the myanmar consumer survey poised for take-off...foreword 03 poised for take-off 04 the myanmar...

The Myanmar Consumer SurveyPoised for take-offJanuary 2020

Foreword 03

Poised for take-off 04

The Myanmar Consumer Survey 09

1. Overall consumer sentiment 11

2. Spending patterns 14

3. Buying behaviour and brand preferences 20

4. Communication channels 26

5. Buying channels 28

6. Payment 32

Looking ahead 35

Contact us 37

03

ForewordCharacterised by their growing sophistication and penchant for new experiences, the Myanmar consumer is dynamic – and fast-evolving. Over four editions of the Myanmar Consumer Survey, we have observed how the Myanmar consumer has grown in sophistication and discernment, while remaining grounded with a healthy dose of prudent optimism.

In this fourth edition of the consumer survey conducted in Yangon, Mandalay, and Mawlamyine in 2019, we continue to witness a decreasing price sensitivity, and greater demand for discretionary spending. Beyond these constants, however, the survey also revealed a number of new insights that just might change the game for consumer companies.

For a start, the Myanmar consumer continues to demonstrate an openness to new products and services, even as they remain value-conscious in their purchasing decisions. Although this represents the opportunity for companies to introduce new value propositions to the market, the flip side is that investments will need to be made to secure long-term brand loyalty and ensure recall by the consumer: this edition of the survey revealed that several new brands are appearing to gain a foothold in consumer recall, surpassing its competitors with widespread and innovative marketing and promotional campaigns.

Later in this report, we also explore how the Myanmar consumer is increasingly prioritising discretionary spending, and placing an increasing value on connectivity. Specifically, they allocate a significant amount of their expenditure to utilities that will enable them to remain constantly connected, whether it is the mobility of moving from one physical location to another, or staying digitally connected to the Internet.

Finally, we discuss an impending revolution in the digital payments sector that could spark the rapid takeoff of Myanmar’s e-commerce market. Within the span of only a few years, Myanmar’s digital payment services sector has experienced phenomenal growth, and the potential for digital payments to leapfrog card payments in Myanmar’s payments sector is now steadily increasing even as we speak.

We hope that this report will provide you with some insights into the fascinating Myanmar consumer, and the considerations that you will need to make to capture the opportunities as they become ripe for take-off in this dynamic market.

Pua Wee MengConsumer Industry LeaderDeloitte Southeast Asia

04

The Myanmar Consumer Survey | Poised for take-off

Poised for take-off

Economic overviewSince the 2010 General Elections, Myanmar’s Gross Domestic Product (GDP) has been growing at rapid year-on-year rates of about 5-8% (see Figure 1). Overall, GDP per capita reached USD 1,298 in 2017, and the poverty rate dropped from 48% in 2005 to 32% in 20151.

In 2018, however, Myanmar’s economy appeared to have hit a stumbling block. With the ongoing humanitarian crisis in Rakhine state and issues with the restructuring of the banking sector, Myanmar’s short-term growth appears to have stagnated, and its full potential continues to be a moving target2.

Nevertheless, when compared to its regional and global counterparts, Myanmar’s growth prospects appear promising in the medium term (see Figure 2). Heavy investments in infrastructure projects are expected to lift domestic consumption, and drive GDP expansion3. Furthermore, the liberalisation of its financial services sector is expected to increase the presence of foreign players in the retail banking and insurance landscape, and stimulate investment and growth in nascent industries, such as retail and digital commerce.

Myanmar’s economy is at a turning point: in 2018, economic expansion appears to have stagnated following years of rapid growth. Looking ahead to the medium term, however, Myanmar’s prospects remain promising.

1 “Overview”. The World Bank. April 2019. http://www.worldbank.org/en/country/myanmar/overview 2 “2018 Article IV Consultation – Press release”. International Monetary Fund. April 2019. https://www.imf.org/~/media/Files/Publications/

CR/2019/1MMREA2019002.ashx 3 “Economic growth”. The Economist Intelligence Unit. 7 August 2019. http://country.eiu.com/article.aspx?articleid=808348464&Country= Myanmar&topic=Economy&subtopic=Forecast&subsubtopic=Economic+growth&aid=1&oid=898348473

05


Source: Asian Development Bank

2011 2012 2013 2014 2015 2016 2017 2018 2019forecast

2020forecast

6.8%6.8%6.8%

5.9%5.9%

7.0%7.5%

7.3%

8.0%

6.6%

Figure 1: Myanmar’s GDP growth rate (2011-2020)

Figure 2: GDP growth rates for selected regional economies (2018)

Source: Asian Development Bank

-0.60%

2.63%

2.67%

3.02%

3.14%

3.22%

4.13%

4.72%

5.17%

5.53%

6.20%

6.30%

6.59%

6.80%

6.81%

7.08%

7.50%

7.86%

Papua New Guinea

Taiwan

Republic of Korea

Hong Kong

Singapore

Sri Lanka

Thailand

Malaysia

Indonesia

Pakistan

Philippines

Lao PDR

China

Myanmar

India

Vietnam

Cambodia

Bangladesh

06


4 “Private capital needed to fund required infrastructure”. Myanmar Times. 28 March 2019. https://www.mmtimes.com/news/private-capital-needed-fund-required-infrastructure.html

5 “Govt announces ‘project bank’ to get Myanmar building”. Myanmar Times. 31 January 2019. https://www.mmtimes.com/news/govt-announces-project-bank-get-myanmar-building.html

6 “Myanmar passed legislation to protect intellectual property”. The Irrawaddy. 20 February 2019. http://www.mondaq.com/x/782500/Trademark/Myanmar+Passed+Legislation+To+Protect+Intellectual+Property

The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance.

Source: The World Bank

A wave of policy reformsNow in the third of its five-year term, the government, led by the National League for Democracy, is intensifying its push for policy reforms ahead of the 2020 election in a bid to drive greater integration between Myanmar and its regional peers in the ASEAN Economic Community. These transformations are expected to enable Myanmar to better attract foreign capital, and improve its overall business environment: currently, Myanmar ranks 171 out of 190 in terms of the ease of doing business (see Figure 3).

Figure 3: Ease of doing business in Myanmar and selected regional economies (2019)

Several key policy reforms can be observed in the following areas:• Infrastructure: Myanmar’s infrastructure is in dire need of investment, with estimates suggesting that it

could require as much as USD 120 billion until 20304. To that end, the government has developed the Myanmar Sustainable Development Plan (MSDP), which lays out its vision to bridge the infrastructure gap. In line with this, it has also introduced a project bank, a centralised and publicly accessible database that will enable the government to coordinate ministries and departments, and prioritise proposals which are in line with the MSDP5.

• Digital payments: With the objective of introducing and promoting digital payments in Myanmar, the Central Bank of Myanmar is currently working on a standard, codenamed “MMQR”, for QR code payments. When implemented, it is expected that this standard will enable payments to be made through QR codes at local banks and businesses, which will enable Myanmar to take a huge stride towards becoming a cashless society, given that cash remains its most dominant payment method.

• Intellectual property: To strengthen its protection of intellectual property rights for a more conducive business environment, the Myanmar government recently introduced four draft bills covering its trademark, industrial design, patent, and copyright laws6, which are expected to provide a more favourable environment for technology companies, manufacturing firms, and retail businesses, amongst others.

0 100Ease of doing business score

80.60 Malaysia (rank: 15)

67.96 Indonesia (rank: 73)

67.23 India (rank: 77)

63.41 Regional average

51.26 Lao PDR (rank: 154)

44.72 Myanmar (rank: 171)

07


7 “Myanmar electricity rates to soar next month”. Myanmar Times. 25 June 2019. https://www.mmtimes.com/news/myanmar-electricity-rates-soar-next-month.html

8 “Japanese firms to push growth in Myanmar insurance market”. The Irrawaddy. 8 August 2019. https://www.irrawaddy.com/news/burma/japanese-firms-push-growth-myanmar-insurance-market.html

9 “Domestic LPI, Performance: Myanmar 2018”. World Bank. Accessed on 20 August 2019. https://lpi.worldbank.org/domestic/performance/2018/C/MMR

• Electricity tariffs: In July 2019, the government announced significant increases in electricity tariffs in a bid to reduce the high losses it was incurring every year: in Financial Year 2018-2019, this amounted to approximately USD 400 million. This long-awaited move has been welcomed by both local and international investment communities, as the previous tariff rates – the lowest amongst Southeast Asian economies – had been deemed to be financially unsustainable7. By removing a significant amount of subsidies, the government has paved the way for investors to scale up their investments in power generation and distribution, and enable Myanmar to provide a more stable electricity supply to businesses and consumers.

• Insurance sector: Following the introduction of a new policy in early 2019, foreign life and non-life insurers can now form joint ventures with local life and non-life insurers, respectively. As of August 2019, six joint ventures between local firms and foreign firms from Japan and Thailand have been approved for life and general insurance services. In addition, five licenses have been granted to foreign life insurers to operate as wholly-owned subsidiaries8. Such developments are expected not only to promote the growth of the insurance sector in Myanmar, but also attract foreign capital and contribute to job creation.

