A dusty street vendor taps on the taxi window. He's not peddling flowers
along the thoroughfare in Myanmar's business capital of Yangon. He's
touting homemade copies of the country's foreign-investment law and
import-export regulations.
Myanmar is open for business. After two decades of isolating
sanctions, this Southeast Asian country represents one of the few places
largely untouched by Western brands. “The market is totally fresh. ...
And the price of making a mistake is high,” said Shakir Moin, marketing
director for Coca-Cola in Myanmar and 10 other Southeast Asian markets.
There's heady optimism surrounding the Texas-size former British
colony also known as Burma, though it presents acute challenges. The
country is grindingly poor and rural, and distribution is a major
hurdle. But the potential for change is dizzying. Myanmar is rich in
natural resources, with a large working-age population and heavy foreign
interest in infrastructure deals. In the digital age, farmers plowing
paddies with water buffalo could be checking rice prices on smartphones
in the not-too-distant future.
As Moe Kyaw, managing director of Myanmar's leading market-research
agency, MMRD, puts it: In Myanmar the glass isn't half-full or
half-empty; Myanmar now actually has a glass.
Muhtar Kent, CEO of Coca-Cola -- one of the first American businesses
to re-enter Myanmar -- likened the feeling in the country to when the
Berlin Wall came down in 1989, allowing the beverage giant to enter
Eastern and Central Europe. There are “wonderful challenges and
opportunities ahead,” he told the BBC this month in Yangon as he
announced a five-year, $200 million investment plan.
Coke will have to make the right first impression after 60 years away
from the market. Solid figures don't exist on brand awareness in
Myanmar, but “you can presume most people don't know [the brand],” said
Mr. Moin. Reintroduction efforts include sampling at events such as
pagoda festivals, supplying coolers to retailers that typically sell
drinks at room temperature and distributing leaflets explaining the
“correct” way to drink a Coke (answer: ice cold).
TV advertising is king, but there's no fancy analysis because data
are lacking and only seven channels serve the 50% of families that own
TVs. Outdoor is powerful, as are in-store and sampling. Remember Yellow
Pages ads? They are alive and well in Myanmar.
MasterCard has sponsored a hotel and hospitality conference to build
relationships with key partners. For now, it's targeting foreigners
traveling to Myanmar. In the arrivals area at Yangon airport, signs
declare: “MasterCard: The First Card Accepted in Myanmar.”
MasterCard is accepted at 85 ATMs in Myanmar and 77 point-of-sale
terminals, mainly at businesses like hotels and high-end restaurants,
said Antonio Corro, MasterCard's country head for Thailand and Myanmar.
Its agencies for the market include McCann, UM and River Orchid, an Indochina specialist agency.
“You cannot underestimate the potential of Myanmar. Forty years ago
Myanmar was one of the richest countries in Southeast Asia,” Mr. Corro
said.
Myanmar could grow as much as 8% a year if it can diversify its
economy beyond agriculture into areas like manufacturing, mining,
tourism and telecom, according to a McKinsey & Co. report.
Per-capita GDP could rise to $5,100 by 2030 from $1,300 in 2010,
potentially creating a consumer class of 19 million.
Western brands aren't totally foreign to Myanmar consumers. The
country was economically vibrant until a military regime seized control
in 1962 and its economy fell behind those of neighboring India, China
and Thailand. International sanctions applied since the 1990s for
human-rights abuses cut off many global business ties. A new, nominally
civilian government triggered a rollback on sanctions last year,
transforming Myanmar into the next frontier for marketing.
Many multinational marketers will be competing against entrenched
local and regional brands like Myanmar beer, Mamee instant noodles and
Oki laundry detergent. Mom-and-pop stores dominate the retail scene,
offering a basic selection that highlights the simplicity of Myanmar
life: toothpaste, soap, Chinese-made flashlights, banana-flavor snack
cakes.
Among Western brands, Unilever's
Sunsilk shampoo is a hit. However, 80% of Sunsilk is sold in sachets,
the sample-size packets that make it affordable for most consumers. At
the market in the town of Kyauktan, a sachet costs 50 kyat, or 5¢.
“We cannot expect this country will overnight be the same as Thailand
or Vietnam. That will take time. Like it or not, there will be a lot of
things that will have to be developed from the ground up,” said Bauke
Rouwers, CEO of Unilever in Myanmar and several other Asian markets.
“There's a big future ahead 10, 20 years from now. But we start from a
very, very low base.”
In a market like Myanmar, multinational clients need to quickly find a
local partner or distributor and figure out who's important to know.
Everyday problems include frequent blackouts and internet service so
unreliable it can take an hour to send an email.
Still, telecommunications has the biggest potential among consumer
categories. Mobile-phone SIM cards that used to cost $3,000 are now $2,
and supply can't keep up with demand. Samsung shops seem to be on every
other block in Yangon's downtown, amid hauntingly beautiful decaying
colonial buildings. A $460 Galaxy S3 is out of reach for all but the
wealthiest consumers. But phones from China's Huawei that cost as little
as $80 are popular, a sign that some Asian marketers are beating
Western rivals into Myanmar.
Zaw Min Oo wants to capture that upper crust of Myanmar consumers
with the country's first international fast-food restaurant, part of a
South Korean chain. “People are more and more busy, they can't cook at
home, they need fast food like in Japan or Korea,” he said over blaring
pop music at his restaurant, Lotteria, which has attracted long lines
since opening at the end of April. He plans to open 25 locations in the
next five years.
College student Aye Chon Phyu and three girlfriends, sharing a $6
four-piece chicken basket, learned about Lotteria on Facebook, which
they surf on their phones. Anecdotally, the social network has taken off
in Yangon during the past few months with the rise of mobile internet
service in the city.
Western fast-food chains can't be far behind. Last month, KFC
organized a tasting event in a Yangon hotel ballroom for Myanmar media
and government officials. Its parent, Yum Brands, is exploring opening KFCs and Pizza Huts in the market, said a spokesman.
Agencies are following brands into Myanmar. WPP's Ogilvy
was the first international agency in the country, in May 2012
acquiring a stake in local shop Today Advertising. Now called Today
Ogilvy & Mather Myanmar, clients include Coca-Cola and Unilever's
Ponds and Sunsilk. “Once things changed there politically and we were
able to do business, we moved quickly,” said Kent Wertime, Ogilvy's
chief operating officer in Asia.
Dentsu is also open for business, and WPP's JWT
has an affiliation with Mango Marketing Services, founded in 2004 by
Aye Hnin Swe and Lynn Lynn Tin Htun after sanctions forced out
international agencies. The local businesswomen have grown their shop to
more than 50 people from seven and now find themselves overwhelmed with
requests for help.
“Everybody comes in and asks for so many things,” said Aye Hnin Swe,
also known as Rose. She started her career with Bates in Myanmar and
later established ZenithOptimedia's operations in the market. From being
a sleepy place where the workday ended at 5:30, “what I see now are
people are very willing to take on the challenges. ... You can really
sense the spirit of enthusiasm.”
Anxiously watching are local marketers like William Yang, whose
company Shwe Tha Zin handled Unilever's distribution before the
sanctions. When Unilever was forced to pull out, he filled the network
with his own products. “Before it's like we [were] competing in the
Myanmar league,” he said, using a soccer analogy. “Now all of a sudden
we are raised to the Olympics. Spain is coming, Italy is coming. There
is a chance we might lose. That's a reality.”
source: AdAge
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