YANGON — Convenience stores have been sprouting up in Myanmar since the junta made way for a civilian government in 2011, replacing roadside mom-and-pop shops.
Under military rule, only domestic companies were allowed to operate convenience stores due to a government ban on foreign investment in the distribution sector, apart from some large-scale commercial facilities.
Last August, however, the government’s Myanmar Investment Commission announced it was cutting the list of regulated business types by half from the previous 200 or so. Retail and wholesaling were among those removed from the list, formally eliminating restrictions on foreign capital in the distribution sector.
But the Ministry of Commerce has yet to issue any investment permits to individual foreign companies.
“The government has not been able to open up the market due to strong backlash from within the country,” an official at a law firm said.
Room for growth
On the other hand, foreign distributors are allowed to enter special economic zones without a ministry permit. One Myanmar company is planning to develop a commercial facility near an industrial park set to open next summer in the Thilawa special economic zone, southeast of the commercial hub of Yangon.
If the opening of the special economic zone promotes deregulation, it could provide opportunities for foreign companies to open convenience stores in Myanmar. The country has roughly 250,000 people per convenience store, a rate 30 to 40 times higher than that of Singapore, Thailand and Malaysia.
City Mart Holding, Myanmar’s largest retailer, recently opened a City Express convenience store in downtown Yangon with a floor space of about 50 sq. meters. The store sells toothpaste, cosmetics, newspapers and fashion magazines, as well as drinks, instant noodles and ready-to-eat snacks like chicken nuggets. Most of these items are made in Thailand and South Korea, but some are Japanese brands.
Win Win Tint, managing director of City Mart Holding, says she has been regularly visiting Japan since the 2000s to study the advanced retailing industry, including how to display products and create services.
City Mart was established in 1996 and has a variety of subsidiaries ranging from general merchandise stores to supermarkets to shopping centers. The company opened its first City Express in 2012 and now has more than 40 chain stores. Tint says that she aims to have 200 City Express locations by 2018.
Major local beverage distributor Capital Diamond Star Group operates the Grab & Go convenience store chain, while retailer TMW Enterprise runs convenience stores under the ABC brand.
City Express and Grab & Go are open all night, whereas many other stores in Yangon close at 9 p.m.
It is estimated that Myanmar has about 200 convenience stores, of which 90% are in Yangon. If realized, City Mart’s plans will more than double the number within three years.
In November 2014, TMW Enterprise opened its first ABC convenience store outside Yangon. The company now operates five ABC stores in Myanmar’s second largest city, Mandalay.
Capital Diamond Star Group, which had some 40 Grab & Go stores at the end of last year, has moved into the capital, Naypyitaw. The company also plans to set up five stores in Mandalay.
Source: Nikkei Asian Review