Improving logistics and connectivityThe overall low efficiency of Myanmar’s logistics infrastructure not only increases the cost of product distribution, which in turn leads to higher retail prices for the consumer, but also creates an economic imbalance across different regions of the country.

In 2018, Myanmar was ranked 137 out of 160 economies on the World Bank’s logistics performance index, in contrast to its neighbours Thailand and Vietnam, which were ranked 32 and 39 respectively9.

To improve Myanmar’s infrastructure and logistics connectivity, the government is collaborating with several investors on infrastructure improvement projects under Build-Operate-Transfer and Public Private Partnership agreements (see Figure 4).

Figure 4: A list of selected ongoing infrastructure improvement projects in Myanmar

Source: Deloitte analysis

Project Myawaddy-Mae Sot Bridge

Yangon-Thanlyin Bridge

Yangon-Dala Bridge

Yangon-Mandalay Rail

Yangon Circular Railway

Yangon Elevated Expressway

Funding organisation

Government of Thailand

Japan International Cooperation Agency

South Korea’s Economic Development Cooperation

Government of Japan

Japan International Cooperation Agency

10 local and foreign companies

Cost USD 126 million

USD 278 million

USD 188 million

USD 3 billion USD 250 million

Not available

Timeline for completion

Completed 2021 2022 2023 2023 Not available

08


The rise of the digital economyAlthough Myanmar’s digital economy remains nascent, its penetration rates for Internet, mobile, and social media have been steadily increasing, and moving closer towards the overall average for Southeast Asian economies (see Figure 5). Currently, Myanmar’s e-commerce market is estimated to be worth about USD 6 million , and is expected to show promising growth on the back of a young and increasingly tech-savvy population, development of more comprehensive logistics networks, and rapid uptake of digital payment solutions.

Figure 5: Myanmar’s Internet, mobile, and social media penetration rates relative to the regional average

Source: ASEAN Studies Centre

39%

105%

39%

63%

129%

61%

Internet penetration rate Mobile penetration rate Social media penetration rate

Myanmar Southeast Asia

10 “Social media in Southeast Asia”. ASEAN Studies Centre. October 2018. https://www.iseas.edu.sg/images/pdf/ASEANFocus%20Oct%202018.pdf

11 “e-Commerce in Myanmar: A rising tide”. Kasikornbank. Accessed on 20 August 2019. https://www.kasikornbank.com/international-business/en/AEC/Intelligence/Pages/201811_Myanmar_Ecommerce_Trend.aspx

09


In the fourth edition of the Myanmar Consumer Survey, we explore some of the consumer behaviour patterns revealed by the recent consumer survey conducted by Deloitte in Yangon, Mandalay, and Mawlamyine in 2019. We examine the overall consumer sentiment and spending patterns, before delving into specific buying behaviours and brand preferences. Later in the report, we also take a look at the Myanmar consumer’s preferred communication and purchasing channels, and explore the potential of digital payments in this promising market.

MethodologyThe survey was conducted in the second quarter of 2019 across 600 households through face-to-face interviews in three major cities: Yangon, Mandalay, and Mawlamyine. Yangon and Mandalay were selected for this survey as they are two of the most populated cities and account for a significant proportion of Myanmar’s GDP, while Mawlamyine was selected for its proximity to Thailand and the accompanying high volume of cross-border trade, which has resulted in consumption patterns that differ significantly from the other two cities.

The respondent sample was constructed to be representative of Myanmar’s overall population in terms of age, gender, monthly household income, education level, and decision-making role. Respondents were surveyed on their spending patterns, buying behaviours, brand preferences, communication channels, buying channels, e-commerce activities, and geographic differences across eight product categories.

The Myanmar Consumer Survey

Product category Examples of sub-categories

Beverages (Alcoholic) • Beer• Whisky• Wine

Beverages (Non-alcoholic)

• Fruit or Vegetable Juices• Ready to Drink Coffee• Ready to Drink Tea• Soft Drinks

Confectionery • Biscuits• Bread• Chocolates• Pastries

Packaged Foods • Breakfast Cereals• Canned Sardines• Instant Noodles

Personal Hygiene Products

• Bath and Shower Products

• Haircare Products• Laundry Products

• Mouthwash• Toothbrushes• Toothpaste

Household Appliances (Major)

• Air-conditioners• Refrigerators• TV Sets• Washing Machines

Household Appliances (Small)

• Clothes• Irons• Fans

• Hair Dryers• Toasters• Vacuum Cleaners

Tobacco • Cigarettes• Cigars


10


Demographics of survey respondents

15-24

25-34

35-49

50-64

Age group, years

30%

30%

25%

15%

Less than 0.2

0.2-0.5

0.5-1

1-1.5

1.5-3

More than 3

Monthly householdincome, MMK million

15%

21%

14%

10%

6%

34%

Age distribution

Source: Deloitte's Myanmar Consumer Survey (2019)

Monthly household income distribution

Gender distributionGeographical distribution

Mandalay

Yangon

Mawlamyine

50%

33%

17%

50%50%


11


1. Overall consumer sentiment

An uplift on the horizonMyanmar’s economic growth rate experienced some stagnation at 6.8% in 2018, and this is expected to fall to 6.6% in 2019, falling short of the World Bank’s estimates of 7-8%12. This dip is reflected in the decrease in the percentage of survey respondents expressing an optimistic sentiment, which fell from 66% in 2018 to 57% in 2019.

Nevertheless, with expectations that the economy will make a recovery following a series of regulatory reforms and investment liberalisation initiatives, the consumer’s future outlook remains upbeat: the percentage of survey respondents expressing an intention to increase their expenditure nearly doubled from last year’s survey, increasing from 8% to 15%. Similarly, the percentage of survey respondents expressing an intention to decrease their expenditure reduced from 33% to 30% (see Figure 6).

Figure 6: Overall consumer sentiment and plan for future expenditure

12 “After 3 years, Suu Kyi running out of time to energize Myanmar economy”. Asian Nikkei Review. 30 March 2019. https://asia.nikkei.com/Politics/After-3-years-Suu-Kyi-running-out-of-time-to-energize-Myanmar-economy

31%

16%

20%

18%

49%

66%

2018 20192017

Question: Do you feel confident that Myanmar’s economy will improve in the next year?

Question: Do you intend to spend more, spend less, or the same in the next year?

DisagreeNeutralAgree

2018 2019

DecreaseNo changeIncrease Unsure

9% 8%

33% 30%

61%

50%47%

34%

8%15%

4%1%

20%

27%

53%

2017

Across all income segments, the Myanmar consumer expects to spend more in the year ahead, revealing an optimism for the future driven by expectations of an economic recovery.

Source: Deloitte's Myanmar Consumer Survey (2019) Source: Deloitte's Myanmar Consumer Survey (2019)

12


13 “The World Bank's latest report on Myanmar: 5 Takeaways on growth and risks”. The Irrawaddy. 17 October 2019. https://www.irrawaddy.com/news/burma/world-banks-latest-report-myanmar-5-takeaways-growth-risks.html

14 “U.N. investigator reports possible fresh war crimes in Myanmar”. Reuters. 3 July 2019. https://www.reuters.com/article/us-myanmar-rights-un/u-n-investigator-reports-possible-fresh-war-crimes-in-myanmar-idUSKCN1TX2JV

15 “Myanmar opens up for foreign retailers and wholesalers”. Myanmar Times. 14 May 2018. https://www.mmtimes.com/news/myanmar-opens-foreign-retailers-and-wholesalers.html

16 “Myanmar Economic Monitor June 2019”. The World Bank. 17 June 2019.17 “Foreign investment by sector”. Directorate of Investment and Company Registration. 30 June 2019. https://www.dica.gov.mm/sites/dica.

gov.mm/files/document-files/fdisector.pdf

Maintaining momentumMyanmar needs to tackle a multitude of socioeconomic and political issues to achieve and maintain its near-term growth momentum. Currently, the economy is struggling with trade and fiscal deficits, as well as high inflation rates due to volatility in fuel and food prices13. The lack of infrastructure also continues to pose operational risks for potential investors, in addition to the mounting international pressure stemming from the ongoing border conflict14.

Still, the prospects are promising: the government’s recent efforts to restructure its economy with the launch of the MSDP and monetary policy reforms ahead signal a strategic shift towards a more intensified focus on attracting foreign investment and stimulating economic growth.

For instance, the Myanmar Companies Law enabled foreign investors to acquire a stake of up to 35% in local companies, as well as 100% ownership in retail and wholesale companies15. Given these developments, the retail and wholesale segment is expected to drive GDP growth within the services sector, which contributed to 42% of GDP in 2018, and is expected to grow at a rate of 8.3% in 201916.

Myanmar also seems poised to become a regional, low-cost production powerhouse, with a growing manufacturing sector that is now worth USD 11 billion, second only to its oil and gas and power sectors, which accounted for the majority of permitted foreign investment at 53.9%17.

13


A growing middle income segmentIn comparison to the results of the 2018 survey, monthly household expenditure in low and middle income segments have increased signficantly. Of these two groups, the middle income segment appears to hold the most real growth potential: although survey respondents in the low income segment spend an increased proportion of their monthly household income, this is likely due to the impact of the hike in basic commodity prices on daily essentials, rather than a real increase in consumption. In contrast, the high income segment has opted to save more, with about 90% of survey respondents in this segment spending only half of their monthly household income (see Figure 7).

