Burma - Consumer GoodsBurma - Consumer Goods
Overview
As Myanmar’s market opens up, foreign brands are rapidly entering the country, particularly since sanctions were lifted by the EU in 2013 and the United States in 2016. Myanmar does not currently have a strong base in consumer goods production so it imports the majority of its consumer goods from neighboring countries such as Malaysia, Thailand, China, Singapore and India.
The middle class population and their incomes have been rapidly increasing during the last ten years. According to McKinsey Global Institute’s report from June 2013, Myanmar’s consuming class (or middle class) will reach 19 million people by 2030 from 2.5 million in 2010. According to EuroCham Myanmar “Consumer Goods Guide 2018,” per capita income in Yangon is between $1,700 and $3,000 per month. The country now offers a growing market for foreign consumer goods companies looking to diversify their market portfolio. McKinsey forecasts that spending on consumer products in Myanmar could grow to $100 billion by 2030 from current spending of $35 billion.
Significant opportunities exist for American companies in Myanmar’s consumer goods market. Consumer goods such as personal care, home care, foods, dairy products, non-alcoholic and alcoholic beverages, bags, watches, clothes, accessories, electronic appliances, cosmetics, kitchenware, baby products, perfumery, toiletries, dry goods, healthcare products, sporting goods, processed and packaged goods, soft drinks, chocolate, coffee mix, auto parts and footwear are all popular items among shoppers.
The Myanmar retail sector has seen a large number of foreign consumer brands enter the country and sold in stores over the past four years. The value of retail sector in Myanmar is between $10 and $12 billion in 2018. Consumer buying power will continue to be concentrated in Yangon and Mandalay.
Leading Sub-Sectors
Fast Moving Consumer Goods (FMCG): According to Nielsen, Myanmar’s FMCG sector has expanded by 15 percent since 2014. Close to half of the typical consumer’s monthly expenditure (47 percent) is spent on necessities such as food and groceries, household products and personal care products. Myanmar’s consumer class is becoming more and more brand-conscious. Foreign brands and products have become a popular status symbol among end-consumers in Myanmar. As market demand and purchasing power grow, consumers will continue to expect more brand options and demand more quality products, especially brands and products from western countries.
Retail: Myanmar’s underdeveloped retail sector continues to be an opportunity for U.S. firms. Myanmar's retail market is estimated to be around 15 percent of the country's GDP. There is currently one convenience store for every 250,000 people. There is huge room to expand in this market outreach compared to neighboring countries such as Thailand, Malaysia and Singapore. According to McKinsey Global Institute 2013, consumer spending could triple from $35 billion to $100 billion by 2030.
The retail sector ratio is 90:10 where 90 percent accounts for traditional trade. However, modern trade is rapidly growing in Myanmar with the number of modern retail outlets reaching 700 in 2015-2016, according to the Myanmar Retail Association. Moreover, 90 percent of the households still go to traditional markets to buy fresh meat and vegetables. However, as lifestyles and trends are changing rapidly, consumers choose to visit traditional markets less frequently and instead, visit supermarkets and convenience stores. There are around 250,000 total retail stores in Myanmar. According to City Mart Holding Limited (CMHL), grocery, convenience, fabric, pharmacy, and fashion are the top five outlet categories accounting for 45 percent of total retail outlets.
According to the Colliers International, Yangon's total retail gross leasable area was estimated to be around 150,000 sq. meters in 2013-14. This total includes all types of retail formats such as shopping malls, hypermarkets, departmental stores, convenience stores and residential and commercial shops. At the end of 2018, Yangon’s retail space reached the 400,000 square meters mark, up by 17 percent quarter on quarter and 24 percentyear on year. This includes the launch of new malls such as St. John Mall and Junction City, Kantharyar Shopping Mall, and Space. In 2019, Yangon is projected to have an additional 150,700 sq meters (1.6 million square feet) of leasable space which is the highest in Myanmar to date. The most remarkable developments include the second segment of The Central Boulevard (Phase 1) by Marga Landmark, Fortune Plaza (Phase 1) by Excellent Fortune Development Group, and the Yadanar Mall (Time City) by Crown Advanced Construction Co., Ltd. Together, these projects represent an additional leasable space of almost 58,000 square meters (624,000 square feet).
Convenience stores and supermarkets have been rapidly expanding in the larger cities in Myanmar in recent years. The consumer behaviors and purchasing power continue to grow with the positive outlook for retailers are optimistic and the sector is set to experience with a constant growth. Popular retailers in Myanmar are Asia Light, ABC Convenience Stores (100 outlets in Yangon in all key strategic locations and townships in Yangon) by Myanmar Indo Best, Grab & Go (300 outlets) by Capital Diamond Star, City Mart Supermarket, Marketplace and City Express Convenience Stores (70 outlets) by City Mart, One Stop Mart (100 outlets) by One Stop, Gamone Pwint Departmental Stores, Gandamar Wholesale, Market Place Supermarket, Orange Supermarkets, Ocean Super Center, Ruby Mart Supermarkets, Star Mart Supermarkets, GQ Convenience Stores, KumuDra Convenience Store, Shwe Paline Mini Mart, Pyae Wa General Stores and Union Mini Mart.
