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Head of Myanmar’s City Mart eyes aggressive expansion, doubling outlets by 2020

YANGON — City Mart Holding, Myanmar’s largest retailer, is planning to expand aggressively as competition intensifies with the entry of foreign players into the domestic market. Win Win Tint, City Mart Holding’s managing director, revealed its plan to double the number of outlets of the flagship supermarket by 2020. The company also plans to enter e-commerce next year.

City Mart Holding now operates 38 supermarkets in the country under three brands — City Mart, Ocean and Market Place. “Though I haven’t seen rapid change in the economy in the past seven months after the Aung San Suu Kyi-led NLD government came into power, I am going to double my business,” Win said. She also said the number of convenience stores run under the City Express name will be increased to 200 from the current 60.

Win also revealed a plan to enter the e-commerce business. At the end of the first quarter next year, City Mart will launch a “click and collect” service. “We are going to launch with around 3,000 grocery items. We will not offer fresh food. We will sell daily use goods such as water, tissues and confectionery,” she said.

“We will gradually grow,” she stressed. “60% of the population has mobile phones. The banking industry is also improving, along with the penetration of mobile phones. The ecosystem for running e-commerce has improved.”

Facebook platform

Win explained that Myanmar is seeing the rise of very small vendors doing business through Facebook. “We will do our e-commerce in a more organized way,” she said. However, City Mart Holding is still searching for a proper platform to run its own business. “We have not seen a good model in the market yet,” Win said. She is closely watching the development of Facebook, however. “Facebook is launching Facebook Shop [its official platform for e-commerce]. It is also launching Facebook Shop in Thailand and Vietnam this year.”

“Facebook allows small retailers to become more organized. It could become a dominant player in Myanmar. We see that trend moving there. Facebook used to mean the internet and news here. That’s why it has become so popular and it can become a platform for all kinds of activities, including commerce,” Win said.

Win launched City Mart in 1996 with a single general merchandise store. Current annual revenue is estimated to be around $250 million. The company is the dominant player in the domestic retail market, controlling more than 60%. Win told the Nikkei Asian Review that the domestic retail market will more than quadruple by 2030.

“If we talk about the Myanmar economy, it is not doing that well recently. The new government has admitted this. External factors are also not encouraging. The world and regional economies are not doing so well,” she said. “We have not really seen a strong economic direction and we are not also seeing a strong team who will undertake that kind of economic agenda.”

Local retailers are now feeling the heat from foreign players. In October, Japanese supermarket giant Aeon opened its first store in Yangon’s North Okkalapa district. Aeon is the first foreign retailer to enter Myanmar since the 2011 transition to civilian rule.

Win said that Aeon’s debut was surprising. “If the Myanmar government opens up before they allow local companies to prepare for the competition, I think local businesses will have a huge challenge. So we are lobbying the government to create a level playing field for Myanmar companies,” she said.

 

Source: Nikkei Asian Review

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