Overall, however, survey respondents across all income segments expect to spend more in the year ahead (see Figure 8). This represents a marked turnaround in sentiment from the previous edition of the survey, where most survey respondents indicated plans to either maintain or spend less in the year ahead. Looking forward, the middle income and high income segments are likely to remain the main drivers of retail spending, and the target market for the influx of new and diverse products and services in Myanmar’s consumer industry.

Figure 7: Monthly household expenditure by monthly household income level

0.5-1.00.2-0.5Less than 0.2Low income Middle income

Monthly household income, MMK millionHigh income

1.0-1.5 1.5-3.0 More than 3.0

29%21% 21%

9%

29%

69%

2% 2%

69%

52%

50%

57%

39%

10%

25%

37%

29% 24%

11%5% 8%

Less thanMMK 0.06 million

Question: Which of the following best represents your total monthly household expenditure?

MMK 0.06-0.15 million

MMK 0.15-0.3 million

MMK 0.3-0.5 million

MMK 0.5-1.0 million

More than MMK 1.0 million

2%


Figure 8: Plan to vary the current level of spending by monthly household income level

0.5-1.00.2-0.5Less than 0.2Low income Middle income

Monthly household income, MMK millionHigh income

1.0-1.5 1.5-3.0 More than 3.0

Decrease

Question: Which of the following best represents your total monthly household expenditure?

No change Increase Unsure

8% 11% 10% 5%

24%10%16%

11%18%

23%

55%

50% 36% 48% 56%55%

21%32% 37% 31% 23%

17%

2%


14


2. Spending patterns

Demand soars for discretionary spendingThere appears to be a general trend towards greater discretionary spending, as the burgeoning young and middle income consumers increase their demand for non-essential goods, such as brand-name clothing and organic foods18. As a result, there has been a slight dip in the overall allocation of monthly household expenditure to essential items in product categories such as Confectionery and Packaged Foods, as well as, to a lesser extent, Alcoholic Beverages and Tobacco.

There are, however, slight nuances to this. For instance, survey respondents in the low income segment have increased their expenditure on Confectionery, Packaged Goods, and Personal Hygiene Products, while respondents in the middle and high income segments have increased their expenditure on Alcoholic Beverages, with up to 10% of them allocating MMK 100,001-150,000 to this product category (see Figure 9).

Figure 9: Household spending by monthly household income level and product category (2018-2019)

The Myanmar consumer is prioritising discretionary spending on non-essential goods, and placing an emphasis on services that will enable them to remain constantly connected.

18 “Growth of incomes and Myanmar’s young population drive demand for nonessential goods”. Oxford Business Group. 2019. https://oxfordbusinessgroup.com/overview/buyers%E2%80%99-market-expanding-young-population-and-rising-incomes-drive-demand-non-essential-goods

14%

8%

8%

7%

13%

8%

9%

4%

8%

7%

16%

7%

9%

18%

73%

5%

4%77%

2%5%

2%

2%

3% 3%

1%

55%

67%

81% 4%

65%

5%4%

4%

34%

69%

64%8%

8%

7%

49%

52%

43%

45%

20%

28%

27%

36%

5%

14%

12%

7%1%

2%

1%12%3%

16%

3%8%

11%

18% 66%

52%

45%

44%4%

34%

21%

24%

22%

35%

29%

37%

2%

20%

19%

24% 3%

9%1%

2%

14%

13%

10%

1%

5%

5%12%

12%

5%11%

71%

64%

63%

61%

47%

32%

18%

23%

29%

47%

2%

16% 11%

10%

3%14%

5%

1%2%

8%

2%

7%17%10%

7%

12%3%

11%

3%

78%

62%4%

4%

41%6%

45%

31%

28%

35%

38%

34%

47%

3%

26%

24%

1%

6%15%3%

2%16%

1%12%

7%

2%

8%13%

15%

12%

12%

19%

7%

13%

12%

16%

8%

84%

81%

4%80%

5%

2%

2%

79%

3%

76%

4%65%


Beverages(Non-alcoholic)

Beverages(Alcoholic)

Confectionery TobaccoPackaged Foods Personal HygieneProducts



Confectionery TobaccoPackaged Foods Personal HygieneProducts

0.2-0.5

0.5-1

1-1.5

Less than 0.2

1.5-3

More than 3

0.2-0.5

0.5-1

1-1.5

Less than 0.2

1.5-3

More than 3


Question: How much did you spend in previous month for the following categories?

None Less than MMK 10,000 MMK 10,000-20,000 MMK 20,001-50,000 MMK 50,001-100,000 MMK 100,001-150,000

2019

2018

16%

10%

11%

12%

13%

14%

19%

16%

11%

2%

14%

17%

14%

18%

2%

9%

13%

10%

5%

56%

57%

67%

64%

50%3%

1%

5%

55% 7%

2%

1%

5%

87%

49%

3%

75%

58%

42%

36%

18%

1%

21%

31%

52%

63%

12%

3%

9%

10%

1%10%

2%16%

2%

31%

79%

64%

41%

44%

48%

21%

23%

36%

37%

47%

2%

26%

3%

8%

12%

17%

4%

2%

5%

8%2%

13%

3%

3%

7%

13%

5%

84%

76%

62%

63%

57%

34%

24%

27%

36%

47%

9%

2%

14%

2%

14%

2%

2%11%

7%2%

3%

5%8%

28%

21%

86%

71%

50%

44%

41%

55%

9%

24%

40%

43%

28%

1%

2%

2%

2%

16%

5%

4%

10%

1%

6%4%2%

1% 3%

8%

35%

39%

46%

37%

36%

16% 18%

64%

52%

3%63%

10%

59%

43%

2%

8%

3%59%

14%

5%

5%

0%


15


Connectivity is keyWhether offline or online, survey respondents prioritise the allocation of their expenditure on utilties that will enable them to remain connected. For instance, they spend between half to three-quarters of their expenditure on Transportation, and Internet Services (see Figure 10).

Transportation services, in particular, have witnessed substantial growth with the introduction of ride-hailing mobile applications. For instance, the Grab mobile application has been downloaded over 2 million times, and its daily bookings have risen by 30% since last June. Grab continues to provide other auxiliary services within its mobile application, including long-distance travel services, hotel booking services, and payment services19. With major national infrastructure projects on the way, the focus on transportation services is likely to continue to grow.

In terms of Internet Services, Facebook appears to be dominant channel in Myanmar, with many businesses choosing to promote their presences solely on Facebook – eschewing other traditional online storefronts, such as websites. On YouTube, the most popular channels in Myanmar are DVB, Eleven, and 7 Days, with combined total views of more than 450 million20.

Another important observation is also the fact that monthly household expenditure on Leisure & Entertainment are nearly on par with Healthcare and Education. This is not surprising, given the proliferation of a range of different entertainment services competing for their attention, from modern cinema facilities to subscription services such as Netflix. Interesting, however, expenditure on Fitness/Wellness remains low, highlighting an untapped potential in the health conscious movement.

Figure 10: Monthly household expenditure by service category

19 “Grab sees higher growth with more services in Myanmar”. Eleven Myanmar. 16 June 2019. https://elevenmyanmar.com/news/grab-sees-higher-growth-with-more-services-in-myanmar-asianewsnetwork

20 “Myanmar’s digital game changers”. Myanmar Times. 6 March 2019. https://www.mmtimes.com/news/myanmars-digital-game-changers.html


0.2-0.5

0.5-1

1-1.5

Less than 0.2

1.5-3

More than 3

Question: How much did you spend in previous month for the following categories?

1%1%

InternetServicesTransportation Delivery Fitness/

Wellness Healthcare

39%

24%

22%

24%

19%

19%

24%

24%

1%

53% 12%11%

9%

5%

8%45%

7%

13%

4%

38%

11%48%

66%

42%

8%

7%12%

8%

2%

3%

3%

3%

6%

3%

3%

3%

2%

4%

8%

1%

1%

98% 2%

1%

95%

92%

91%

1%88%

2%

87%

10%

9%

11%

15%

17%

14%

18%

2%

1%

3%5%

60%

65%

3%

3%

6%

58%

4%

2%

6%

5%6%

10%

7%

4%

76%

4%7%62%

83%

2%6%5%

7%

3%

10%

8%

5%

6%

8%

2%

6%

2%

1%

1%

1%

8%

1% 1%

1%

5%

1%

2%94%

3%

1%3%84%

77%

2%

3%

2%

4%

2%4%3%

81%

2%

3%

1%

2%2%84%

74%

62%

42%

39%

43%

38%

47%

24%

28%

27%

27%

21%

31%

21%

1%

2%

3%

5%

1%

20%

17%

4%9%

9%

18%

12%14%

17%10%

5%

4%

8%

4%

3%

3%

2%

5%

3%

1%

93%

2%

1%

1%

2%

97% 1%

98%

2%

1%93%

90%

87%

18%

11%

8%

8%

10%

7%

7%

16%

10%

1%

1%

3%

1%

1%

3%

1%

1%

1%

2%

2%

2%

2%6%

3%

5%

60%

3%

3%

2%

1%

4%

66%

6%61%

74% 3%

76%

6%

3%7%3%

3%

5%

3%5%68%

1%

1%

15%

18%

1%

2%

1%

2%

1%1%

2%

10%3%

10%4%82%

6%

5%2%

73%

76%

4%

5%50%

3%

2%10%

11%

5%2%

5%

62%

4%

5%

10%4%

3%12%5% 5%

12%55%

5%3%

PaymentSolutions Education

NoneLess than MMK 10,000 MMK 20,001-50,000

MMK 10,000-20,000 MMK 50,001-100,000 MMK 500,001-1,000,000MMK 100,001-150,000

MMK 100,001-300,000MMK 300,001-500,000

Leisure &Entertainment

1%


16


Openness to new products and servicesSurvey respondents continue to demonstrate an openness to new products, particularly in the product categories of Non-Alcoholic Beverages, Packaged Foods, and Personal Hygiene Products. Of note is also the fact that they seem to be more curious about new products than new services. They do, however, appear to be more willing to try out new services in the service categories of Leisure & Entertainment, Payment Solutions, and Internet Services.

