Myanmar retail will get investment boost
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Myanmar retail will get a boost from the lifting of US sanctions, opening the way for foreign investment.
The official end of the restrictions was formalised on October 7 and confirmed by the US Treasury, unblocking sanctioned properties, removing various banking restrictions and reporting requirements for investment. Exporters and manufacturers are expected to be the main beneficiaries, but the retail sector is also expected to see Western brands seeking local partners.
With the easing of restrictions, local partners will find it easier to find international firms looking to enter the country, but due diligence will be needed as per industry analysts.
Several brands have already entered the market in recent years including KFC, Pizza Hut and Gloria Jean’s Coffees. Japanese retail company Aeon was the first foreign retail chain to gain access to the market this year. It partnered with Creation (Myanmar) Group to open stores in Yangon and Mandalay.
In addition, demand for retail space, which is in shortage, is expected to go up following Aeon’s lead. While the trend of shifting from local stores to large retail centers will take time, the pattern is already changing in major urban centers. The wider range of products, particularly foreign brands is expected to further quicken the process.
Questions & Answers
Which specific foreign retail chain was the first to enter the Myanmar market this year?
Japanese retail company Aeon was the first foreign retail chain to gain access to the Myanmar market this year. It entered into a partnership with Creation (Myanmar) Group.
What is the expected impact on retail space demand in Myanmar following recent developments?
Demand for retail space is expected to increase, especially after Aeon's market entry. There is already a shortage of suitable retail space within the country.
How will the easing of restrictions affect local partners looking to collaborate with international firms?
Local partners will find it easier to identify international firms interested in entering Myanmar. However, industry analysts advise that due diligence will still be necessary for these partnerships.