Daw Win Win Tint: Interview
What factors do investors need to consider when doing business in retail in Myanmar?
DAW WIN WIN TINT: There are three essential factors that investors need to consider. First, the investor needs to understand and become familiar with the country’s regulations and procedures related to the retail and wholesale sector. Second, it is important for them to identify market dynamics and plan accordingly. For instance, the supply chain is still in the early stages, and even though it is developing at a great pace, this forces investors to put extra effort and resources into infrastructure to start their businesses.
Lastly, investors need long-term strategies, as Myanmar’s economy still has a lot of room for improvement. This also means there are big opportunities for growth. A long-term plan is important because the country’s main challenges cannot be overcome in the short term. A few of the challenges include a lack of infrastructure, a comparably higher cost of doing business and a strain on the currency. Only companies with long-term perspectives have the endurance to withstand these challenges and benefit once they are overcome.
How do you assess the growth potential of convenience stores, and what are the bottlenecks retailers in this line of business might face?
WIN WIN TINT: The main retailers in the country are very keen to expand the convenience store business model. While this transformation can primarily be seen in the bigger cities, like Yangon and Mandalay, expansion efforts are also gaining momentum in other parts of the country. Consumers are becoming more aware of the advantages of the convenience store model, namely the standardised product offerings.
The main bottleneck in this business model is the lack of supply chain infrastructure, which sometimes results in the low consistency of supplies or unavailability of some products. Additionally, in terms of the supply network, it is still primarily concentrated in the main cities of Myanmar, so retailers that want to expand in other areas of the country are forced to invest in and rely on their own supply chain network, which is a very costly undertaking.
Where does Myanmar stand in the global shift away from cash to card payments?
WIN WIN TINT: In 2015 cash was the only method of payment available in the market. Nowadays, card payment comprises over 5% of income in the retail industry. While this number is significantly lower than more developed markets, it shows that consumers in Myanmar are looking for the same thing as others around the world when making purchases, which is convenience. With the increased availability of more convenient payment tools in the market, consumers will eventually shift towards this method. Banks are promoting the use of cards, and the government is encouraging digital payments; all of this will facilitate a faster transition away from cash payment.
To what extent is there opportunity for further development in the sector, and what can be done to encourage foreign investment?
WIN WIN TINT: Myanmar’s retail sector is in the early stages of its development, but it will continue to grow alongside a rising middle-class population. Given that Myanmar has a population of 54m people, one can find opportunities everywhere within the retail sector. This will be the case as long as the economy maintains its pace of growth. Right now the sector in Myanmar is in a position where the decisions made today will lead the practices of tomorrow. Therefore, there is the general consensus among key industry players to encourage responsible retail practices. As foreign investors are now able to participate in the local retail and wholesale market, it is important that businesses refrain from any actions that could negatively impact the value of the sector, making it less attractive to investors.
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