One contributing factor for this could be the increasing number of options in the market: Myanmar consumers can now choose between service packages offered by four telecommunications operators and over 140 licenced Internet Service Providers21. At the same time, although card payments currently account for only 5% of total retail industry revenue22, a number of different banks, payment service providers, and telecommunications players are introducing alternative forms of digital payment services. Currently, the market leader appears to be Wave Money, which is leading the market with a remittance volume of USD 1.3 billion, or about 2% of Myanmar’s GDP23.

Ultimately, however, consumers are still very value-conscious, and prioritise factors such as lower prices, better taste or flavour, and word-of-mouth reputation in their decision to try new products and services. In a similar vein, higher prices and the lack of quality assurances were ranked as particularly undesirable factors, illustrating the high price elasticity of demand for basic consumer goods (see Figure 11).

Figure 11: Number of survey respondents who tried new products and services

21 “Growth of mobile and internet usage make Myanmar ICT more competitive”. Oxford Business Group. 2019. https://oxfordbusinessgroup.com/overview/tech-transformation-mobile-and-internet-usage-rise-sector-set-expand-and-become-more-competitive

22 “Daw Win Win Tint, CEO and Founder, City Mart Holding: Interview”. Oxford Business Group. 2019. https://oxfordbusinessgroup.com/interview/convenient-consumption-daw-win-win-tint-ceo-and-founder-city-mart-holding-investment-opportunities

23 ‘Wave Money sees higher demand for its mobile money services.” Myanmar Times. 1 March 2019. https://www.mmtimes.com/news/wave-money-sees-higher-demand-its-mobile-money-services.html

Packaged FoodsBeverages(Non-alcoholic) TobaccoConfectionery

PersonalHygiene

Products

HouseholdAppliances

(Major)

HouseholdAppliances

(Small)

Question: In the last year, did you purchase any of the following new products and services?

PaymentSolutions Delivery Education Leisure and

Entertainment InternetServices

Fitness/Wellness Healthcare

Serv

ices

Prod

ucts

Question: What are the reasons to try/not try new products and services?

Top reasons to try

1. Better taste/flavour (n=356)2. Lower price (n=338)3. Recommendation from friends/family (n=247)

1. Higher price (n=295)2. Poor quality assurance (n=276)3. Unaware of new products/services (n=272)

Transportation


Yes No

Top reasons to not try

91

509

292

308

273

327

297

303

290

310

55

545

88

512

55

545

93

507

17

583

109

491

127

473

156

444

11

589

90

510

58

542


17



(n=292)

Packaged Foods(n=297)


(n=290)

Total monthlyhousehold income Gender Location Age groupProducts/

Services

Leisure &Entertainment

(n=109)

Payment Solutions(n=127)

Internet Services(n=156)

15-24: 52%

25-34: 52%

35-49: 49%

50-64: 40%

Yangon: 45%

Mandalay: 52%

Mawlamyine: 58%

Male: 45%

Female: 54%

Less than 0.2: 42%

0.2-0.5: 52%

0.5-1: 52%

1-1.5: 51%

1.5-3: 48%

More than 3: 47%

15-24: 59%

25-34: 47%

35-49: 46%

50-64: 36%

15-24: 51%

25-34: 48%

35-49: 48%

50-64: 44%

Less than 0.2: 45%

0.2-0.5: 50%

0.5-1: 50%

1-1.5: 55%

1.5-3: 43%

More than 3: 42%

Less than 0.2: 41%

0.2-0.5: 49%

0.5-1: 48%

1-1.5: 54%

1.5-3: 47%

More than 3: 55%

Yangon: 38%

Mandalay: 57%

Mawlamyine: 65%

Yangon: 43%

Mandalay: 50%

Mawlamyine: 61%

Male: 47%

Female: 50%

Male: 44%

Female: 53%

Male: 27%

Female: 25%

Male: 21%

Female: 22%

Male: 18%

Female: 19%

Yangon: 20%

Mandalay: 31%

Mawlamyine: 31%

Yangon: 11%

Mandalay: 28%

Mawlamyine: 20%

Yangon: 25%

Mandalay: 11%

Mawlamyine: 31%

Less than 0.2: 20%

0.2-0.5: 22%

0.5-1: 27%

1-1.5: 27%

1.5-3: 40%

More than 3: 37%

Less than 0.2: 11%

0.2-0.5: 18%

0.5-1: 25%

1-1.5: 29%

1.5-3: 22%

More than 3: 34%

Less than 0.2: 9%

0.2-0.5: 14%

0.5-1: 20%

1-1.5: 30%

1.5-3: 21%

More than 3: 26%

15-24: 32%

25-34: 30%

35-49: 21%

50-64: 14%

15-24: 17%

25-34: 27%

35-49: 21%

50-64: 18%

15-24: 23%

25-34: 20%

35-49: 13%

50-64: 12%

In this edition of the survey, we also found that survey respondents from Mawlamyine seem to be more open to new products and services than their counterparts in Yangon and Mandalay, except in the Leisure & Entertainment category where Mandalay respondents have topped the charts for two consecutive years. In terms of demographics, Millennials and Generation Z survey respondents appear to be the most adventurous, especially in categories such as Non-Alcoholic Beverages, Packaged Foods, Personal Hygiene Products, Internet Services, and Leisure & Entertainment (see Figure 12).

Figure 12: Breakdown of survey respondents who have tried new products and services in the past year


18


New traditionsWatching TV/movies, shopping, surfing the Internet, and reading are the top holiday activities for survey respondents (see Figure 13). Myanmar’s film and cinema industry, in particular, is experiencing impressive growth: the number of moviegoers jumped from about 300,000-600,000 in 2017 to a whopping 1.3 million in 201824. With the rise of modern retail complexes and new city projects, Myanmar is set to witness the introduction of a whole new range of retail facilities that combine modern shopping experiences with innovative entertainment amenities.

These activities are likely to be the most appealing for higher income consumers, who tend to possess more disposable income for such activities. In terms of demographics, Millennial survey respondents also tend to spend more time and money on the Internet, where they watch TV/movies, engage in online shopping, and read articles, while older survey respondents tend to prefer more traditional shopping activities (see Figure 14). Figure 13: Top holiday activities cited by survey respondents

24 “Growing moviegoers: A stimuli to retailtainment”. Colliers International. 29 April 2019. https://www.colliers.com/-/media/files/marketresearch/apac/myanmar/colliers_myanmar_retail_q1_2019.pdf?la=en-gb

Going to the cinema

Shopping

Surfing the Internet

Eating out

Attending concerts/gigs

Visiting friends and family

Reading

Visiting markets

96%

Visiting parks

Travelling domestically

Playing sports

Doing art

Visiting amusement parks

3%

7%

2%

1%

1%

1%

Going for a spa

Participating in learning activities

Watching TV/movies

Travelling internationally

87%

82%

12%

12%

79%

29%

23%

22%

21%

14%

Question: On your days off, which of the following activities do you engage in?


19


Figure 14: Breakdown of survey respondents for the top four holiday activities

Shopping(n=521)

Watching TV/movies(n=574)

Surfing theInternet(n=156)

15-24: 98%

25-34: 99%

35-49: 93%

50-64: 90%

15-24: 86%

25-34: 86%

35-49: 87%

50-64: 90%

15-24: 91%

25-34: 91%

35-49: 75%

50-64: 54%

Male: 96%

Female: 96%

Male: 79%

Female: 95%

Male: 87%

Female: 76%

Yangon: 94%

Mandalay: 96%

Mawlamyine: 99%

Yangon: 86%

Mandalay: 85%

Mawlamyine: 94%

Yangon: 83%

Mandalay: 83%

Mawlamyine: 75%

Less than 0.2: 96%

0.2-0.5: 94%

0.5-1: 97%

1-1.5: 94%

1.5-3: 100%

More than 3: 100%

Less than 0.2: 80%

0.2-0.5: 88%

0.5-1: 91%

1-1.5: 82%

1.5-3: 88%

More than 3: 95%

Less than 0.2: 73%

0.2-0.5: 76%

0.5-1: 83%

1-1.5: 89%

1.5-3: 88%

More than 3: 97%

Total monthlyhousehold income Gender Location Age groupProducts/

Services


20


3. Buying behaviour and brand preferences

The Myanmar consumer is exhibiting decreasing levels of price sensitivity, a dynamic and shifting brand loyalty, and increasing levels of health consciousness in their consumption patterns.Decreasing price sensitivitySeveral important shifts could be observed from this year’s survey results. Across all product categories, the importance of Price has decreased in importance by approximately 4%, while Taste has increased in importance. Overall, survey respondents appear to have become less price sensitive, prioritising Taste and Quality as the most important factors in their purchasing decisions.

