Life has Changed in Burma

Life has changed in Burma in what seems to be a blink of an eye…and it is opening the door to new opportunities.

On my flight back from Burma last week as I recounted my trip I couldn’t help but feel how drastically life in Burma has changed from even just the last two years .The changes are real and certainly isn’t all hype.

So what has changed?

What hasn’t changed?

I went grocery shopping in Rangoon in a store comparable to a version of an impressively clean U.S. grocery store with full product, brand variety including a deli and services. My sister who lives in Tokyo and a mother of two was delighted to find a particular U.S. organic baby food on sale which she could not find in Tokyo and often found it hard to buy in Hong Kong. Every conceivable category and U.S. brand of food and product was readily available at price points cheaper than in Tokyo perhaps driven by consumer demand and because some foreign firms now have factories in Burma. This is a large upgrade in quality and availability from just a few years ago when products gradually became available but variety and presentation were lacking. In the more distant past grocery shopping in Burma meant a farmers market style shopping experience where a barter system dictated your price points and once you bought a chicken, the butcher would wrap a bloody beheaded chicken in newspaper and hand it over to you. There were really very few canned foods or certainly nothing close to organic baby food that is hard to find in developed Asia.

At the newest mall, the large beautiful bookstore comparable to a Barnes and Noble in the U.S. has books that are 95% English U.S. published books from the latest New York Times bestseller list to children’s arts and crafts book corner. I was distressed to find out I had paid a few more dollars for a U.S. published book at the airport in Hong Kong on the way to Burma which was on sale at the store. The mall’s food court of Asian and Western foods, stores with branded clothes and goods and a Cineplex theater could easily make think I was in the U.S. or Singapore. Burmese food stores which used be on the dirty roadsides are now chain food restaurants. Unlike neighboring emerging and frontier markets none of the products were knockoffs and the prices were from authorized sellers in the mall. My sister was again thrilled to find Disney’s “Frozen” movie character toy for her five year old that gets sold out quickly in Hong Kong.  Some brands available in the city include but are not limited to Swenson’s, L’Occitane, Micheal Kors, Burberry, Coca cola Myanmar, Disney and L’Oreal. The mall was busy. There appears to be consumer demand and purchasing power.

Infrastructure and transport is still lacking but when we drove over the newly built overpass the traditional “tuk tuks” used for taxis were no longer on the roads. Taxis are good condition Chinese and Japanese sedan cars a visitor from the world would be more than comfortable to ride in. The newer license plates are also in English alphabet rather than the Burmese. There is no shortage of foreign cars on sales such as Mercedes-Benz, BMW and Toyota. I even saw a Bentley on sale.  Busses now have reasonable capacity with few hanging off the side of the doors into the streets but there is an urgent need for public transportation, an opportunity for perhaps a Japanese rail transport company.

I found many competing local businesses in real estate development, services and others with no one dominant conglomerate. Many successful small family owned businesses which have been in Burma for decades seemed to have grown into bigger businesses due to recent changes and are expanding into different areas. As such, they have local capital to fund new businesses but the market also appears open to other competitors.

Residential condominiums are available at various price points and quality some comparable to U.S. standards and rates with the majority of inventory mainly coming onto market in 2016 and 2017. The model rooms and sales professionals at the sales offices have world standard professional sales pitches. Serviced apartment rates equivalent to US$1,000/per month in early 2000s are now fourfold at USD$4,000/per month. Rates that have increased overall to developed world standards have services to match those standards as well. While supplies may come on, there is very little real inventory on the market currently and pent up demand for both residential and office buildings. For the mid-priced range, it is a golden opportunity for a high end prefabricated builder to bring more supply to the market quickly and resolve the time lag. Hotels have been refurbished and service standards raised.  The rates and prices to dine have risen as well but not by exorbitant amounts.

During the evenings the Wimbledon tennis match was live on television, a stark contrast to the days when it was a novelty to have access to television in Burma which back then broadcasted dated programs only for a few hours a day. Many of the pubs and restaurants in the day following were filled with people watching the world cup live.  People have smartphones (not feature phones) which they use for calls and photos (3G services to start in the next few months by Ooredoo). Wi-Fi is also available in hotel rooms and several public places.

One of my travel companion thought he lost his U.S. driver’s license but he had dropped in it in the hotel room. In past days, a U.S. Identification would probably be stolen and sold in the black-market. But we came back to the hotel to find the ID carefully placed on the bed by the cleaner.  Burma is starting to feel a lot like Tokyo where personal property is not stolen but returned to the owner if lost.

