Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Rising
Consumerism
in Myanmar
JANUARY 2018
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Table of
Contents
03 Executive Summary
27 Infographics
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Executive
Summary
Hailed as the last frontier market in Asia, Myanmar instantly garnered
the interest of not just regional but also global investors looking to
capture untapped opportunities in this burgeoning market.
With the opening up of its economy in 2011, FDI increased from USD
4.6 billion in FY2011-12 to USD 9.5 billion in FY2015-2016. In March
2016, a new democratic government led by the National League
for Democracy (NLD) under State Counselor Aung San Suu Kyi and
President Htin Kyaw was formed, reinforcing faith in Myanmar’s
accelerated growth trajectory and fast pace of economic reforms.
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The first
growth wave
Myanmar - Generations
frozen in time
Now picture a generation growing up under ~50 years This generation had limited access to phones with SIM cards
of debilitating military rule, failed implementation of a costing >USD 2,000, which most people couldn’t afford,
“Burmese way of Socialism” that led to forced isolation of with sporadic access to the internet, primarily restricted to
the country from the rest of the world, the demonitization internet cafes with snail speed forcing aspirants to stay late
of the 50 and 100 kyat notes which were replaced by at night in these cafes just to submit a university application.
currency values divisible by the “auspicious” no. 9 with
limited compensation and a dysfunctional financial system
that led to heavy reliance on cash. And all this was not decades ago,
this was as recent as 2010, in
MYANMAR.
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While the West debates characteristics of Gen Alpha,
in Myanmar a much delayed economic transformation
Kachin
and digital revolution was finally initiated in March 2011
with the establishment of the first quasi democratic Sagaing
government. Additionally, various administrative
divisions, states, regions and ethnicities add multiple
layers of complexity to the Myanmar story that is just
beginning.
Chin
14 Myanmar has 14
Shan
administrative divisions Mandalay
Magwe
Rakhine
Kayah
of these administrative divisions
Yangon Kayin
Ayeyarwady
Remaining 7 of these Mon
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There are
>135
The Bamar ethnic majority accounts for ~68% of the
population followed by the ethnic Shan minority (~9%)
and Karen (7%). While the government & military is
predominantly Bamar, the resource rich areas are
ethnicities in
inhabited by the ethnic minorities, leading to mistrust
and armed conflicts that have often disrupted industrial
activities in the regions. The ethnic groups claim that
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Dawn of a new era
A new democratic government led by the National League for However, the implementation of the new Myanmar
Democracy (NLD) under State Counsellor Aung San Suu Kyi and Investment Law in October 2016 as well as the
President Htin Kyaw, was formed in March 2016 after the NLD’s prioritization of investment in 10 areas including
landslide election victory in November 2015, reinforcing hopes of agriculture, export promotion, power and import
a progressive future. substitution is expected to offer a fresh impetus
for Myanmar’s economic expansion 2018 onwards,
While the NLD has been instrumental in the much welcomed especially driven by its young population.
announcements by the US and the EU to lift economic sanctions
imposed for decades, there are still high expectations and
significant concerns related to the NLD’s ability to accelerate the
economic growth achieved under the previous President Thein
Sein.
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Myanmar’s promising
young workforce
Myanmar’s trophy population:
Distribution by age and gender (2016)
Male Female
A staggering 36% of the population belongs As a result, the age group of 25–29 accounted for the
highest share of the Burmese population migrating to
to the 10-29 age group followed by 27%
more urban areas domestically during the five years prior
which belong to the 30–49 age group to the 2014 Census. Across all age groups, 43.7% cited
employment or search for employment as the key reason
This age group presents not just a young and aspiring for moving between states/regions to more urban areas.
workforce but also a significant untapped consumer base. This population movement has a high correlation with
After years of economic deprivation and exclusion from the economic development in the form of industrial zones and
global ecosystem, the young Myanmar population is chasing special economic zones, which remains geographically
their long delayed dreams, impatient to secure better job concentrated.
opportunities, gain access to global brands, connect to the
digital world, and accelerate their impact on the economy.
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Concentration of
opportunities for future
growth
Myanmar’s population density by While population density in Yangon and Mandalay reflect
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Differential impact of
reforms
Inter-state/regional movements for
better opportunities
Rakhine Magwe
Ayeyarwady
Yangon
Mon
The city water supply caters to ~60% of
Yangon’s population and ~67% of Mandalay’s
population as of 2016 with plans
> 350,000 recent migrants
60%
for further expansion supported
100,000 > 150,000
by funding and loan support from
60,000 > 80,000
JICA, ADB and AFD.