This trend can be observed even in Tobacco, where survey respondents are prioritising Taste and Smell over factors such as Access and Price, a marked shift from last year’s results, where Price was the most important consideration. Similar, but subtler, trends can also be observed in the Household Appliances categories, where Durability and Technology factors are accorded more importance than Price (see Figure 15).

One contributing factor for this decreasing price sensitivity could be the increase in foreign investments and rapid growth of foreign brand franchises in Myanmar’s consumer market25. These developments have in turn led to higher employment rates in services and manufacturing sectors, especially in urban areas, resulting in higher consumer spending power and reduced price sensitivity.

Figure 15: Top three purchasing consideration factors across product categories

25 “FPI jumps 77pc to US$ 2.3 billion in first half of 2019”. Consult Myanmar. 7 August 2019. https://consult-myanmar.com/2019/08/07/fdi-jumps-77pc-to-us2-3-billion-in-first-half-of-2019/

2019



Confectionery

PackagedFoods

Tobacco

PersonalHygiene Products

2018Question: What are the top three influencing factors when you choose a certain product/brand?

TasteQuality

Price

TastePriceSmell

TastePriceSmell

TastePriceSmell

QualitySmellPrice

TastePriceSmell

TastePriceSmell

PriceQuality

Availability

QualitySmellPrice

DurabilityTechnology

Price


Price


Price

DurabilityPrice

Technology

QualitySmellPrice

TastePrice

Quality

TastePrice

Quality

23%16%

15%28%

20% 28%

25%26%

18%17%17%

20%20%

17%

16%15%

19%

19%18%

20%20%20%

16%

13%

19%15%

20%17%

25%19%

15%15%

15%

22%19%

17%

29%

28%

15%15%14%

16%27%

15%16%

27%

15%15%

HouseholdAppliances(Major)



21


Shifting brand loyaltyBrands in several product categories, such as Beverages, Household Appliances, and Tobacco, continue to enjoy strong brand loyalty from survey respondents. This loyalty, however, can be quite dynamic: while brand loyalty decreased slightly in product categories such as Alcoholic Beverages since the previous edition of the survey, it also showed significant increases in Household Appliances and Tobacco.

Three brands dominate recall: Myanmar Beer, Yum Yum, and Red Ruby continue to hold top positions in the product categories of Alcoholic Beverages, Packaged Foods, and Tobacco respectively. The percentage of survey respondents citing these brands have also increased across the board by 19% for Myanmar Beer, 5% for Yum Yum, and 12% for Red Ruby. This year, however, two brands appear to be gaining a foothold: Speed energy drink, having invested in widespread local marketing and promotional campaigns, emerged as the top brand in the Non-Alcoholic Beverages category, and Family Care clinched the top spot in the Personal Hygiene Products category (see Figure 15)

Figure 16: Top brands by product category

Question: Please list up to three brand names that you purchase.

36%

66%

70%

37%

72%

51%61%

20%

12%

9%8%

8%

8%

18%6%

9%

12% 9%

14%

9%

11%

16%

7%

13% 13%

42%

11%

10%

22%

55%

44%

21%

First

Others

Second

Third

Beverages (Alcoholic)

Beverages (Non-

Alcoholic)

Confectionery Packaged Foods


Household Appliances

(Major)

Household Appliances

(Small)

Tobacco

First Myanmar Speed Pucci Yum Yum Family Care Samsung National Red Ruby

Second Tiger Max Plus Shwe Kyee MAMA Lux Toshiba Panasonic Mevius

ThirdGrand Royal

Shark Good Morning Shin Shin Pond'sLG

Philips Ngwe NagarAndaman Gold Sony


22


Survey respondents generally prefer Foreign brands in the Personal Hygiene Products and Household Appliances categories if they can afford them. This could be due to the fact that Myanmar imports the majority of products in these categories from neighbouring countries such as China, India, Malaysia, Singapore, and Thailand26. When it comes to Beverages, Confectionery, Packaged Foods, and Tobacco, however, survey respondents continue to prefer Local brands (see Figure 17).

Overall, there has been a marked increase in the preference for Foreign brands since the previous edition of the survey. This is an observation that is not surprising, given the continuous influx of Foreign brands into Myanmar’s consumer market27. This trend is especially pronounced in more urban regions, such as Yangon and Mandalay, than in more rural areas like Mawlamyine (see Figure 18).

Figure 17: Preferences for Local and Foreign brands by monthly household income level


Figure 18: Foreign and Local brand preferences by city

26 “Burma - Consumer Goods”. Export.gov. 29 November 2018. https://www.export.gov/article?id=Burma-Consumer-Goods27 “Burma - Franchising”. Export.gov. 29 November 2018. https://www.export.gov/article?id=Burma-prospects-franchising

Question: Which type of brands do you prefer?

Local Foreign


Beverages(Non-alcoholic) Confectionery Packaged

FoodsPersonal Hygiene

Products

HouseholdAppliances

(Major)

HouseholdAppliances

(Small) Tobacco

70%

79%

69%

71%

60%

70%

72%

30%

31%

29%

40%

30%

28%

21%

74%

86%

74%

72%

71%

72%

66%

26%

26%

28%

29%

28%

34%

14%

87%

94%

85%

85%

89%

81%

89%

13%

6%

15%

15%

11%

19%

11%

69%

84%

65%

72%

67%

62%

66%

31%

35%

28%

33%

38%

34%

16%

49%

68%

45%

44%

52%

43%

42%

51%

32%

55%

56%

48%

57%

58% 100%

92%

89%

91%

94%

90%

93%

11%

8%

9%

7%

6%

10%

100%

89%

83%

89%

90%

89%

90%

11%

17%

10%

11%

11%

10%

73%

70%

82%

80%

65%

79%

50%

27%

30%

35%

50%

18%

20%

21%

0.2-0.5

0.5-1

1-1.5

Less than 0.2

Overall

1.5-3

More than 3


Local Foreign




Products

HouseholdAppliances

(Major)

HouseholdAppliances

(Small) Tobacco

Yangon

Overall

Mandalay

Mawlamyine

Question: Which type of brands do you prefer?

70%

63%

78%

77%

30%

37%

23%

22%

74%

70%

83%

71%

26%

30%

29%

17%

87%

83%

91%

93%

17%

13%

10%

7%

69%

63%

81%

63%

31%

37%

37%

19%

49%

42%

54%

60%

51%

58%

46%

40%

92%

94%

89%

94%

8%

6%

12%

6%

89%

91%

87%

88%

11%

9%

14%

12%

73%

64%

79%

91%

27%

36%

21%

9%


23


In terms of Foreign brands, survey respondents appear to prefer Japanese, Korean, and Thai brands. Korean brands, in particular, are quickly gaining popularity in the Beverages and Confectionery product categories (see Figure 19 and 20). One reason for this could be the proliferation of Korean franchises in Myanmar, such as the opening of Pizza Maru and Tom N Toms Coffee outlets, as well as the influence of Korean celebrities and pop culture from the media as on-demand streaming apps featuring Korean dramas, such as VIU, gain popularity across Myanmar28.

Figure 19: Breakdown of Foreign brand preferences by monthly household income level


Figure 20: Breakdown of Foreign brand preferences by city

28 “Realising digital Myanmar”. Telenor Report. 6 February 2018. https://www.telenor.com/wp-content/uploads/2018/02/Telenor-Realising-Digital-Myanmar-Report-06-February.pdf




Products

HouseholdAppliances

(Major)

HouseholdAppliances

(Small) Tobacco

0.2-0.5

0.5-1

1-1.5

Less than 0.2

Overall

1.5-3

More than 3


21%

13%

23%

27%

7%

23%

27%

24%

23%

28%

27%

30%

22%

20%

12%

7%

17%

19%

13%

17%

13%

7%15%19%

17%

10% 17%

20%

17%

20%20%

17%

20% 11%

11%

6%

11%11%

13%13%13%

Question: Which Foreign brands do you find the most appealing?

