioning itself as a viable choice for companies seeking reliable, export-ready production.
A Manufacturing Base Built for Apparel and Beyond
Cambodia’s manufacturing sector is deeply rooted in textile and garment production. The country has become a global leader in cut and sew apparel, travel goods, footwear, and accessories, supported by a labor force experienced in soft goods and basic assembly. In fact, apparel and footwear account for over 70% of Cambodia’s total exports, with strong compliance with U.S. and EU regulations.
What sets Cambodia apart is its production scale and specialization. Many factories are optimized for mid to large order runs and are familiar with international retail quality standards. From basic cotton t-shirts to technical outdoor gear and structured travel bags, Cambodia’s facilities can handle a surprising range of product types with consistency.
While apparel and accessories are a major manufacturing strength, Cambodia is rapidly expanding its production capabilities for many other product types that require injection molding processes.
Labor Cost Advantage with Export-Ready Capacity
One of Cambodia’s most appealing traits for international brands is its competitive labor cost. Factory wages are among the lowest in the region, helping brands improve margin without compromising on factory conditions. Cambodia’s factories are also export-oriented, with over 80% of production made for international markets, meaning they have the systems, documentation, and logistics in place to ship to the U.S. with relative ease.
In recent years, Chinese investment in Cambodian manufacturing has exceeded $9 billion dollars, with more than 1,200 factories now operating nationwide. These facilities are not only bringing in capital, but also equipment, training, and upgraded management processes that have elevated Cambodia’s manufacturing quality.
Trade-Friendly, Digitally Advancing, and Transparent
Cambodia’s trade relationships support its status as a viable sourcing location. It benefits from preferential access to U.S. and European markets for key product categories like travel goods and garments through various tariff reduction programs (although this is subject to change under the current Trump administration).
The government has also taken strides to improve transparency and digitize trade processes. Platforms like the Cambodia Trade Portal help companies navigate regulations, tariffs, and customs clearance, and provide access to licensed manufacturers across product sectors.
Although infrastructure still lags behind regional leaders, improvements to roads, ports, and industrial zones, especially near Phnom Penh and Sihanoukville, are reducing friction in the supply chain.
Compliance and Certifications Are on the Rise
Cambodia’s major garment factories have significantly improved in areas of compliance and sustainability. Many producers are part of Better Factories Cambodia, an International Labour Organization initiative that monitors factory conditions and provides transparent performance reports. Some facilities have achieved certifications like WRAP, ISO, and SA8000, offering peace of mind to U.S. brands prioritizing ethical sourcing.
For companies committed to responsible manufacturing, Cambodia offers a growing ecosystem of compliant partners along with access to third-party quality control and audit services.
A Sourcing Opportunity with Room to Grow
While Cambodia still faces challenges, such as limited raw materials and longer lead times for certain categories, it offers compelling opportunities for brands that plan ahead. It is especially attractive for:
- Brands producing soft goods with consistent specs and quality expectations
- Companies seeking cost-effective diversification from China
- Product developers looking for mid volume production runs without extremely high minimum order requirements
- U.S. importers who value factory responsiveness and export readiness
As more brands reconsider their global sourcing mix, Cambodia stands out as a flexible, affordable, and increasingly capable option.
Interested in exploring Cambodian factories?
Klugonyx can help you identify the right fit, manage quality, and build a scalable sourcing strategy in Cambodia and beyond.