40,000 > 59,900
20,000 > 39,900
Note:
Recent migrants refers to people
who moved within the five-year
period prior to the Census Source: Department of Population, UNFPA, JICA, Myanmar
Census 2014, Solidiance Interviews & Analysis
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The push towards a more industry-based economic output
is imperative to accelerate economic growth, especially
with the highly manual nature of the agriculture sector in
Myanmar.
Legend
Employment
share (%)
0 - 15
15 - 30
30 - 45
45 - 60
60 - 75
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The next growth
wave
Evolving generational attitudes drive
consumer spending...
The stark contrast in Myanmar’s turbulent history on one hand and the fast paced
reforms in recent years has had a differential impact on its population in terms of
influencing their current attitudes, beliefs. and values as well as their needs and
preferences as consumers.
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Optimists *
18% Declining foreign trade as the economy is closed off;
Widespread shortage of basic commodities with redistribution
of land and wealth; Burmese replaces English as the official
Birth Year: 2017 Age:
language; New Constitution Implemented. As a result,
1965 - 1979 38 - 52
some Burmese left in search for better opportunities in the
Embrace Change More tech/social region and the West, or having experienced adverse impact
Accept Diversity media savvy than even
of the military coup within the country are highly open to
younger generation
Investment Oriented liberalization, new technologies and progress.
Question Authority
Aspirants *
making; Demonetization (1987), Classified as a Least Developed
Country, Student-led Democracy protests (1988), Aung San 23%
Suu Kyi placed under house arrest (1989), 1990 election results
nullified, General Than Shwe appointed as Prime Minister Birth Year: 2017 Age:
in 1992. With a largely Burmese mode of education, the
1980 - 1994 23 - 37
Aspirationalists are challenged by their traditional education Value Conscious Ambitious
background discouraging critical thinking on one hand and Entrepreneurs Experimental
having to adapt through experiential learning with changing Western-Affinity Impatient
times in an increasingly competitive environment on the other Open to New Burmese Mode of
hand. They are impatient to catch up and connect globally. Technology Education
Birth Year: 2017 Age: political reforms launched with avg. annual GDP growth of 8.2%
1995 - present < 22 during his tenure; FDI increased from USD 1.9 billion in 2011/12
to USD 8.1 billion in 2014/15. NLD led Government elected in
Tech-holics Individualistic
March 2016. Liberalization, especially in telecom has led to
Competitive Ambitious
unprecedented connectivity, increased exposure, access to
Aggressive Voracious Consumers global brands creating a “Connected” generation that is bridging
Opinionated Flexible the gap between their regional and global counterparts.
More Vocal/Sharing Affinity for Foreign
Online Brands
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...with Optimists and
Aspirants leading
transformation
GDP per capita in ASEAN regions (2016, in USD)
INDONESIA 3,604
MALAYSIA 9,360
THAILAND 5,899
MYANMAR 1,269
PHILIPPINES 2,924
VIETNAM 5,899
Myanmar’s GDP per capita forecast The fast paced reforms and incoming foreign
(2016-2022F, in USD) investments have led to better employment
2,211
2,017 opportunities, faster growth and higher spending
1,832 power especially for the Optimists and Aspirationalists
1,662
1,510 who have embraced change and economic
1,375 development. However, GDP per Capita in Myanmar
1,269
continues to be the lowest amongst its other ASEAN
neighbors, leaving much room for growth. GPD per
capita is estimated to reach USD 2,211 in 2022, similar
to current levels in Vietnam indicating rising business
and consumer confidence driven by a burgeoning
middle class primarily comprising a young population.
2016 2017 2018F 2019F 2020F 2021F 2022F
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Driven by higher spending
power
Average monthly income
per person as % of Only
24%
Currently, only ~24% of the Myanmar
population in Myanmar population earns >USD120 per month
(2016)
as bulk of the population (>60%)
5% Earns continues to be employed in the
> USD 120 unindustrialized agriculture sector.
per month
19%
41% However, this share is expected to increase to 48% by 2022
driven by rising employment opportunities in the services and
manufacturing sectors as well as with rising incomes driven by foreign
11%
23%
37%
29%
The government succeeded in attracting key retailers including Adidas,
Gap and H&M for manufacturing in Myanmar by offering the lowest
wages in Southeast Asia which in turn led to labor rights concerns.