26%

23%

28%

24%

22%

27%

28%

24%

21%

21%

23%

23%

21%

24%

24%

27%

21%

1%

13%

13%

8%

13%10%

13%18%

20%8%

10%

17%

15%

8%

9%18%

11%9%

8%

10%11%

10%10%

18%10%

3%

26%

28%

29%

28%

26%

25%

22%

28%

22%

26%

21%

25%

2%

12%

17%

19%12%18%

8%

6%

18%

12%

15%

7%

17%6%

13%19%

17%

19%

13%

18%

6%

11%4%

18%9%

15%

17%8%

8%17%

14%

27%

31%

28%

26%

26%

24%

26%

22%

25%

21%

24%

22%

24% 13%

21%

25%

24%

23%

2%

20%

18%

10% 10%

11%

9%

2%

7%7%

13%

13%12%

20%8%

11%

7%10%

8%

9%11%

15%15%18%

3%

28%

24%

29%

28%

28%

27%

27%

21%

23%

22%

21%

23%

22%

21%

23%

26%

27%

11%

9%8%11%

12%9%7%

8%13%

9%11%

8%

9%

8%

12%

9%11%

12%

18%

19%

10%

9%

18%

19%

8%

26%

27%

27%

24%

27%

25%

26%

30%

31%

30%

30%

29%

28%

27%

14%

8%

13%

11%

15%

11%

7%

10%6%

13%

16% 5%14%

18%

17%

6%

7%

14%

7%16%

14% 9%15%

8%

11%

7%

9%

27%

27%

28%

25%

28%

25%

25%

30%

31%

29%

30%

29%

31%

27%

15%10%

6%12%

14% 5%10%

16% 6%11%

17% 5%13%

14%

14% 8%11%

17% 6%13%

10%13%

10%

12%

9%

10%

8%

11%

24%

22%

11%

23%

22%

33%

27%

22%

28%

33%

23%

33%

22%

22%

33%

15%

11%

17%10%

11%

12%

13%

11%11%

17%6%

7%

17%

20%

12%

13%

8%

13%

15%12%9%

11%11%11%

8%17%

Thai Chinese Korean Japanese European American Others




Products

HouseholdAppliances

(Major)

HouseholdAppliances

(Small) Tobacco

Yangon

Overall

Mandalay

Mawlamyine 33%

23%

24%

22%

21%

15%

19%17%

16%

19%

7%

19%

17%

14%

5%

11%

13%19%

19%13%

17%

17%

17%6%

26%

23%

25%

33%

22%

23%

23%

22%

25%

10%

8% 13%

11%

10%

14%

20%

20%

17%

9%

12%10%

11%

7%

6%

26%

26%

28%

29%

24%

1%

19% 12%

18%

12%

12%18%

12%

15%

19%

18%

10%

14%

9%

18%14%

14%

5%14%

14%

27%

25%

27%

32%

22%

24%

25%

22%

22%

26%

8%

1%

10%

10%

9%

10%

10%9%

6%

19%15%

11%

8%15%

7%

28%

27%

29%

31%

21%

21%

22%

22%

25%

25%

11%

11%

8%

9%

9%

11%

6%

20%10%

10%

5%

3% 15%

20%

26%

23%

28%

31%

30%

30%

29%

30%

8% 13%

15% 7%

12%

9%

5%

16%

10%

13%

16%

8%

19%

4%11%

5%

27%

25%

28%

31%

30%

30%

29%

29%

15%

11%

10%

16%

16%

9%

9%

9%

4%

13%

12%

6%

13% 3%

18%

6%23%

22%

22%

33%

23%

24%

22%

17%

19%

10%

18%

12%

15%

17%

15% 11%

19%

10%

4%15%

17%

0%17%

17%

Question: Which Foreign brands do you find the most appealing?

Thai Chinese Korean Japanese European American Others


24


Growing health consciousnessWith greater access to health information through social network and mobile applications29, Myanmar consumers appear to be making more informed decisions when purchasing products and services. For instance, survey respondents showed an increased health consciousness, with 86% of them indicating that they would prefer to drink water, instead of sugary drinks, when they are perspiring (see Figure 21). This is a significant increase from last year’s survey, where this figure was 67%.

Health consciousness also appears to be more prevalent amongst survey respondents between the age of 50-64 years and those with a monthly household income level of more than MMK 3 million (see Figure 22). In terms of the awareness and consideration of health information, however, survey respondents tend to focus on expiry dates, prioritising this over other information such as calorie content and sugar content (see Figure 23).

Figure 21: Health consciousness in food, beverage, and leisure choices


Figure 22: Breakdown of demographics for survey respondents choosing healthy options

For my daily meals

I am not too conscious about eating oily food

I will consume carbonated drinks, energy drinks, or other sweetened drinks

I will go for drinks, or dine out with my friends

I will consume water, unsweetened tea, or isotonic drinks

I will swim, work out, run, or walk

1 2 I have only two hours of freetime after work, so

3I am perspiring, so

I try to avoid oily and salty food

400

200

446

154

85

515

403

197

403

n = 515

197

20192018

20192018

20192018

304

296

305

295

I will consume water, unsweetened tea, or isotonic drinks

(n=515)

I will swim, work out, run, or walk

(n=304)

I will try to avoid oily and salty food

(n=400)

15-24: 78%

25-34: 86%

35-49: 91%

50-64: 93%

15-24: 34%

25-34: 46%

35-49: 61%

50-64: 76%

15-24: 54%

25-34: 66%

35-49: 77%

50-64: 78%

Less than 0.2: 85%

0.2-0.5: 86%

0.5-1: 85%

1-1.5: 86%

1.5-3: 83%

More than 3: 92%

Less than 0.2: 51%

0.2-0.5: 53%

0.5-1: 51%

1-1.5: 45%

1.5-3: 52%

More than 3: 47%

Less than 0.2: 62%

0.2-0.5: 67%

0.5-1: 73%

1-1.5: 64%

1.5-3: 57%

More than 3: 74%

Yangon: 83%

Mandalay: 90%

Mawlamyine: 85%

Yangon: 44%

Mandalay: 51%

Mawlamyine: 70%

Yangon: 62%

Mandalay: 70%

Mawlamyine: 74%

Male: 87%

Female: 85%

Male: 51%

Female: 50%

Male: 66%

Female: 67%

Total monthly household income Gender Location Age group


25


Figure 23: Awareness and consideration of health information

30 “Digital Economy Association to license online shops”. Myanmar Business Today. 19 June 2019. https://www.mmbiztoday.com/articles/digital-economy-association-license-online-shops

524

289

238

202

154

571

266

204

163

136

58

236

240

273

287

20

283

330

349

372

18

75

122

125

159

51

66

88

92

0

2019 2018

Expiry date

Product content

Nutritional values

Sugar content

Calorie content

I seriously consider the information before purchasing.

I am aware of the information but do not consider it seriously.

I am not aware of the information.

Digital product discovery yet to take offOverall, survey respondents conduct more research before purchasing products than services. For the purchase of both products and services, however, offline channels remain the dominant source of information. Even when survey respondents conduct online research, they tend to rely predominantly on company websites, rather than social media channels (see Figure 24).

This behaviour suggests that consumer companies may need to adopt a more holistic approach in building credible online presences beyond social media, especially in view of the Digital Economy Association’s upcoming move to regulate unlicensed online shops, typically with storefronts on social media channels such as Facebook30.

Figure 24: Sources of information for the purchase of products and services


Question: Do you look up information prior to purchasing a product?

Question: Which sources do you use to look up information on products? (n=344)

Question: Which sources do you use to look up information on services? (n=232)Question: Do you look up information prior to purchasing a service?

Yes344

Yes232

No256

No368

Company websites

Company socialmedia accounts

Influencers

Customer reviews

Friends/Relatives

Store visits

Print media

Product catalogues

Customer hotlines

Online Offline

Online Offline

32%

Company websites

Company socialmedia accounts

Influencers

Customer reviews

Friends/Relatives

Store visits

Print media

Product catalogues

Customer hotlines

30%

19%

19%

73%

72%

44%

16%

6%

3%

67%

13%

6%

2%

22%

16%

12%

12%


26


4. Communication channels

31 “Myanmar’s digital game changers”. Myanmar Times. 6 March 2019. https://www.mmtimes.com/news/myanmars-digital-game-changers.html32 “MyTel anticipating 5G rollout next year if granted licence”. Myanmar Times. 21 August 2019. https://www.mmtimes.com/news/mytel-

anticipating-5g-rollout-next-year-if-granted-licence.html

The impact of traditional mass communication channels appears to have declined, as Myanmar consumers increasingly become drawn to the appeal of targeted marketing.Targeted marketing gains tractionAcross all age groups, conventional word-of-mouth recommendation from Friends & Relatives continues to be the dominant channel influencing consumers’ purchasing decisions, followed by TV and Billboards (see Figure 25).

While traditional above-the-line, mass communication channels remain important, their apparent impact appears to have declined over the past three years, as survey respondents increasingly look towards alternative sources of information (see Figure 26). TV, for instance, experienced a decrease of 7% in this edition of the survey, with Radio and Print Media also suffering persistent declines. The only exception here appears to be Billboards, which saw a small uptick of 3%.

On the other hand, targeted marketing channels such as Events and In-Store Promotions appear to be gaining traction, especially amongst Millennial and Generation Z survey respondents. With almost universal access to the Internet in major Myanmar cities31, Social Media channels are also increasing in popularity. This takeoff is expected to continue in the near future with the advent of 5G32, and increasing Internet and mobile penetration rates.

