The economy of Myanmar is rapidly changing. In less than a decade of economic liberalization, consumerism seems to have taken hold in the country’s population. Currently, Myanmar is also experiencing digital transformation in fashion retail.
Myanmar Recent Economy in Brief
Myanmar’s economic liberalization was started in 2012. A significant change happened in 2015, where the newly elected government opened the country’s doors to foreign direct investment. In the same year, it is estimated that USD 9 billion flowed into Myanmar.
Between 2014 and 2019, Myanmar’s GDP will grow 6% on average year to year. This rapid change doesn’t go unnoticed by international businesses. Myanmar has a vast, tech-savvy young population, which is a dream landscape for retailers.
Myanmar has a population of 54 million, almost half of which are under 25 age groups. On one hand, the country’s demography presents an untapped rising consumer market. On the other, it promises long-term opportunities for growth for consumer brands and retailers alike.
Similar to other Asian markets, the country’s young population seems to have an appetite for discretionary spending. Various modern retail brands, both from within the country and across the world, are ready to feed the demand.
In fact, lots of foreign brands have become household favorites, showing a glimpse of the population’s discretionary spending. The products range from consumer electronics, cosmetics, beauty, to K-pop. To put it simply, appearance and lifestyle play a huge role in consumers’ spending patterns.
Transformation Myanmar Retail Industry
The changes don’t stop at the lifestyle segments, however. Myanmar’s basic retail segments, such as groceries, also undergo changes. This is evident in the country’s big cities. In Yangon, for example, modern supermarkets are increasingly replacing traditional grocery retailers.
Up until 2014, mixed retailers dominated the market share in Myanmar. Mixed retailers have sales worth over USD 65 million versus modern grocery retailers’ USD 62 million. Since then, both of these segments keep moving on an upward trajectory.
In 2015, modern grocery retailers started to outperform mixed retailers. In 2019, modern grocery retailers have sales worth USD 270 million, while mixed retailers have sales worth USD 180 million.
Digital Transformation in Retail?
Although the country’s experienced fast economic growth and changes, its modern retail at the moment accounts for only 10% of the country’s overall retail landscape. So in terms of Myanmar’s digital transformation in fashion retail, it is still a long way to go.
Myanmar’s population is young, tech-savvy, and digitally connected. However, Myanmar is yet to see any e-commerce penetration. Internet-based purchases account for a quarter of total non-store-based sales, which in turn accounts for less than 1% of all sales in the country.
The country is also lacking a regulatory framework for e-commerce. This creates a barrier for e-commerce as online sales become rather uncertain. The good news is that the intent for online shopping is there and its market, albeit small, keeps growing.
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