As a result, trade unions were legalized and MMK3,600 (USD 2.64)
< 75 USD < 75-120 USD was established as the minimum daily wage in late 2015. However,
there have been increasing dissent amongst workers facing economic
< 120-250 USD > 250 USD
headwinds of deteriorating working conditions as well as rising
inflation, leading to calls to raise the minimum daily wage to MMK
5,600 (USD 4.2).
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Albeit with high inflation
Inflation, average consumer prices forecast
70%
60%
50%
Myanmar
40%
Thailand
Vietnam
30%
20%
10%
0%
2000 2002 2004 2006 2008 2010 2012 2014 2016F 2018F 2020F 2022F
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Rising consumerism in
Myanmar
Traditionally an investments and savings-oriented population
4%
7%
55% 3%
2%
6%
2%
1%
4% The typical Burmese spends ~45% of the monthly average income
1%
compared to Thailand consumers who spend ~70% of their
income. This can also be attributed to the behavioral patterns
outlined earlier, especially for the 38–52 year old Optimists
Thailand’s total average
who are more investment driven as well as the 23–37 year old
consumer spending (2016)
Aspirationalists who remain value conscious.
19%
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“Connected” generation to
drive voracious consumerism
A key barrier in Myanmar is also the slow financial sector There is also a slow but steady transformation of
development as well as the adoption of credit/debit cards in purchasing processes and decision making, especially
Myanmar is still quite low with ~30% having a bank account. across the urban areas driven by a rise in modern trade
However, with rising development of the financial sector, outlets. While traditional wet markets and road-side
coupled with the “Connected” generation aged above 22 who hawker stalls are the primary and often the only available
are characterized as ‘voracious consumers’ and with higher retail channel for bulk of the rural population, the urban
affinity for foreign brands and products, are expected to population from key states are switching frequently to the
drive consumer spending going forward as they bridge the modern retail channels especially the smaller convenience
gap between their regional counterparts and catch up. stores.
Vendor/Hawkers Supermarkets
(Shops opening on the roads) (large self-service stores selling F&B, FMCG, etc.)
CONCESSIONS
Ambitious growth plans by local modern retail operators
such as City Mart, Capital and Gamone Pwint, have increased
presence of 24-hour convenience stores as well as Supermarket
and Hypermarkets not just in Tier 1 cities but also in Tier 2 and
3 cities of Pathein, Taunggyi, Mawlamyine
2012
2013
2014
2015
2016
2017
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Rapid digitization to bridge
regional gap
From no phone to smartphones
2014 27%
License awarded to foreign players Telenor & Ooredoo,
2013 10% with SIM cards being priced as cheap as USD 1.5 52% of
subscribers
2012 6% SIM card price dropped to ~USD 200-500 are active
data users
Market was monopolized by MPT with a
2011 4% SIM card costing USD 1,500
55%
in Myanmar were broadband i.e. either 3G or 4G
2015 2016 2015 2016 2015 2016 While the Optimists generation comprising
Urban 9.3% Rural 29.8% Total 16.4% of 37–51 years age group (as of 2016) has
posted the highest growth, the Contemplative
Smartphones No Smartphones
generation comprising the 52-70 years
old age group (as of 2016) which has been
apprehensive of the changes initially, are also
Smartphone penetration (by age)
now keen to ride the technological growth
93% wave.
84% 84%
73% 76%
62%
57% 55%
51%
44%
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Facebook is
THE internet
14 93% 49%
MILLION of Facebook of Facebook Users
Monthly Active Users accessing use Facebook
Facebook Users via mobile everyday
0.7%
Myitkyina
1%
Taunggyi
5%
Monywa
Mandalay
20%
Mandalay
Taunggyi
30.3%
Others
43%
Yangon
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Android
dominates due to
affordability
Myanmar handset share (Oct 2017) Source: GS.StatCounter, Solidiance Interviews & Analysis
However, the Optimists and the youngest These generation groups will be crucial for driving the next
phase of the digital adoption in Myanmar including cab sharing
generation aptly named Connected
apps such as Grab and Uber which have already witnessed a
are spearheading transformation in favorable start in Yangon, mobile money transfers which have
smartphone usage, downloading apps, seen significant interest albeit with limited actual transactions as
well as e-commerce and mobile banking for which infrastructure
browsing web pages and even ordering
development and targeted customer education remains crucial.
online.