Figure 25: Preferred sources of information by age group


Figure 26: Overall preferred sources of information (2017-2019)

27%

27%

26%

29%

29%

21%

21%

20%

20%

25%

21%

20%

21%

22%

22%

13%

13%

14%

14%

10%

7%

8%

8%

5%

3%

5%

5%

5%

5%

5%

3%

4%

4%

2%

Overall

15-24

25-34

35-49

50-641%

3%

2%

1%

2%

1%1%

2%

Friends & RelativesTV

BillboardsIn-Store Promotions

Social MediaEvents

WebsitesPrint Media

Radio

1%

1%

1%

2019

2018

2017

1%

27%

32%

43%

21%

24%

27%

21%

18%

18%

13%

14%

5%

7%

3%

5%

3%

2%

3% 2%

2%3%

3%

1%1%

1%



Social MediaEvents

WebsitesPrint Media

Radio


27


Different channels for different productsAlthough the trend of moving away from traditional mass marketing channels is apparent across all product categories over three editions of the consumer survey, the most marked shift can be seen in the Alcoholic Beverages and Tobacco product categories. For product categories such as Household Appliances, communication channels such as In-Store Promotions, Social Media, and Events are also taking on greater importance (see Figure 27).

For basic necessities, such as Packaged Foods and Confectionery, traditional channels, such as TV and Billboards, remain influential. Even for product categories that tend to be highly regulated, such as Alcoholic Beverages and Tobacco, there has been an uptick in the use of Billboards, In-Store Promotions, and Social Media channels. One possible reason for this could be the innovative approach that these companies have adopted in their marketing efforts. For example, alcohol and tobacco companies increasingly advertise only their logo, and not their products, in street advertisements, sometimes combining these advertisements with events, or advertisements of non-restricted products under the same brand name.

Figure 27: Preferred sources of information by product category


Beverages (Non-Alcoholic)

Personal HygieneProducts

Household Appliances (Major)


Confectionery

Packaged Foods

Tobacco



Social MediaEvents

WebsitesPrint Media

Radio

2%

Question: Which sources of information have influenced you in your purchase of a product/brand? Select up to three channels.

29%

27%

28%

27%

26%

25%

26%

29%

15%

24%

24%

25%

24%

21%

21%

14%

18%

23%

23%

23%

21%

19%

19%

23%

18%

12%

10%

11%

13%

14%

14%

17%

6%

6%

6%

6%

7%

9%

8%

6%

8% 3% 2%

4%2%

1%

4%2%

2%

2%2%

2%

2%

2%

1%

1%

4%

5%

5%

7%

3%

3%

4%

4%

1%

1%

1%

1%

1%

1%

1%

1%


28


5. Buying channels

Supermarkets are increasing in popularity for offline shopping, while payment concerns have been displaced by quality concerns for online shopping.

Solid as a brickIn Myanmar, brick-and-mortar stores continue to dominate buying channels. Grocery Stores, in particular, are the top buying channel for daily consumables. The only exception here is with the purchase of Alcoholic Beverages, where Convenience Stores are preferred (see Figure 28).

Since the previous edition of the survey, there has been a 14% increase in the preference for Supermarkets. Currently, only a handful of shopping malls, such as Junction City and Myanmar Plaza, have supermarket tenants. By locating within shopping malls, supermarket players can capitalise on this untapped opportunity for integrated lifestyle concepts33, which are common across most markets in Southeast Asia.

Figure 28: Preferred buying channels for daily consumables


Beverages (Non-Alcoholic)

PersonalHygiene Products

Confectionery

Packaged Foods

Tobacco

Grocery StoresConvenience Stores

SupermarketsRoadside Vendors/Stalls

Shopping MallsFood Court

Restaurants/BarsOthers

Question: In the past year, where did you usually purchase items from the following product categories?

27%

66%

67%

67%

51%

73%

40%

17%

15%

13%

16%

14%

12%

12%

13%

16%

25%

3%

3%

2%2%

3%

9%

5%

16% 2%

1%

2%1%

1%

1%

1%1%

1%

1%

1%

1%

33 “Lack of retail offerings in Myanmar yields growth opportunity for investors”. Myanmar Times. 9 August 2018. https://www.mmtimes.com/news/lack-retail-offerings-myanmar-yields-growth-opportunities-investors.html


29


For the purchase of Household Appliances, there appears to be a continued preference for Boutique Electric Retail Shops, likely due to the convenience and host of repair services that they offer (see Figure 29 and 30). At the same time, however, other Modern Trade channels, such as Branded Showrooms, Supermarkets, and Shopping Malls, are gaining traction, especially in the cities of Mandalay and Mawlamyine.

Figure 29: Preferred buying channels for Household Appliances (Major) by city (2018-2019)


Figure 30: Preferred buying channels for Household Appliances (Small) by city (2018-2019)

Overall

Yangon

Mandalay

Mawlamyine

Boutique Electric Retail Shops Branded Showrooms Supermarkets Shopping Malls Convenience Stores

Question: In the past year, where did you usually purchase Major Household Appliances?

2019 2018

70%

61%

79%

71%

20%

27%

14%

21%

6%

9%

74%

57%

89%

97%

14%

25%

3%

1%

9%

11%

8%

2%

3%

7%

3%

1%

2%

2%

4%4%

4%

1%

1%

Overall

Yangon

Mandalay

Mawlamyine

Boutique Electric Retail Shops Supermarkets Branded Showrooms

Shopping Malls Convenience Stores Roadside Vendors/Stalls

Question: In the past year, where did you usually purchase Major Household Appliances?

2019 2018

80%

70%

88%

87%

11%4%

4%

4%

3%

3%

3%

3%

21%

6%

6%

72%

50%

92%

97%

17%

29%

8%

6%

11%

4%

8%

2%

2% 2%

2%

1%

1%2%

2%

1%


30


Quality matters for online shoppingIn the previous two editions of the survey, payment concerns were cited by survey respondents as the top reason for not shopping online. However, this concern has now been displaced by product quality concerns (see Figure 31). This represents a significant shift, and could be due to the fact that Myanmar consumers have now grown accustomed to online shopping with cash-on-delivery payment systems.

Although Myanmar’s e-commerce penetration rate is currently less than 3%, a number of developments, such as the expected introduction of a national payments system based on QR codes to facilitate digital transactions later in 201934, are set to spur its rapid growth.

Figure 31: Top reasons for not shopping online

1stRank

2ndRank

3rdRank

119

112

28

263

95

82

21

20

16

145

99

213

86

9

15

10

21

92

10

157

28

49

47

60

154

144

36

121

27

32

38

46

38

78

48

63

52

58

80

209

42

79

51

45

44

48

66

196

20182019

201820192019

2018

Concerns on product quality

Unable to try/sample

Concerns on payment

Higher price

Concerns on damageduring transportation

Impersonal or slowcustomer service

Long lead time for delivery

Limited product varietyand assortment

34 “Digital payment market potential in Myanmar”. Myanmar Business Today. 23 April 2019. https://www.mmbiztoday.com/articles/digital-payment-market-potential-myanmar-fintech


31


35 “Online shopping picks up momentum in Myanmar”. The Myanmar Times. 20 November 2019. https://www.mmtimes.com/news/online-shopping-picks-momentum-myanmar.html

36 “Online shopping site rgo47 eyes a growing market”. The Myanmar Times. 6 June 2019. https://www.mmtimes.com/news/online-shopping-site-rgo47-eyes-growing-market.html

37 “OneKyat App Adds a New Category for Automobiles”. Myanmar Business Today. 8 October 2019. https://www.mmbiztoday.com/articles/onekyat-app-adds-new-category-automobiles

Nascent e-commerce sector heats up Although Myanmar’s e-commerce sector is considered to be nascent relative to other regional markets (see Figure 32), a number of prominent retail events offer a glimpse into the potential that it holds. When Alibaba’s famous 11.11 sales event was introduced to Myanmar consumers for the first time in 2018, its app attracted over 150,000 shoppers in a single day35.

The potential of this market has not escaped the attention of investors: earlier in June 2019, the popular online local shopping app, rgo47, received an investment from Daiwa PI, a Myanmar-focused private equity firm, to scale its operations and optimise technology and delivery36. Another popular buy-and-sell local app, OneKyat, acquired by Norway’s Telenor Group in 2017, is also working on its rebranding and intensifying its marketing and promotional efforts37.

Figure 32: Maturity of e-commerce sector in selected regional economies

Source: Deloitte analysis

Nascent(0-3%)

Growth(3-10%)

Mature(Above 10%)

e-Com

mer

ceco

ntribu

tion

to r

etai

l

9%

12%

6%

3%

0%

High e-commercegrowth rate

32


38 “Branches”. AYA Bank. Accessed on 26 August 2019. https://www.ayabank.com/en_US/contact/branches39 “Wave Money announces stellar growth in H1 2019”. Yahoo Finance. 17 July 2019. https://finance.yahoo.com/news/wave-money-

announces-stellar-growth-010000880.html

6. Payment

Digital payments have demonstrated exponential growth, and are likely to leapfrog card payments in Myanmar’s payments sector.Diffusion of digital payment services While Cash still retains its crown as the primary payment method, the uptake of digital payment services has made significant progress since the previous edition of the survey, increasing from 25% in 2018, to 42% this year (see Figure 33). This is primarily driven by non-bank, mobile financial services providers, who have invested in extensive agent networks throughout the predominantly cash-based economy to encourage the adoption of mobile domestic remittances.

