Consumer-goods market in Myanmar has high potential, conference hears

If the approximately 100,000 expensive cars on the streets of Yangon are any indication, there must be at least half a million consumers in Myanmar that could be considered wealthy, said Sunyawit Sethapokin, managing director of Blue and White Logistics Group.

Once a quiet city, Yangon has started to experience traffic jams. The government recently slashed tax levies on automobiles, resulting in a deep reduction in car prices. A Toyota Alphard that used to cost Bt5 million, for instance, is now likely to be sold for about Bt700,000.

Before the tax cut, Sunyawit said, there were some 100,000 such vehicles, with a rough average cost of Bt2 million. Assuming that each vehicle is used by five members of a family, there should be at least 500,000 wealthy people in Yangon, he said.

Speaking at the “Logistic Asia 2013” seminar organised by the Thailand Management Association (TMA) on Wednesday, Sunyawit said Myanmar consumers generally prefer Thai goods over Chinese products – especially when it comes to food items such as cooking oil, monosodium glutamate, fish oil and snacks – provided the prices are not too much higher than a Chinese equivalent. However, this preference is offset by the poor roads connecting the two countries, including the main route from the Mae Sot-Myawaddy border crossing to Yangon.

Beaches of southern Myanmar

With or without the development of the Dawei industrial estate project, Sunyawit said the area of southern Myanmar in which the town is located could soon become a new seaside tourist destination for Thais, as it is only about 300 kilometres from Bangkok.

“To enjoy the Andaman Sea, we would no longer have to go to the far South of Thailand,” he said.

Kobsak Pootrakool, executive vice president of Bangkok Bank, told a seminar held by his bank on Tuesday that due to the popularity of Thai goods in Myanmar, some Chinese merchants have affixed fake “Made in Thailand” labels to their goods sold in Myanmar.

Assoc Prof Dr Ruth Banomyong, a logistics and transportation expert from Thamamsat Business School, told the TMA conference that lower logistics costs and sufficient trade volume were the keys to success for regional economic integration. Unfortunately, most of Thailand’s neighbours, as measured by the World Bank’s logistics performance index, have poor transport infrastructure (Cambodia is ranked 101st, Lao 109th and Myanmar 129th).

Another important challenge is institutional frameworks that hinder or delay implementation of transport infrastructure, like government rules and regulations, as well as Article 190 of the Thai Constitution, which says all international and bilateral agreements must go through parliament.