2014 online
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E-commerce volumes by
product category (2016)
15%
Furniture,
baby product
25%
beauty/ 60%
Fashion Electronics
...with rising
E-commerce volumes by
regions (2016)
penetration of
11%
smartphones
Others
Myanmar’s e-commerce industry is at a nascent stage with most
popular sites receiving less than 0.7 million visitors monthly while
22% the number of internet users is ~38 million. Bulk of the transactions
Mandalay
67% remain concentrated in Yangon and continue to rely on cash-on-
Yangon delivery options primarily. However, 85% of the visitors traffic comes
from smart phones, with customers appreciating the convenience of
shopping on the go.
Mobile internet access has only Myanmar e-commerce market is smart phone driven. Hence,
become broadly accessible since optimization on phone and having a responsive website is
late 2014, but the experience extremely important.
for online shoppers in Myanmar
have improved drastically in the MD, Shop.com.mm
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Implications for
investors with evolving
generational dynamics
Myanmar has undergone rapid transformation in a relatively short time, The Burmese market is
while it took decades for some of its regional neighbors to achieve similar
definitely not an ideal
levels of economic progress. Hence, it is important to understand the
impact of this rapid pace of development on consumers not just on a
destination for investors
regional or urban vs. rural perspective but even through the defining looking for short term wins,
political and economic events that the consumers have been exposed to and will continuously test
across different age groups. sustainability, long term
Identifying the target age group, consumer attitudes and preferences commitment, and perseverance
becomes extremely crucial for both local and multinational companies of the investors and growth
looking to engage Burmese consumers. strategies in multiple ways.
Rising
consumerism Technological
to drive local leaps to boost
manufacturing SME innovation
Consumer firms such as Unilever, Henkel and Nestle, With Myanmar leapfrogging straight to smartphones,
automotive firms such as Nissan and Suzuki have all a range of tech start ups have emerged to cater to
established local facilities to better cater to the local basic needs of the people especially in the financial,
demand healthcare and educational sectors
Customer
education is Offline & online
key integration
While customers are impatient to catch up, While social media remains the predominant mode
highlighting the value of your products and services of engagement, effectively integrating online and
remains key with consumers being more value- offline marketing through a “customer oriented”
conscious than price conscious. Targeted customer approach rather than a “product oriented” strategy
engagement strategies will be more impactful in a will be key.
segregated complex market such as Myanmar
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The Next Growth Wave:
Rising Consumerism
in Myanmar
Myanmar’s economic and political situations have
influenced behavioral patterns in different generations of
Burmese consumers.
Under military rule for ~50 years that led to forced isolation
of the country from the rest of the world.
68% 90% 7% 16% 32% of the population has access to electricity, with
Bamar Shan Karen Others
Yangon accounting for 50% of the total electricity
ELECTRICITY consumption
RELIGION
90% 6% 2.3% 1.7% Ageing transportation infrastructure remains a key barrier
Bhuddists Christians Muslim Others INFRASTRUCTURE
for economic growth
15% 5% 4%
19% Food & Beverages Transportation, Education
Rent & Utilities
41%
4% 2% 55%
35% Clothing Healthcare Savings
2% 6%
~24%
of the Myanmar population earns
>USD120 per month Telecommunications Personal Care & Household Products
14 93% 49%
MILLION of Facebook of Facebook Users
Monthly Active Users accessing use Facebook
Facebook Users via mobile everyday
78%
of Smartphone penetration as of
January 2017
These generations will be crucial for driving the next phase of the
digital adoption in Myanmar including cab-sharing apps, mobile
of all mobile connections are money transfers, as well as e-commerce and mobile banking
55% broadband (3G/4G)
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Authors
Naithy Cyriac Manager
Naithy is a Manager, leading our Myanmar office since 2014. With over 8 years of consulting
experience across a range of sectors including automotive, FMCG, healthcare and construction,
she has worked extensively with MNCs exploring investment opportunities across ASEAN. Prior
to joining Solidiance, Naithy was a Senior Associate at a leading credit research and analytics
firm, where she led various projects including investment opportunity analysis and due diligence.
Naithy graduated with an MBA from the National University of Singapore and Cornell University
and holds a Bachelors of Science degree from St. Stephen’s College, Delhi University.
Khine Yi Analyst
Khine Yi is an Analyst based in Solidiance’s Myanmar office. Before joining Solidiance, Khine Yi
has gained 4 years of professional experience during which she worked as a project officer to
serve various residential and commercial clients as well as in-depth knowledge and experience in
trading firms. Khine Yi holds an MBA from the University of Cardiff Metropolitan, UK and holds a
Master’s degree in English from University of Pathein.
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About Us
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