MYANMAR RETAILERS, riding on an economic boost, anticipate fiercer competition from foreign players once restrictions are lifted.
Win Win Tint, president of Myanmar Retailers Association and managing director of City Mart Holdings, said that Myanmar may allow the entry of international retail chains in the near future, driven by local demands.
“New retail channels such as e-commerce are emerging and we also expect the arrival of foreign retail chains. So, retailers would need to adopt a different strategy, upgrade their service and improve efficiency,” she said.
As of yesterday, there were about 300,000 retailers in Myanmar. Modern retail trade currently accounts for about 10 per cent of fast-moving consumer goods (FMCG) sales and it is still at the early development stage. Established formats in modern retail are department stores, hypermarkets and supermarkets. In three years, convenience stores are also sprouting around Yangon.
Myanmar’s retail market has been expanding fast since the country opened its doors in 2012. The economy in the past four years expanded by over 7 per cent per annum. According to the United Nations, Myanmar’s per-capita income rose from $799.5 in 2010 to $1,125.9 in 2012. World Bank data showed that per-capita income was $1,197.95 in 2014. Retail business has expanded accordingly, with average annual growth of between 7-15 per cent in the past four years.
“We see continued increase in consumer expectations due to rising income, increased ability to travel overseas and accessibility to Internet,” Win Win Tint said.
Yangon has witnessed the fastest growth in the retail industry. With supermarkets in shopping malls being geared towards affluent consumers, traditional retailers such as small shops, local markets and kiosks remain popular among locals.
At present, City Mart – the nation’s largest retailer – imports about 70 per cent of its products from Thailand. Confectionery, snacks and beverages are among the top 10 import items. Though consumer goods are most sought after, Win Win Tint anticipates greater demand for products that offer convenience, like ready-to-eat meals, thanks to rapid urbanisation and lifestyle changes.
“A growing urban population will drive retail demand. The number of supermarkets and convenience stores are also on the rise, particularly in key residential communities and densely populated zones,” said Yinn Mar Nyo, sales and marketing director for the Sule Square Mall and Office Tower, set to open early next year.
Also, she said, many people are becoming addicted to international brands and foresees top-tier retail projects in Yangon in a few years.
“Large-scale and better-quality retail developments are soon to take shape in Yangon, as the city transforms into a modern-day metropolis. The advent of large-scale and upgraded shopping centres will bring further growth in Yangon’s evolving retail market. Similarly, as lifestyle advances, and it also improves buying behaviours,” she said.
Foreign or local, the retailers will have to brace for challenges. According to the City Mart’s owner, the major challenges to the retail business include finance, infrastructure and skill shortage.
“Many businesses are challenged by the high cost of land and high cost of doing business in recent years. Local businesses have very limited financing for expansion and a shortage of qualified workforce. As Myanmar is in the early stage of development, infrastructure is still poor for the development of retail business such as poor connectivity [roads, communication] and electricity,” Win Win Tint said.
She added that most retailer have installed full-scale backup generators to cope with power shortage. She stressed the importance of supply-chain management in the development of retail business, but admitted that the network is not well-established yet and that only a few retailers have a nationwide selling system.