Traditional retailers still rule in Burma

As it opens up to new foreign investments, Burma shows strong potential for retail business, according to a study by Thailand's Hypertrade Consulting.

According to the survey, the value of Burma's retail market is about US$5 billion (Bt150 billion) and grew by 20 per cent last |year (inclusive of exchange-rate variations).

The survey estimates that traditional trade represents about 90 per cent of the retail market in Burma. These stores come in many shapes and sizes. The main types are dry-food stores, non-food stores, and a growing number of beauty shops.

They have an average of 16 suppliers in two main groups, wholesalers and large distributors such as DKSH and Mega. The typical store in this category carries between 500 and 1,000 stock-keeping units.

As it is still difficult to import products legally, Burma is a perfect example of a supply-driven market where shoppers are eager to buy almost anything that is available. While official imports are growing, and import regulations and taxes progressively smoothed by the |government, border trade and wholesalers own a large part of |the market.

Almost all international consumer goods can be found on store shelves in all retail channels. Except for alcohol and cigarettes, which have very well-established local brands, Burmese products are mostly commodities and locally produced because of the absence of industrial infrastructure.

The main large industrial set-ups producing consumer goods are foreign: Mama instant noodles from Thailand have been produced in the country for several years, and it said that Pepsi is building a bottling facility.

Respondents to the survey, which was conducted last year in Rangoon, Naypyidaw, Monywa, Taunggyi and Bago, interviewing 840 shoppers and 200 owners of traditional stores, agreed that what they were looking for was choice and availability. In a previously closed market where supply drove demand, this is not surprising. But things are already changing, as real shopping promotions are appearing in both modern and traditional stores.

On average, shoppers visit stores up to three and a half times a week, spending an average of 3,500 kyats per trip. The primary mission of their shopping trip is to replenish their home supplies. The average time spent in traditional trade stores is 15 minutes.

The scarcity of local transport and the prohibitive price of cars make proximity to people's homes one of the two main criteria for store selection.

Burmese shoppers also highly value the ease of finding products in a store. This has to be understood in a context where traditional stores provide a lot of assistance to shoppers looking for particular products. This is also true in modern-trade stores.

There are not many modern retailers in Burma yet, and they all started with a limited number of stores serving a very small number of well-off people with a large selection of quality imported products. Representing only 10 per cent of the market, modern-trade retailers have aggressive expansion plans. And so far, they have demonstrated an ability to grow their businesses without much infrastructure, which shows how ingenious and creative they are.