Myanmar Is Giving Developers Ample Reason To Splash The Cash

While the country’s residential sector continues to struggle, a boom in retail in Myanmar is giving developers ample reason to splash the cash.

- George Styllis

When Japanese mall giant Aeon Co. makes a bold bid for a chunk of Southeast Asia’s retail market, it tends to cause a stir. Its tactic of pioneering big expensive malls in emerging economies says a lot about where an economy is at or where it’s heading; so when it launched its first hypermarket in Southeast Asia in Yangon in May the implication was that Myanmar has got serious about shopping.

The 2,800-square-metre store is three times the size of its 14 existing supermarkets in Southeast Asia and has a 70-sqm dining area and a 200sqm home appliance department. The store will also house Aeon’s microfinance arm, which has been driving sales of electrical and luxury items in countries like Cambodia where, for many people, buying a new TV or washing machine outright would require months of saving.

According to Masayasu Isozaki, general manager at Aeon Orange, Myanmar’s retail industry is a well of untapped potential. “There is more room to increase the number of stores in Myanmar, as the country is short of modern retail space,” he told Japanese media.

Other brands, too, appear to share Aeon’s faith in the economy. Last year, Starbucks announced a total investment of USD6 million will be allotted to open 20 outlets. Its first branch, opening at Sule Square Mall in Yangon, adds to a growing list of international brands that have already established themselves in the country. These include Gloria Jeans Coffee, The Coffee Bean and Tea Leaf, KFC, and Krispy Kreme.

As opportunities beckon beyond Yangon, Singapore-listed Yoma Strategic Holdings, the franchisee of KFC, plans to open 70 KFC stores throughout the country over the next five years.