Top shopping centers are St. John Mall, Junction Square, Taw Win Centre, Ocean Super Market, Myanmar Plaza, Maw Tin Center, Hledan Center, Sein Gar Har, Culture Valley Yangon, United Living Mall, Gamone Pwint, Yuzana Plaza, Ruby Mart, Parkson, Super One, Capital Hypermarket, Junction City and Sule Square.
Better quality retail malls opened in 2018 meeting international standards and demand by foreign F&B chains. The popular F&B chains mostly seen in modern malls are KFC, Swensen’s, Pizza Hut, The Pizza Company, Gloria Jean’s Coffee, Lotteria, Harley’s, Thai Express, Freshness Burger, Black Canyon, Ayam Penyet, Chatime, Chewy Junior, Frolick, The Manhattan Fish Market, Burger King, Breadtalk and Yakun.
Japan’s popular store chains have already entered Myanmar’s retail market. Japan's popular discount store chain, Daiso launched stores in Yangon in 2012. Daiso now has discount stores in almost every modern mall in Yangon. Japanese retail giant Aeon supermarket chain is preparing to open its first outlet in Yangon. Also, Japanese convenience store operators Lawson and MiniStop are considering forays into the country.
The Ministry of Commerce issued Notification 25/2018 in May 2018, stating that 100 percent foreign investment and joint ventures with foreign firms are now permitted in retail and wholesale trading in Myanmar. This is a positive transformation allowing international wholesalers and retail giants to be part of the economic transition in the country. The government opening the door to foreign players in retail and wholesale sectors will make the market more competitive and offer citizens more choices of international brands and products. Although the Ministry of Commerce is attempting to liberalize its economy through Notification 25/2018, industry stakeholders are waiting for clarifications, including a list of excluded sectors. According to the Notification, the capital requirements to operate retail and wholesale are as follows:
| Wholesale | 100 percent foreign owned | $5 million (excluding the value of the goods to be traded and the land lease rent) |
| Joint Venture Companies (at least 20 percent of the equity is held by Myanmar citizen(s)) | $2 million (excluding the value of the goods to be traded and the land lease rent). | |
| Retail | 100 percent foreign owned | $3 million (excluding the value of the goods to be traded and the land lease rent) |
| Joint Venture Companies (at least 20 percent of the equity is held by Myanmar citizen(s)) | $700,000 (excluding the value of the goods to be traded and the land lease rent) |
According to the Notification, the minimum floor area for retail shops, mini-market and convenient stores is 929 sq. meters. The details about the company registration process and other requirements can be found at Retail And Wholesale Trading In Myanmar Permitted For Foreign Investors by Conventus Law. For any interested U.S. companies, please consult with law firms established in Myanmar to get clear guidance: American Chamber of Commerce Myanmar and AMCHAM’s member list.
Opportunities
Foreign brands such as Nestle, Tata, Kellogg's, P&G, Unilever, Kraft, Heineken, Henkel, Heinz, Pfizer, Johnson & Johnson, Pepsi, Coca-Cola, Britannia, DuPont, Nike, Addidas, Armani Exchange, Michael Kors, Hugo Boss, Furla and many others are available in Myanmar.
Local players are eager to partner with foreign firms. For example, Myanmar FMCG company, Capital Diamond Star Group Limited (CDSG) and Mitsubishi Corporation formed a joint venture, Lluvia Limited, to engage in food manufacturing and distribution businesses throughout Myanmar and regionally. Asahi Group is to partner with Myanmar’s Loi Hein Company to form a major new soft-drinks company in Myanmar. Colgate-Palmolive Co. acquired Laser Brand Toothpaste from Shwe Ayar Nadi Co., Ltd. for approximately $100 million. Swiss giant Nestle partnered with a local distribution company to distribute its made-in-Myanmar coffee, dairy and chocolate products.
There are great market opportunities available for American companies which make grocery products, personal care products, household products, processed foods and alcoholic and non-alcoholic drinks. U.S. firms may need to be more flexible with their pricing strategy for the Myanmar market. Demand for organic food and products is also increasing among the health conscious and higher income consumer segments. Currently, the majority of FMCG imports are from Thailand and China with price points that are affordable to the middle class population. City Mart, the biggest local supermarket chain, is currently importing apples and cherries from the United States and beef and diary products from Australia.
Web Resources
Department of Food and Drug Administration (http://www.fdamyanmar.gov.mm/)
Ministry of Commerce (http://www.commerce.gov.mm/en)
Myanmar Consumers Union (http://myanmarconsumersunion.org/)
Myanmar Retailers Association (MMRA) (http://mramyanmar.com/)
Contact Information
U.S. Commercial Service Myanmar
Khin Wai Yan Soe
Commercial Assistant
Email: WaiYan.Soe@trade.gov
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