The mood in Burma was bustling during my visit. From the doorman to the waitress to the contractor, people now have jobs and have a sense of enthusiasm and purpose. There is no sense of desperation amongst the people or awe of the foreigner. There also appears to be a large number of growing small medium enterprises (SMEs).  In fact, 90% of the services I used in Burma during my trip was from SMEs (run by women). There is a sense that if you worked hard you could reap the rewards. Consumers are also spending on enjoyment and quality of life at every price point. So while supply may come on the market, there is also pent up demand.

What hasn’t changed?

Women are dominant in business from retail to large businesses. A lot of SMEs are run by women. Women remain strong and influential business people. I believe they will be key in continuing to drive economic development.

Most Burmese also have a solid utility of the English language. Many signs are also in English and Burmese. While it was convenient to revert to Burmese when shopping in very local stores, most sales people had a fairly good command of English. As businesses grow I do not see language becoming a barrier to business development with non-Burmese partners. I believe Westerners will find it culturally very easy to interact with Burmese business people relative to other more opaque Asian countries. I remain convinced Burma is not going to be known for a cheap labor source and manufacturing hub like many other emerging or frontier markets. The people and services rather than manufacturing labor are likely to be the economic driver.

What is to come in the next few months?

In the next few months the foreign wireless providers (Ooredoo and Telenor) alongside the Burmese provider will roll out 3G wireless services. Both providers aim to provide over 90% mobile coverage in five years. The providers will also sell SIM cards to meet demand which has resulted in a big price decrease in SIM cards. Mobile handset ownership, primarily smartphone ownership, has had a hockey stick growth in the last year. Despite the imbalance between average monthly income and current handset prices, people are buying smartphones. With price points decreasing and purchasing power increasing, mobile penetration may be faster than most expect. Stores similar to that in the U.S. and Tokyo are selling smartphones from Samsung, HTC, Huawei and other handset makers.

Obvious business opportunities in technology.

As the new 3G service is rolled out, connectivity will likely increase mobile business opportunities exponentially. Consumers are likely to skip the PC and go directly mobile for connectivity and services. Currently, there is an extremely thick yellow pages book to find local businesses and restaurants which I found to be a screaming opportunity for a company like U.S.’s Yelp or Japan’s Tabelog or Gurnavi. Currently Foursquare check-ins are popular particularly with the youth. Television and physical poster advertisement is already prevalent and the advertising market will likely progress quickly to mobile where most time is spent. As the consumer is familiar with U.S. and foreign brands in physical stores and there already is a nascent ecommerce market, U.S.’s Amazon, eBay or Japan’s Rakuten services if provided in Burma would mean a smooth transition to online. Consumers have gone very quickly from keeping all their life belongings of cash in their homes due to lack of a proper banking system to now withdrawing cash from ATMS in malls. People would easily adopt payment services a company like Square Inc. could offer. Citizens have gone from not having a fixed line phone in their homes to teenagers with smartphones in the malls taking selfies and entrepreneurs passing business cards with mobile contacts. As mobile usage and services increases, there will also be a large demand for data center companies. Technology is everywhere. The elevators in my relative’s apartment buildings that used to be an elevator man operated elevator is now an electronic card, pin code security accessed elevator. I believe technology adoption is fast because before they even get a product on market many of the consumers in Burma already know about it and lead the early adoption once they have it.

Final word

Changes come from within a country on a day to day basis and are happening far longer without being obvious. No doubt there are risks in a frontier market like Burma as with every frontier market and it is not for everyone. One of the big risk for many is lack of background and understanding about Burma and real first hand quality ground research on what businesses and people are doing on a daily basis. There is a misperception that trying to map a neighboring frontier county’s progression to Burma using a cookie cutter approach is the best way to estimate the future. My view is Burma is unique. I am impressed with the transformation in the country. Most things now are not to world standards yet but therein lies the opportunity. I am bullish on the hard working good business men and women I met. Burmese who want to make a better life for themselves haven’t let hardship and setbacks define them and are not whining and waiting for their world to be perfect to start a business. Instead they appreciate what they have, how far they have come and continue to build on it.

Copyright ® Rising Funds Capital Management, LLC Patricia Higase, CFA.

Founder of Rising Funds Capital Management, LLC and Link Road Capital Management, LLC.

Patricia Higase is the co-founder of Link Road Capital Management, LLC. She has over fifteen years’ experience in the financial industry in Asia and the U.S. Prior to Link Road Capital Management, LLC she has held roles as analyst and portfolio manager of Asian portfolios. Patricia has been involved in Burma since the 1980s and travels to the country. She has a BA from Grinnell College and an MBA from Boston University Graduate School of Management. She is a CFA charter holder. She is fluent in Japanese, English and Burmese.


This material should not be considered as investing advice or a recommendation of any particular security, strategy or investment product. The opinions of the author are subject to change without notice. The author does not accept any liability for losses either direct or consequential caused by the use of this information. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of the author.


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