Business

Mom 'n Pop Stores Face 7-Eleventh Hour Crisis

By May Lay 3 July 2012

Mom ‘n Pop corner shops and franchised convenience stores in Burma knew they should prepare for a battle to the death when they heard the news that the world’s largest retailers, 7-Eleven, will open outlets in cities around the country this year.

“We are preparing to face the competition and have a contingency plan in place,” said Andy Lee, a spokesperson for ABC, one of only two chains of convenience stores in Burma, the other being 108 Stores. “We believe competition will be intensified and we will have to change our strategy to compete with the influx of foreign companies,” he added.

Last month, 7-Eleven announced that it had agreed terms with the Zaykabar Company, owned by Khin Shwe, a parliamentarian who is one of Burma’s most prolific businessmen with a great many engineering and construction projects. Zaykabar was recently at the center of a storm over its alleged illegal seizures of farmers’ lands in Rangoon Division’s Mingaladon and Hlaing Tharyar townships.

Speaking to The Irrawaddy on Friday, Zaykabar chairman Khin Shwe said, “I have already discussed the details with 7-Eleven executives in Thailand. We will start the project sometime in 2012. Zaykabar will hold representation rights to open outlets all across Burma.”

ABC’s Andy Lee acknowledged that Zaykabar is a major company in Burma, “but they do not have the experience or knowledge of the convenience store business. We too have an option to work with a foreign partner if the situation demands us to do so,” he said on Monday.

ABC is a subsidiary of the Myanmar Indo Best Company, and is recognized as the pioneer of organized retailing in Burma since 2007 with more than 20 ABC stores in Rangoon alone. It is headed by Zaw Latt who also owns Rich Coffee industries.

In recent years, there has been a vast increase in the number of people turning their homes into convenience stores or retail shops in cities across Burma. However, many corner shop owners say they fear they will be put out of business once 7-Elevens start popping up all over town. They cite the case of neighboring Thailand where most other competitors have disappeared since the American chain exploded onto the scene. 7-Eleven now has nearly 7,000 outlets in the country with more than half located in the capital, Bangkok.

Although the name may vary from country to country, there are currently no less than 46,000 7-Eleven outlets around the world. Under the parent company, Seven and I Holdings, 7-Eleven has nearly 13,000 outlets in Japan while in Hong Kong the franchise is known as “Little 7.”

But in India, the government has regulated the entry of foreign companies into the convenience store sector to protect its local retailers. Subsequently Indian streets are free of the chain store which is regarded by many purists as the epitome of American consumerism and a leading promoter of the globalized approach to capitalism known as “Coca-Colonization.”

Globally, 7-Eleven had an estimated revenue of $17 billion in 2009, which is nearly 50 percent of Burma’s current GDP.

It originally adopted the name “7-Eleven” because its outlets operated from 7 am to 11 pm. In 1962, the stores first began staying open 24 hours across the US.

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