The development of Myanmar’s retail market is largely dependent on the success of the government’s current and future reform policies. Market growth is likely to be hampered unless prohibitive import regulations and taxes are eased. In the short to mid-term a lack of modern infrastructure and retail space is also likely to restrict the sector’s potential.
At present Myanmar’s retail sector is highly fragmented and characterised by a large number of smaller family-run businesses. It is expected that development will bring economies of scale and a degree of consolidation. Retails options will become more varied as Myanmar develops. A greater number of larger shopping complexes and department stores are likely to be developed to co-exist alongside more traditional markets and shop houses.
Demand is expected to be driven by projected improvements in overall economic conditions which should lead to a rise in wages and disposable income and the emergence of a middle income class. An increase in the number of foreign visitors and resident expatriates will also have a positive effect on retail demand particularly for imported goods. Improved utilities, the development of the Yangon metropolitan area and enhanced inter-city connectivity will also directly impact on the retail sector. The sector is also likely to be affected by increasing brand awareness, competition, and improved supply chain management (which is in turn likely to be affected by improvements in infrastructure including the development of industrial zones and modern warehousing facilities). Similarly as Myanmar develops, point-of-sale systems, credit card readers, cash registers, and sales transaction technologies are likely to become more sophisticated.
Favourable predictions can be made by reference to the development of the retail markets in neighbouring Thailand and reforming Vietnam, and there is certainly a tremendous opportunity for growth in Myanmar. However, the country must first address its limited institutional and technical capacity while at time taking steps to attract FDI and pushing through further reforms to its banking and legal systems.