Myanmar's middle and affluent classes are set to nearly double in size to about 15 percent of the population by 2020 if it can continue on the path of economic reform, according to a report released last week by US-based consultancy firm the Boston Consulting Group (BCG).
The report, Vietnam and Myanmar: Southeast Asia’s New Growth Frontiers, assessed the middle and affluent class as those with a monthly per-capita income of more than US$120, which currently applies to just 5.3 million of Myanmar’s population of about 60 million people. By 2020, BCG projects that figure to grow to 10.3 million.
“Companies have an opportunity to reach, satisfy, and win over these consumers at the first stage of their purchasing power. Caution, however, is in order,” the report states, adding that two-thirds of the nation’s middle- and affluent-class population live in urban areas, while half live in just three regions – Yangon, Mandalay, and Ayeyawady.
The report shows that as a result of growing income levels, the number of poor in Myanmar will subsequently drop from 23.1pc to 15.4pc by 2020, while 27 percent of the population has increased discretionary spending over the past year.
“When Myanmar consumers do shop, they tend to buy basic goods and services. Fewer than half of urban residents buy chocolate, ice cream, or fresh milk. Only about one-quarter go on vacation and fewer than four out of ten frequent restaurants,” the report states.
“Consumers in Myanmar frequently buy entertainment products, however, especially VCRs, before they buy consumer durables. This is understandable. The uncertainty of electrical service discourages the use of expensive appliances.”
Nevertheless, the report shows that more than 80pc of urban consumers are still financially insecure, far more than the 30pc of those surveyed in Vietnam who attested to the same problem.
“Myanmar consumers also continue to rely predominantly on traditional rather than modern formats for shopping,” the report continues. “Only 19pc of consumers use supermarkets regularly. Consumers are drawn to the quality and brand selection that these stores offer, but too few of them are available.”
While consumers may be financially insecure, 95pc of those surveyed feel as though they will have a better future than their parents did while 96pc believe their children will have a better life than they did.
source: The Myanmar Times
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