Myanmar as target for international expansion

Global Merchandising Most people in Myanmar shop locally. The country's population is predominantly rural, and people come to regional towns in order to shop for any goods that are not related to daily life (i.e. not food). However, there is an emerging retail culture in the larger cities. This goes along with the increasing wealthy in Myanmar. The real estate sector has benefitted more than most from the economic development the country has experienced in recent years, and this is transforming the retail landscape (VDB-Loi, 2017).

Malls are being developed in the country, in the major cities, and these are going to allow Myanmar to follow the merchandising patterns already seen in Thailand, Vietnam and other Southeast Asian nations that have gone through this stage of development in recent years. The pattern shift is notable, because it highlights central downtown shopping, but with a retail model that is better suited to international businesses.

The predominant local merchandising model is ill-suited to international companies, but a model based around shopping malls in major cities will be familiar to any company that already has experience in Southeast Asia. Drivers of Shopping Experiences The mall experience is relatively new, and there are two driving factors for its ascendance.

Part of the mall factor is really the "if you build it they will come" sort of logic, where developers are creating these experiences even before the market is ready, in order to position themselves and carve out their swath of the retail landscape. The first type of customer is the repat, a Burmese from Singapore or Australia typically, or maybe the US, who has experience in a Western-style shopping environment.

Back home they are often entrepreneurs, and they are the vanguard of the emerging middle and upper-middle class that can afford to shop in this sort of environment. They are joined by a second group, the wealthy locals, who were raised in Myanmar but for one reason or another have found themselves in the upper class of a society at a time when wealth accumulation is accelerating. All told, these two groups are the early adopters of this new retail model.

The new retail landscape has also brought new players to the market. Civil life five or six years ago saw little shopping, an economy almost entirely controlled by the military junta, and in many areas there were things like curfews. Mom-and-pop shops that closed at dusk were the retail environment. So the changes that the country is seeing are quite astonishing, when put in that context. International companies – the first were cell phone companies but since then others have joined – have started to enter the market.

The malls are the key to international companies entering the market, though many consumer goods companies are starting to explore distribution through the existing retail channels. Many other companies are using stores that they own locally as their means of entering the market, particularly companies that serve more the high-end of the market. These new retailers are absolutely shifting the retail environment, because they bring with them more modern retailing and merchandising practices.

Mom and pop stores lack innovation, and they succeed primarily because in the environment prior there were no alternatives. But the new players are sophisticated – they use technology and data, and they bring with them knowledge acquired in other countries. As such, they are powerful, disruptive competitors. There is truly an opportunity for foreign companies to outcompete the locals, and this is creating a shift, starting in the city centers, but doubtless to spread throughout the country, given enough time.

Other Changes to the Retail Environment The consumers of the malls and foreign shops tend to be either repats or rich locals, both groups having experience shopping in those environments. The population of the country is growing, but the more important factor is that the number of wealthy Burmese is growing. This creates opportunity for more unique shops to open up. The increase in wealth is very much a bigger story for the retail environment, because that is what is driving the changes, and the modernization of the retail environment.

Yet, there has not been a strong online retail push in Myanmar to this point. That is probably the next frontier for retailers in the country. The other thing that will probably occur is the emergence of local fashion companies. At this point, there are no major or even minor fashion companies. There are some producers of low end goods sold under other brands.

But with people returning from the West with talent, and with the development of an actual market, there is an opportunity for someone to take the lead in developing local fashion. While it has not happened yet, the pattern is that there will be local companies that emerge to compete with international brands. These companies will be able to cater to local tastes more directly, but they.