A Tale of Retail Success
By Kyaw Hsu Mon 25 March 2014
As Myanmar’s leading retailer, City Mart Holdings has made great strides since the opening of its first outlet in the north wing of Bogyoke Aung San Stadium in Yangon in 1996. It now has 15 supermarkets in Yangon, Mandalay and Naypyitaw, and has expanded its business to include a wide variety of other retail stores.
Daw Win Win Tint, 39, has been at the helm of the company since 1997, shortly after she returned to Myanmar with a degree in business management from Singapore. She spoke recently with The Irrawaddy’s Kyaw Hsu Mon about the challenges she has faced as one of the country’s leading woman entrepreneurs.
Question: How many kinds of retail shops do you have under your supervision?
Answer: In addition to our 15 supermarkets, we have five Ocean Super Centers, 19 Season Bakeries, three City Baby Clubs, three Popular Book Stores, and many other retail stores. They are all organized as modern retail stores, which is quite rare in Myanmar, where only around 10 percent of retail shops are organized in this way. Most people here are more familiar with shopping malls like Yuzana Plaza, Sein Gay Har and Super One, whereas we are set up more in the supermarket or hypermarket style.
Q: So was it difficult to win over consumers when you first entered the market?
A: Actually, we were not the pioneers in this market. There were already a couple of local supermarkets operating here, as well as a Singaporean chain. But when we started out, the biggest challenge was that we were perceived as expensive, so it was difficult to compete with small wholesale shops. But we invested a lot in this style of supermarket, so eventually we were able to gain wider acceptance.
Q: Does that mean that at the time you could only sell to high-end customers?
A: Well, initially our sales were very poor and we were losing money, but that gradually began to change after we opened in the Junction 8 shopping mall in 1998. After that, our customer base started to expand. We can say that people’s purchasing power is still quite weak here, but that is slowly changing.
Q: Roughly what percentage of the population goes to supermarkets, as opposed to traditional wet markets?
A: At the moment, only around 10 percent of the people here use modern supermarkets. But we expect that to change as incomes rise.
Q: How have things changed since 1996 for small and medium enterprises (SMEs) in Myanmar?
A: In 1996, the market economy in Myanmar was still young, so there were a lot of people starting new businesses, even though they didn’t have much knowledge at that time. We were actually a bit late coming into this market, since the economy started opening up in 1992. When we came in, the economy was facing a crisis because the government had changed the import and export law. Then in 2003-4 there was another crisis, the banking crisis. That’s why there are only a few companies that started out when we did that are still around. Now that the government has changed, we’re seeing many more SMEs emerge. But now the amount of capital you need to start a new business is much higher than before.
Q: How much were you affected by the US and EU sanctions imposed in the 2000s?
A: Well, some of our regular suppliers were no longer able to get certain products because of the sanctions. We relied on small suppliers, so that was really a struggle for us. Also, we had trouble developing our IT services because all of the software came from the West. We couldn’t buy directly from the original developers. And there had no direct trade [for other products] between Myanmar and Western countries, so we had to source goods from Thailand or Singapore, which meant a lot of additional costs.
Q: In 2005, there were bomb blasts at two City Mart outlets. How did this affect your business?
A: We’ve experienced a few crises like this, including the flooding in 2007, in which we lost almost everything at our outlet in the Dagon Center, and during Cyclone Nargis in 2008. But the bombings at the Dagon Center and Junction 8 in 2005 were the worst. At the time, I felt completely helpless. Customers and staff were both injured by the blasts. We did our best, and after closing for a month for renovation, we reopened. But it took time to win our customers’ trust again. Since then, we have paid serious attention to security issues.
Q: City Mart was recently among a number of businesses that were inspected for illegal liquor imports, even though you are not an importer. What is your reaction to this?
A: I am satisfied that the government is handling economic reforms well, because we have seen a real improvement in the business environment. However, during this transition period, there are bound to be some mistakes. We just have to let them [the government] know that they need to consider all points of view before they decide to do something. And they should also listen to the advice of economists to improve their trade policy.
Q: Do you face any particular challenges as a woman entrepreneur?
A: This has never really been an issue for me. Compared to other countries, Myanmar women have a lot of opportunities. There is almost no discrimination. The real problems I face stem from the unstable trade policy and the lack of coordination among the different government ministries. We never get any assistance from the government. Sometimes I think this lack of assistance has made me more capable as a businesswoman.
Q: What is the secret of City Mart’s success?
A: From the beginning, our priority has been serving our customers. We are always looking for new ways to offer them better services and quality at a fair price. This makes me confident that we can continue to keep our position as a market leader.
Q: Do you plan to open any new branches this year?
A: We are going to open some new branches in the 2014 fiscal year. The main challenge we face right now is the skyrocketing price of property, but we will do what we can to continue expanding. We also have to prepare for the influx of foreign investment that we’re expecting after the establishment of the Asean Free Trade Area in 2015.
Q: What should the government do to support local businesses before then?
A: We need to strengthen our ability to compete, so the government should make it easier for us to get financial backing. We also need access to better locations, and more technical support. Human resources could also be improved.
Q: Do you have concerns about the future?
A: Competition will be very tough, so we are going to have to work harder. Perhaps the most important thing the government can do to help us succeed—even more than giving loans—is to create a more transparent trade policy.
This article first appeared in the March 2014 print edition of The Irrawaddy magazine.