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Myanmar: the next advertising frontier?

Following its 2010 reforms, Myanmar has been opening up at breakneck speed, with investors, businesses and policy makers flocking to the resource-rich region to look for opportunities in sectors such as tourism, energy, mining and telecommunications.

International Monetary Fund executive Meral Karasulu told local papers that after a recent trip to Myanmar, it had high-growth potential and could become the next economic frontier in Asia, if it managed to turn its “rich natural resources, young labour force and proximity to some of the most dynamic economies in the world to its advantage”.

Banks and Japanese firms such as Hitachi, Toshiba and Mitsui are on its rapidly growing list of recent visitors.

More importantly, prior to the reforms, Myanmar was notorious for its heavy hand with media censorship, with major events often swept under the rug, leaving an information vacuum in the country. A CIA report on Myanmar in 2009 painted a bleak media landscape: the government controlled all domestic broadcast media that consisted of two state-controlled television stations (one of which was run by the armed forces) and a third station being a joint state-private venture.

For radio, all seven of its stations were either state-owned or joint state-private ventures.

Facebook’s analytics site Socialbakers also recorded no Facebook penetration in Myanmar.

However, this looks set to change dramatically as the government mulls over a new media law to remove this censorship, said an AFP report.

As a sign of goodwill to this development, media coverage has been allowed for democracy symbol Aung San Suu Kyi, previously given no media exposure in the local press, with a weekly covering her standing next to president Thein Sein, who was chosen as “Person of the Year”.

With the media industry set to open up, should the advertising industry take this as its cue to enter?

Previously, of the major ad networks, few have had a presence in the market. WPP, which had a presence through Bates Myanmar, cut off ties to the country in 2003, following reports of it being on a “dirty list” of 79 companies linked to business operations in the military dictatorship.

However, when Marketing spoke to CEO Sir Martin Sorrell, he expressed interest in the market again.

“We think it’s a major opportunity, when all political hurdles have been negotiated. It could be part of the next 12,” said Sorrell, without commenting further.

Marketing also approached major advertisers such as Nestlé and P&G to get their take on investing in the region.

Nestlé, previously known to be involved in the region, said it no longer had any involvement in Myanmar and would not comment on any potential investments. P&G also declined comment on future investments.

One advertising executive, previously based in Myanmar, told Marketing that opportunities were already vast in the country 10 years ago because society was not flooded with media and advertising and people were more receptive to campaigns than in other countries. But he conceded it was impossible to run any studies to prove this.

“There were only a limited number of advertising agencies and even fewer clients, mostly international groups (Nestlé, electronic products, beverages and local brands),” he said.

“Campaigns were mainly billboards, TV and some magazine ads. There was only one or two radio stations.

“(And on TV) they all displayed the same local stars such as Htet Htet Moe Oo or Eindra Kyaw Zin at that time, consisting mainly of pictures of these stars holding or drinking or wearing the products. Creativity was limited because of clients’ demands (they all wanted the same models and were not well informed of what was done abroad) and of the board which was monitoring the campaigns according to what was acceptable in the local culture according to their point of view and own criteria.”

While consumers in larger cities are now more aware of new means of communications, mobile phones, internet and television, purchasing power there is still questionable.

“I wonder if the market is mature enough for consumer products. I am guessing the development will start with international groups investing in the country to set up factories and infrastructures.

“Creating jobs might create a large enough middle-class for advertising on mass products to bear fruit. Yet, with the crisis and the international competition, it will take time.”

And perhaps another sticking point. The CIA also mentions the country faces transnational issues such as human trafficking for forced labour and sexual exploitation, with reports of women and children trafficked to East and Southeast Asia.

“Burma’s internal trafficking remains the most serious concern occurring primarily from villages to urban centres and economic hubs for labour in industrial zones, agricultural estates and commercial sexual exploitation,” said a note on Myanmar.

It goes on to list illicit drugs as another problem, with Myanmar being the world’s second largest producer of illicit opium. (It produced an estimated 610 tons in 2011, according to the United Nations Office on Drugs and Crime).

“A lack of government will to take on major narcotic trafficking groups and a lack of serious commitment against money laundering continues to hinder the overall antidrug effort,” observed the CIA.

These remain as other issues the government has to tackle if it wants to become a major business centre.

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