According to the Ministry of Commerce, in February 2017, Myanmar received more than US$23.5 billion from foreign trade, of which US$17.3billion came from overseas trade and more than US$6.1billion from border trade. Large population of young adults, changes in consumerism and increasing income are the main drivers of rapidly growing Myanmar’s household and personal care products. The influx of foreign direct investments in manufacturing sector is also witnessing further expansion. The growth is more significant in the sales of non-essential products, such as beauty and personal care and home-care products. In 2013, the sales of beauty and personal care items reached a market value of USD 318 million, after expanding at a compound annual growth rate of 14% since 2009. Myanmar’s households with income levels of between $500 and $1000 has highest potential to be a very profitable segment for many consumer products and retail companies since they demand for higher quality healthcare, education, transportation and grooming products (Deloitte’s Myanmar Consumer Survery, 2016). Taste, Quality and Price are the top three attributes prioritized by Myanmar consumers when purchasing consumables and price alone is no longer the single most important determinant of the purchasing decision. Both expected and actual qualities of consumer products have increased too in terms of product freshness and consumers’ expectations of the product. For Household Appliances purchase decisions, durability and technology are dominant attributes. Easy border trades with Thailand and China make the inflows of the products from those countries widely popular in Myanmar.
The Ministry of Commerce has set a target for the import volume to reach $17 billion before the next fiscal years. Deloitte Consulting’s 2016 Consumer Survey found out that the number of middle-income consumers in Myanmar is expected to double by 20207. The consumer expenditure is also set to triple over the next decade. This is driving many international retailers expanding in Myanmar’s second-tier cities and develop their logistics and distribution networks. Nevertheless, most of Myanmar consumers prefer Local products for familiarity and lower price points, but this varies geographically. Consumers in Yangon have greater exposure to brands and they prefer Foreign brands gradually. Myanmar consuming volumes are still limited mainly by inflation, exchange rate fluctuations and lack of consumer credit/finance. Cash payment is still being used for 95% of the purchases. Credit cards have been recently introduced by private banks yet the allowances are low. Most of the income levels still spend 80% of their income paying bills and buying necessities.
Ministry of Commerce regulates and controls all the trade policies and procedures. Since 2001, trading activities have effectively been prohibited for foreign companies except the sale of goods produced by a foreign company in the country. However, special economic zones have different trading policies and incentives. The sale of goods is governed by the Sale of Goods Act but neither the Sale of Goods Act nor the Contract Act provide for any restrictions on foreign companies to sell goods in the country. In 2015, the Ministry of commerce allowed the import of fertilizers, insemination seeds, pesticides and hospital equipment, on condition they partner with a local company. Pursuant to the Ministry of Commerce's new policy, foreign companies have to execute an undertaking that they will not resell imported goods in order to be issued a Certificate of Exporter/Importer Registration.
Investment business allowed in the form of joint venture with a citizen owned entity or a Myanmar citizen are production and domestic distribution and sale of various kinds of soap and cosmetics.
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