HCM City making inroads into Myanmar Myanmar is a textbook case demonstrating the importance of due diligence niche marketing, said Pho Phuong Nam, HCM City Investment and Trade Promotion Centre (ITPC) Director Pho Phuong Nam. Its population of 60 million is smaller than Vietnam’s but in terms of land mass it is twice as large. Its people are largely poor and economists estimate its industry can only meet 15 % of the nation’s demand for goods and services. It has only been a few years since the Myanmar government made the historical move to open up of its markets to the outside world and the transition has been slow and fraught with uncertainties. Over the past few years, Nam said the city has made extensive due diligence trips to Myanmar to learn more about the market and opportunities, adding that specifically it has been trying to determine the most attractive segments of the market in terms of growth potential and profit. The city has also staged a trade fair annually at which we conducted surveys as part of an attempt to identify market trends that are either threatening or creating opportunities for the future, she said. Modest growth As a result of the city’s efforts, exports rose to US$77.34 million in 2014, an overall figure that is still modest in relation to its potential. The less than desired exports to date have largely been the result of weak domestic demand in the country. In addition, consumers are highly selective in the goods and services that they do purchase, which increases the market risks exponentially and the importance of niche marketing. The city has targeted the retail markets for household plastics, processed food, cosmetics, pharmaceuticals along with the commercial markets for construction materials, fertilisers and industrial electrical supplies and equipment. However, businesses face strong competition from Thai and Chinese businesses in these markets, which makes it all the more important to develop an appropriate short and long term strategy to do business in the country, Nam said. Another factor impeding growth is the high transport costs and problems related to payment and foreign currency issues Nam said.  As well the government is highly protective of the gold, silver and automobile markets so they are not accessible by Vietnam businesses. A further complication is that if a business wants to jump into in the retail sector they must trade via Myanmar wholesalers who will then serve as the distributor. The laws of Myanmar do not allow foreign businesses to open distribution networks. Our advertising and marketing activities have also been weaker than those of Chinese and Thai businesses, Nam said. For instance, annually we have held just one trade fair while Thailand had organised three or four per year. Accelerating marketing activities HCM City businesses have begun to pick up the pace of advertising and marketing over the past year, which is beginning to bear fruit. For instance, FPT Information System Company Ltd (FPT IS) recently secured a contract to develop an enterprise resource planning (ERP) system for United Paints Group (UPG). The seven month contract calls for FPT IS to install a SAP system for UPG to better manage production, sales, warehouse, inventory and a smart reporting system. FPT group also recently won a contract to supply services to set up a sales and distribution network for Myanmar Mayson Industries Co., Ltd (MMI) – the leading retailer. As another example, in early March, Hoa Binh Company completed construction of a GEMS building in Yangon. “This year HCM City will continue to beef up its advertising in the Myanmar market,” said Ho Xuan Lam, ITPC Deputy Director. First of all, we will step up the number of trade and tourism fairs, Lam said. Secondly we will organise more seminars to introduce products and have already set up one for this coming May at Tatmadaw Hall in Yangon, Myanmar. Lastly, we will also substantially increase the number of due diligence tours to Yangon and Mandalay and meetings with Myanmar businesses. Many products are beginning to make some headway into the market such as plastics made by the Rang Dong company, electric cables by Cadivi, lights by Dien Quang and iron sheet by Hoa Sen, Lam added. Myanmar is largely an untapped market that has huge potential for the city’s businesses if they take care to seize the opportunities it presents and work to overcome the barriers to doing business in the country. I expect that many of the barriers will be removed and more opportunities will open when the ASEAN Economic Community (AEC) officially comes into effect later this year. VOV