Myanmar retail sector growing but e-payment methods still lagging

Myanmar's retail has been growing rapidly with the emergence of a growing middle-class consumer base but e-commerce has yet to catch up with new demands.

October 2020 , Featured: Naithy Cyriac

YANGON, OCTOBER 2020 - The Myanmar retail sector has been growing rapidly with the emergence of a growing middle-class consumer base but e-commerce has yet to catch up with the new demands of customers, according to a white paper from consulting firm YCP Solidiance.

The document, entitled “The Transformation of Myanmar’s Retail Industry”, highlighted that the sector has grown rapidly since 2012, attracting over 50 Asian brands and driving the development of modern retail establishments as well as mixed-development in Myanmar.

Since 2013, modern groceries and mixed retailers have grown yearly. Based on 2019 estimates, modern groceries had generated US$269.6 million in sales while mixed retailers generated US$177.8 million in sales. In comparison, modern groceries made US$201.2 million in sales in 2018, while mixed retailers raked in US$145.7 million.

During the period, the number of modern retail channels also expanded in tandem with demand, and now makes up 10 percent of Myanmar’s retail segment. Previously, wet markets and mom-and-pop stores dominated the retail market.

Despite the growth of the modern middle-class, the e-commerce sector has remained stagnant with regulatory improvements still lacking.

The proliferation of informal online stores, especially on Facebook, still presents a challenge for the sector. Despite the presence of large e-commerce players such as Alibaba’s and local e-marketplace rgo47, informal vendors dominate a slice of the market share through infomercial-driven sales and product demonstrations through platforms such as Facebook live streaming.

Additionally, e-payment systems are still behind in Myanmar and the majority of consumers have yet to open bank accounts or apply for credit cards. Meanwhile, bank transfers are perceived to be inconvenient, involving long queues.

Nearly 90pc of Myanmar e-commerce transactions are settled via cash-on-delivery payments, according to the document. 

As such, multinational firms can tap the developing e-commerce segment as a potential area of exponential growth. 

On balance, YCP Solidiance concluded that it is optimistic for the future of Myanmar retail. It expects the sector to expand further as more consumers upgrade their lifestyles and spend more on foreign brands, leisure and entertainment.

This will enable mixed and integrated retail developers to have better potential to invest, it said.

Moreover, there is also market potential in Mandalay, which is now seeing a rise in retail development.


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