More activity expected in Myanmar's wholesale and retail market this year
News Type: Marketing News
Thiri Lu/The Myanmar Times
Industry watchers are expecting the wider presence of foreign supermarkets and retail malls in Myanmar in the coming year.
“The market has been developing quickly. So, I think that within the next one or two years the wholesale and retail market landscape will expand,’’ said U Myo Htwe, Managing Director of Pro 1 Global Company, a retail joint venture between local and Thai investors.
“Most foreign investors are focusing on the wholesale area because this takes less time and risk compared to retail,” said U Myo Htwe.
But this will quickly change. “Over the next two years, we will see much more activity from the retail players in the domestic market, after the foreign investors have studied the conditions and trends,” U Myo Min Aung, a local businessmen in the retail and wholesale industry.
Also, in the retail space, foreign businesses and joint ventures are not allowed to operate mini-markets, convenience stores and any retail distribution where the floor area is smaller than 929 square metres.
Modern retail stores currently account for approximately 10 percent of the country’s retail market and this is expected to increase to a 25pc by 2020, according to EuroCham’s Consumer Goods Guide 2020.
Supermarkets and convenience stores are increasingly being established in the larger cities of Myanmar to cater to changing consumer behaviours and preferences. Out of approximately 250,000 retail outlets in Myanmar, grocery, convenience, fabric, pharmacy and fashion are the top five outlet categories, together accounting for 45pc of total retail stores.
The guide also revealed that both local and international retailers are optimistic about future growth potential.
The Ministry of Commerce permitted 34 foreign retail and wholesale businesses to operate in the domestic market between July 2018 and December 2019. The ministry also permitted 27 joint ventures of retail and wholesale businesses between foreigners and citizens.
The government first opened up the wholesale and retail industry to foreign investors in May 2018, permitting fully foreign-owned companies as well as joint ventures between international and domestic investors to carry out retail and wholesale businesses in Myanmar.
The liberalisation of the sector is aimed at attracting international investors and brands to do business in the country. Since then foreign retailers and wholesalers of consumer goods, foodstuff, household products, pharmaceutical products, machinery, construction material, agricultural products and electronics have entered the market.
These include MyCare Unicharm from Thailand, DKSH from Thailand, Toyota Tsusho from Japan, Unilever from Netherlands, ADM and Frontir from the US, and Nestle from Switzerland.
Among 34 wholly foreign retail and wholesale providers, 29 providers operate wholesale, four providers are to operate both wholesale and retail operations and just one is in retail. There are also 27 joint venture between foreigners and citizens.
“The wholly foreign-owned players are now taking time to build up their businesses. Also, foreign joint ventures are adding resources to domestic partners to improve their existing setups,” U Myo Htwe said.
As a whole, the liberalisation of retail and wholesale will have a good impact on the economy by bringing more competition, choices and affordability to local consumers, said U Myo Min Aung.
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