In the last few years, Myanmar has steadily found its footing with the right economic balance and growth to position itself as an important player in Southeast Asia. It has consistently been one of the fastest-growing economies in the world over the last decade.
With an economy that is projected to grow by more than seven percent in 2020, Myanmar has vast untapped business potential. Supported by rising socio-economic improvements, it is easy to understand why global businesses are looking to this market for expansion opportunities.
Here are the five key reasons why Myanmar is attracting businesses and investors to its shores.
ANZ Research pointed out that by 2030, “half of the world’s consuming class will be within a four-hour flight from Myanmar.” As China and India continue to grow, it is ideally positioned to become a major logistics hub and a manufacturing center in the region.
In addition to China and India, Myanmar also borders Thailand, Laos and Bangladesh thus giving it over 19 trade stations along its borders. The proximity to these countries places it within reach of almost 40 percent of the world’s population, underlining its potential in becoming a regional trading hub.
To achieve this, its National Transport Master Plan is a commitment towards developing a better overall transport infrastructure including building new highways, expanding its ports, upgrading its railways as well as developing mass transit channels especially in major cities like Yangon and Mandalay.
Myanmar has moved up six places to 165th on the World Bank’s 2020 ease of doing business ranking with substantial improvements in five areas: starting a business, dealing with construction permits, registering property, protecting minority investors and enforcing contracts.
These business areas offer valuable support to overall business development while giving a boost to much-needed foreign direct investments required to improve industrial and manufacturing capabilities. They will also provide greater connectivity to the other territories within Myanmar and with neighboring markets in the region.
These business areas offer valuable support to overall business development while giving a boost to much-needed foreign direct investments required to boost industrial and manufacturing capabilities. They will also provide greater connectivity to the other territories within Myanmar and with neighboring markets in the region.
The government has also ensured the process of starting a business is easier using an online platform and by reducing business registration fees and streamlining the process of incorporation. A new credit bureau helps to improve the credit information system while trading across borders has become easier and faster for importers and exporters.
From May 2018, the government has allowed foreign businesses and joint ventures to carry out businesses in the retail and wholesale sectors. This will further encourage more global brands and other Asian brands to access the market.
Since Myanmar opened its market, progress has been swift. The World Bank’s Myanmar Economic Monitor Report noted that medium-term growth was driven by a pick-up in foreign and domestic investment responding to recent policy measures such as the opening of retail and wholesale sectors, services sector liberalization and loosening restrictions on foreign bank lending.
With a population exceeding 53 million, Myanmar is the twelfth largest Asian country by population and fifth largest in ASEAN. Greater disposable incomes, particularly among Myanmar’s new generation of tech-savvy millennials, are driving consumer interest and awareness for renowned multinational brands.
As its telecommunications infrastructure expands by the day marked by the increasing presence of multinational mobile communications players, connectivity and internet access has also skyrocketed by leaps and bounds.
Presently at around 44 percent mobile penetration rate, mobile users in Myanmar are among the most engaged within Southeast Asia. Combined with the emergence of a larger middle-class segment and the influence of foreign investments, Myanmar’s consumer demographic is quickly becoming an attractive market for businesses.
The market has seen positive changes in the last two years including growth in domestic consumption, demand for high-quality medicines and consumer products, expansion of private hospitals and increased focus on healthcare by the government.
Research showed that pharmaceutical expenditure in Myanmar will continue to grow at around twelve percent per annum and the market is expected to exceed USD 1.12 billion by 2023. It is witnessing rising demand for better quality healthcare services driven by an increase in disposable income, higher health awareness and a growing middle class.
The market remains largely untapped with substantial opportunities for foreign investors with the Ministry of Health and Sports aiming to implement a universal health coverage program nationwide by 2030. Also, the emergence of chain pharmacies and their following a Good Pharmacy Practice bode well for Myanmar, particularly for consumers in the market.
Myanmar’s consumers are not accustomed to foreign brands as there are already a lot of local brands in the market. While there are ample opportunities for international brands and multinational companies, businesses must consider if the market is ready for a specific product category. Consumers in Myanmar do not yet have a strong preference for any specific brands and have proven that they are not easily swayed by new brands in the market.
With the population’s income not growing substantially in recent times, staying in touch with what the population can realistically afford and what they want to spend their hard-earned money on is vital. Building your brand in Myanmar is a time-consuming process and brand owners need to be prepared to build the brand from zero and invest heavily in promotion and sampling activities.
You can also read more tips on entering Myanmar’s retail market here.
Increased consumer demand, greater investor confidence complemented by a friendlier business environment have propelled Myanmar into becoming one of the fastest-growing economies in the world. For a more detailed perspective on its market potential and business opportunities, speak with an established business partner like DKSH who has been in Myanmar for more than 25 years. Read more on the DKSH success stories and how we have helped other businesses across Asia and in Myanmar.
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