Myanmar’s thriving economy has transformed it into a hot spot for Asian and international companies seeking to exploit the potential of the country.
FMCG companies are the most excited to tap into the country’s young population and rising disposable incomes. According to Nielsen, the FMCG sector has expanded 15% in the past four years and close to half of the typical Myanmar consumer’s monthly expenditure (47%) is spent on necessities such as food and groceries, household products and personal care products.
It comes as no surprise that brands are quickly stepping in to reach the Burmese consumer. Carlsberg recently expanded into the market in May, investing US$75 million into its newly opened brewery, while Heineken recently opened its US$60 million facility in Yangon on 12 July.
Singaporean brands and agencies are no different. Agencies and companies that have made the move to open in Myanmar say that Singapore enjoys a positive reputation in the country. With strong bilateral ties, the people of Myanmar broadly view Singapore brands as being trustworthy.
Such respectability may signal a tremendous advantage for Singapore brands as word-of-mouth reviews serve as one of the key drivers for purchasing decisions, according to a Nielsen report.
Singapore brands with a presence in Myanmar span from banks to telcos to retailers, and include names such as DBS Bank, OCBC Bank and UOB; telcos StarHub and Singtel; and retailers such as Charles & Keith, Iora and Heatwave, among many others.
Industry players who have set up shop in Yangon discuss Myanmar’s increasing appeal and how Singapore brands are strategically placed to succeed in ASEAN’s newest market.
A strategic move for Singaporean brands
Donna Garcia, associate director and head of Rice Communications Myanmar, said that as a long-standing trade partner of Myanmar, Singapore rose to become the top investor in Myanmar last year, contributing more than half (US$4.3 billion) of the US$8.1 billion in foreign direct investment.
The boutique communications agency, headquartered in Singapore, launched operations in Myanmar in January this year.
With a team based in Yangon, Rice Communications Myanmar started its operations with clients such as Hughes and Bosch. It aims to deliver creative and communications support to multinational clients and local companies.
Actively building its presence and network in the market, Rice hosted two events in Yangon: a dialogue with bloggers and technology journalists on digital PR, and a training session for PR and marketing executives in the hospitality industry.
Garcia commented that Singapore brands have an advantage in terms of market access, knowledge, as well as connections, in view of the strong ties between the two countries. Singapore brands also enjoy a positive reputation in Myanmar and are perceived to be of high quality.
Another agency that recently expanded in Myanmar is creative agency Blak Labs. It is the local agency’s first office outside of Singapore as it experiments with building its business in a new market.
Charlie Blower, CEO of Blak Labs, also noted that “Singapore is held in high regard by the Myanmar people. Bilateral ties are strong and Singaporean companies are perceived to be trustworthy, transparent and reputable”.
Lawrence Chong, CEO of Consulus, a design consultancy with an outfit in Myanmar, agreed, saying it was important to make an early entry into the market to leverage that trust.
International brands raising Myanmar’s profile
According to Garcia, Myanmar has also branded itself strategically to attract and pique the interest of international giants.
She explained: “If you look at this from a country branding perspective, Myanmar has done a stellar job raising its international profile by taking up leadership positions in the ASEAN, for example, and hosting some high-profile regional business and sporting events. The government’s economic reforms agenda and commitment to liberalise and engage with the global business community also play out well to Myanmar’s advantage.”
Brands also have a part to play in boosting the Myanmar brand. Garcia added: “I believe brands, too, have contributed immensely in mobilising global awareness and interest for Myanmar.”
Garcia cited the likes of Coca-Cola, BMW, Hilton, Unilever and Ooredoo, which have all helped shape a positive impression of the country and driven media coverage. These efforts have made information and insights on Myanmar more accessible and richer than ever before, thus boosting investors’ confidence and subsequent business expansion.
Myanmar’s thirst for a spotlight on the international stage is backed by its booming economy, as the country continues to strive for growth.
Garcia said: “From a numbers perspective, foreign direct investments into Myanmar reached over US$8 billion and real annual GDP grew 7.8% last year.
“Myanmar aims to become a middle-income country by 2030, and with that comes opportunities from a booming consumer market and rapid urbanisation.
“Myanmar has always been on the radar of companies seeking growth in new frontiers, and these positive economic indicators reinforce the market’s potential and increase the attraction of Myanmar as an investment destination.”
As the nation continues to prosper, international brands are likely to continue flooding the market to meet the country’s growing demand for consumer goods.
Blower added: “Economists predict that if Myanmar achieves 7% growth a year, it should become a middle-income nation and triple its per capita income by 2030. The country’s potential as a ‘future market’ for consumer goods is phenomenal. It’s little wonder the world’s top brands are jostling to gain a first-mover advantage.”
Navigating the Myanmar market entails the need to understand not only its business climate, but also its political landscape.
Read also: Myanmar: Key challenges ahead
Blower said that even though Singapore brands and businesses are already tapping into the opportunities there – transferring skills, knowledge and experience accumulated over the past 50 years – brands need to be flexible when it comes to expanding into the young republic.
“It can be challenging. In Myanmar, rules can be changed, even after a deal has been made.”
Chong explained that this year, the country’s election year, in particular, is a crucial one for Myanmar as some international investors are still watching to see how the Myanmar government continues on the path to reform.
He advised: “ While quite a few Singapore brands are rushing in, there are some who are taking a wait-and-see approach because like any other emerging markets, you can imagine the usual hiccups. So the opportunity is there, but proceed with caution.”