How to Successfully Penetrate the Myanmar Market

At present, Myanmar is a new potential market for Vietnamese enterprises. The Vietnam Trade Office in Myanmar said that Vietnam was the 13^th largest exporter to Myanmar in 2011 with US$82.45 million, which represented a year on year rise of 66.5 percent. In the first quarter of 2012, Vietnam exported US$20 million worth of goods to Myanmar, up 16.8 percent over the same period in 2011, ranking 12^th among exporters to this market. Vietnam mainly ships steel, apparel materials, chemical fertilisers, construction materials, electrical equipment, tyres, stationery, processed foods, machine parts, medicines, cosmetics, computers and parts, and food materials to Myanmar. Nonetheless, its market share is still very modest compared with the potential.

 

Mr Dam Trung Bac, Honorary Consul General of Myanmar in HCM City, said Myanmar has completed a seven-step roadmap toward democracy and opening and this country is thus in need of investment and cooperation from other countries, including Vietnam. At present, Myanmar is apparently lacking consumer goods as its domestic production meets only about 20 percent of the demand and the shortfalls are to be offset by imports. For the time being, most consumer goods are imported across border gates with China, Thailand and India. However, the quality of consumer goods imported from these countries is quite low. Meanwhile, Burmese people are very keen on products made in Vietnam because of good quality, nice design, and affordable price. This is really a great opportunity for Vietnam enterprises to gain access to this fertile market with affordable quality products.

 

In recent years, Vietnam has exported a few products like electronic appliances, apparel materials, steel, and plastic products to Myanmar, but they hold a very small market share compared to other countries. Besides, Myanmar has a huge demand for many products that Vietnam’s businesses have not yet supplied, such as medicines, medical equipment, tyres, electrometers, spare parts, building materials, pesticides, cosmetics, fertilisers, agricultural products, construction steel, textile materials, and consumer goods. This proves that Vietnam’s businesses have not yet paid due attention to this fertile and easygoing market. Mr Bac said: “It is time Vietnamese businesses had a more correct view of the potential and importance of the Myanmar market to map out suitable approaching strategies.”

For HCM City, Myanmar is considered one of three important neighbouring ASEAN markets, together with Cambodia and Laos; thus, the city - in addition to specific cooperation programmes - has proactively supported its businesses to enter and invest in Myanmar. In its recent Myanmar market survey and its investment, trade and tourism promotion conference held in Myanmar in March 2012, leaders of HCM City and Yangon City signed an agreement on friendly cooperation between the two cities to strengthen economic, cultural and social cooperation and trade investment development. To implement bilateral agreements, HCM City plans to host a big trade promotion programme in Myanmar through the HCM City Trade - Services Exhibition in Myanmar (Ho Chi Minh City Expo 2012). The event is set to open from June 15 to 19, 2012 at Tatmadaw Hall Exhibition Centre, Yangon City, Myanmar.

Mr Huynh Tan Phong, Deputy Director of the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC), informed that the centre led a Vietnamese business delegation to Myanmar to explore the market, and he felt that the taste and demand of Burmese people was quite similar with Vietnamese. Furthermore, the consumer demand in this country is quite big and consumers are not as strict as those in South Korea, the EU and other markets. This is actually an opportunity Vietnamese enterprises should not miss.

 

In addition, Myanmar is an agricultural country, with 75 percent of population living in the countryside and living on agricultural production, animal husbandry and fishery. Animal husbandry, fishery and forestry make up 50 percent of GDP, but the growth is stagnant and productivity is low. At present, Myanmar's rice yield is just 2.5 tonnes per ha, while it is 7 tonnes in Vietnam. Thus, Myanmar is eager to learn from Vietnam’s business models as well as cooperate with Vietnam in agriculture and aquaculture like culturing shrimp, fish and crab, growing rice and beans, and catching fish. Vietnamese businesses are absolutely strong and experienced enough to cooperate with Myanmar in agricultural development. In addition to agriculture, the service sector of Myanmar remains underdeveloped despite recent huge investment from businesses in other nations. This is also an opportunity for Vietnamese enterprises to promote investment in developing key industries such as repairing of automotive, electronics and refrigeration equipment and supplying construction materials.