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Retailers eye Myanmar expansion

News, 09 December 2016
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YANGON: There is a degree of uncertainty about the business environment in Myanmar but a new survey shows most local and international firms are planning to expand in the coming year, with the retail sector holding significant potential.

A new investment law aims to make it simpler to invest in the country, but the details have yet to be finalised.

Despite that, when the Roland Berger consultancy surveyed almost 200 senior executives at both local and international companies operating in the country, it found that 70% of local businesses and 80% of international ones intended to grow their operations over the next 12 months.

"I don't know any other country in the world right now where you'd get that statistic," said Thomas Klotz, managing partner for Roland Berger in Southeast Asia. "No-one is really scaling back," he added, "[although] some are in the waiting [period]."

There is "huge potential" in the retail sector, according to the Myanmar Times. And one of the country's largest modern retailers, City Mart, has announced plans to double the number of supermarkets it operates, treble the number of convenience stores and to enter the e-commerce sector with a click-and-collect service.

"If we look at the distribution of basic commodities, such as soap and detergent, the distribution may be 100%," Win Win Tint, managing director of City Mart Holding, told the Nikkei Asian Review.

"But for more advanced products like [fabric] softener and [hair] conditioner, distribution is limited to big cities -- maybe only 20% of the country. There is so much opportunity to grow."

The main hurdles she could see were finding sites to develop or convert into shops – "the cost is very high" – and finding a suitable platform for its e-commerce business that could withstand the emerging challenge of Facebook Shop.

More generally, the Roland Berger survey identified a lack of qualified staff as a major impediment to business growth.

Data sourced from Myanmar Times, Nikkei Asian Review; additional content by Warc staff

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