As the latest disruptors to Myanmar’s payments sector, these new entrants are more nimble, and are able to expand their footprint at a much faster rate than incumbent banks. AYA Bank, one of Myanmar’s largest banks, took about nine years to open 258 branches38. In contrast, Wave Money, one of the leading mobile financial services providers in Myanmar, took only about two and a half years to acquire a network of 45,000 mobile agents39.

In terms of demographics, Millennials and survey respondents with higher monthly household income levels tend to show a higher preference and usage of digital payment services. At the same time, while the preference for digital payment services appears to be more prevalent in Yangon, its usage is in fact higher in Mawlamyine (see Figure 34).

The primary features of digital payment services driving its takeoff appears to be the speed and convenience that it offers. Although consumers are gradually becoming more confident in the security of digital payment channels, these concerns have not completely gone away. A lack of familiarity with digital channels, concerns on security, as well as concerns on payment dispute remain the three top reasons cited by survey respondents for not using digital payment services (see Figure 35). Nevertheless, survey respondents appear to be optimistic about the future, with 73% responding favourably when asked if they would adopt digital payment services in the future (see Figure 36).

Figure 33: Usage and preference for different payment methods (2018-2019)

2019

2018

100%42%

25%

45% 9%

6%

20%

1% 0%

0%0%

Cash Digital Payment Bank Transfer Cheque

4%10%

86%

100% 85%

Question: Which payment methods have you used for your transactions?

Question: Which payment method do you prefer?


33


Figure 35: Reasons for using and not using digital payment services


Figure 36: Expectations for future usage of digital payment services (2018-2019)

Figure 34: Breakdown of usage and preference for digital payment methods (2018-2019)

Question: Which payment methods have you used for your transactions?

Question: Which payment method do you prefer?

LocationMonthly household

income level, MMK million Age, years

Usa

gePr

efer

ence

12%

4%

12%

15-24: 6%

25-34: 16%

35-49: 7%

50-64: 8%

0.5-1: 7%

1-1.5: 17%

Less than 0.2: 1%

0.2-0.5: 11%

1.5-3: 5%

More than 3: 18%

Question: What do you use digital payments for?

Transfer money

Purchase mobile credits

Shop online

Pay utility bills

Make regular payments

78%

8%

6%

6%

3%

15-24: 39%

25-34: 51%

35-49: 38%

50-64: 33%

Less than 0.2: 27%

0.2-0.5: 36%

0.5-1: 43%

1-1.5: 57%

1.5-3: 45%

More than 3: 60%

Yangon: 45%

Mandalay: 29%

Mawlamyine: 56%

332

310

231

65

18

282

338

184

84

15

Fastertransactions

Cash-freeconvenience

More securetransactions

Easier totrack spending

Reward pointscollection

300

91

75

43

40

407

137

219

67

31

Not familiar withdigital payments

Less securetransactions

Payment disputesDigital payment option

is not availableDifficult to

track spending

Question: Which are your reasons for using digital payment services? Question: Which are your reasons for not using digital payment services?

Question: Will you use digital payment services in the future?

Yes73%

No27%

2019 2018

No34%

yes66%



34


Digital payments to leapfrog card payments?This year’s survey findings revealed a stagnation in the growth of banking services, in terms of bank accounts, debit cards, and credit cards (see Figure 37). With only 6% of its adults relying exclusively on banks for financial services, including credit, savings, and remittances services40, the majority of Myanmar’s population relies on non-bank formal and informal financial services.

As an illustration of the consumers’ rapid adoption of digital payments services, KBZ Pay, one of the recent rising stars in the digital payments sector, acquired 1.6 million installed customers within a year of its launch41. At the same time, Wave Money handled about USD 1.3 billion worth of transactions in 2018, with this amount set to triple to USD 4 billion in 201942.

Figure 37: Ownership of bank accounts, debit cards, and credit cards


In a bid to liberalise the banking sector, Myanmar’s government has embarked on several transformation efforts, including a plan to issue more licences to foreign banks. However, several initiatives, such as an attempt to stabilise the currency with a domestic ban on prepaid cards43, and the increase of annual credit card interest rates to 20% to control the levels of unsecured lending44, have since met with some backlash.

With nimbler mobile payments service providers pushing ahead with aggressive expansion plans throughout the country, there is a possibility that digital payments may leapfrog card payments in Myanmar, rendering the latter irrelevant. Ultimately, it is expected that Myanmar’s credit card penetration rate will not exceed 5%, the average rate for Southeast Asian economies (see Figure 38).

Figure 38: Penetration rates of bank accounts and credit cards in regional economies

Source: Nikkei Asian Review

Question: Do you have a local bank account and/or local bank card?

36%

43%

24%

36%

64%

57%

76%

64%

Yangon

Mawlamyine

Overall

Mandalay

Bank accounts Debit cards Credit cards

30%

36%

21%

70%

64%

79%

96%4%

99%

99%

100%

98%

1%

1%

2%

Yes No

40 “MAP Refresh Myanmar Diagnostic”. Making Access Possible. 2018. http://finmark.org.za/wp-content/uploads/2019/04/Myanmar_Diagnostic_2018_CB3_repro.pdf41 “Ambitious KBZPay eyes 30m clients in Myanmar”. Eleven Media Group. 26 February 2019. https://elevenmyanmar.com/news/ambitious-kbzpay-eyes-30m-clients-in-

myanmar 42 “Myanmar's digital money transfers set to triple in 2019”. Nikkei Asian Review. 6 July 2019. https://asia.nikkei.com/Business/Business-trends/Myanmar-s-digital-money-

transfers-set-to-triple-in-2019 43 “Latest CBM ruling seen as setback for cashless transactions”. Myanmar Times. 1 August 2019. https://www.mmtimes.com/news/latest-cbm-ruling-seen-setback-

cashless-transactions.html44 “CBM raises annual credit card rates to 20pc”. Myanmar Times. 1 May 2019. https://www.mmtimes.com/news/cbm-raises-annual-credit-card-rates-20pc.html

98% 98%

85%81% 80% 80%

48%

35% 32% 29% 26%22%

68%

49%

21%

10%

21%

3% 3% 2% 5%1% 1% 1%

Japan Singapore Malaysia Thailand China India Indonesia Philippines Vietnam Lao PDR Myanmar Cambodia

Bank accounts Credit cards

35


Looking ahead

In this fourth edition of the Myanmar Consumer Survey, we explored a number of consumer behaviour patterns uncovered by the recent consumer survey conducted in three major cities: Yangon, Mandalay, and Mawlamyine.

There are three key takeaways. Firstly, the Myanmar consumer is prioritising discretionary spending on non-essential goods, and exhibiting decreasing levels of price sensitivity. With their optimistic outlook of the future and openness to new experiences, there is an untapped opportunity for companies to introduce new product and lifestyle offerings to this increasingly sophisticated consumer.

Secondly, the Myanmar consumer’s brand loyalty is dynamic and shifting. Although several brands have managed to dominate recall over several editions of the survey, we also observe new brands gaining a foothold through the use of intensive promotional campaigns. This highlights the need for consumer companies to make continuous and consistent investments in their marketing and brand-building efforts to entrench themselves firmly in the minds of the Myanmar consumer. Doing so, however, will require a keen understanding of the communications channels that will best resonate with the consumer and the product category in question.

Finally, we see an evolution in the digital payments sector that will set the platform for the rapid takeoff of e-commerce. In particular, digital payments have demonstrated exponential growth, and are likely to leapfrog card payments in Myanmar’s payments sector. While concerns over payment security remain a barrier for online shopping, this edition of the survey reveals that it has diminished in importance, as the consumer’s concerns shift towards issues on product quality.

Despite the recent years of economic stagnation, the Myanmar economy looks set to pivot back to higher growth. With their growing sophistication, penchant for new experiences, and dose of prudent optimism, the Myanmar consumer is one that is dynamic and constantly evolving. Consumer companies who wish to keep up, too, must develop more innovative and responsive strategies as they ready themselves for take-off in this fast-growing and fast-moving market.

36


Researched and written by

Pua Wee MengExecutive Director, Consulting [email protected] +65 6232 7244

37


Contact us

Southeast Asia Consumer industry practice

Southeast Asia and Singapore Pua Wee Meng [email protected]+65 6232 7244

BruneiNg Hui [email protected]+673 222 5880

CambodiaKimleng [email protected]+855 2396 3788

GuamMike [email protected]+1 671 646 3884

IndonesiaMaria [email protected]+62 21 5081 9300

MalaysiaPua Wee Meng [email protected]+65 6232 7244

MyanmarAye [email protected]+65 6800 2255

Lao PDRChoopong [email protected]+66 2034 0114

PhilippinesMelissa [email protected]+63 2 581 9000

ThailandManoon [email protected]+66 2034 0123

VietnamNguyen Vu [email protected]+84 4 6288 3568

38


39


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