Presented by Kaythi Khine

(Myanmar)

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• Overview of Retail Business in Myanmar

• Background History and Profile of KAY MART

• Challenges in Retail Business.

• Sustainable Activities to Counter Challenges.

• Innovation to Sustain Business

• Conclusion

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• Over the last 2 years, we had the opportunity to workwith 2 of the major players of the Myanmar retailscene.

• From field visits to deeper shopper behavioranalyses, from retail strategies to distributionopportunities, we have had the privilege to be amongthe first to grab the outstanding potential of theMyanmar retail market.

• Beyond the business perspectives and informationthat our clients agreed to be published, these 2 yearshave above all enabled us to fall in love with acountry rich in history, culture and diversity, and theBurmese people, whosehonesty, kindness, dedication and appetite to learnhave no equal in South East Asia.

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• Due to still heavy import difficulties, Myanmar is aperfect example of a supply driven market. Shoppersare eager to buy (almost) whatever is available.

• While official imports are growing, and importregulations and taxes progressively smoothened bythe government, border trade and wholesalers own alarge part of the market.

• Almost all international consumer goods can befound on Myanmar stores shelves, in all channels.

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• There are many other opportunities in the retailsector as well. Currently small mom-and-pop typebusinesses are the dominant forces in Myanmarretail, with larger supermarkets only just beginning totake market share.

• Many of these small stores lack efficiency, customerservice, efficient supply chains, and professionalism.

• Many companies choose to distribute their ownproducts instead of using a dedicated logisticscompany.

• We see a large need for logistics companies tosupport the growth of retail in Myanmar.

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• KAY MART is the convenience store which has beenrunning with 3 outlets in residential area of Yangon .

• In early 1990s, retail stores were introduced inMyanmar.

• The first KAY MART retail outlet was located in densepopulated area, Thingangyun Township since 1997.That outlet employs 5 associates.

• KAY MART is organized as Sole Proprietorship. Initialinvestment is Kyat 10,000,000 (about USD 55,000 inthat time) as out tries.

• Base on experience from first outlet, KAY MART(Dawpon Township) and KAY MART (OkalapaTownship) were opened in 1999 and 2007respectively.

• Now, KAY MART employs 25 associate employees.

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Organization Structure of KAY MART

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Organization Structure of KAY MART outlet in Thingangyun Township

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• Vision

“KAY MART is on every corners of every cities.”

• Mission

"Our mission is to make KAY MART the preferredshopping destination for our customers bydelivering outstanding value, continuousinnovation and an exceptional customerexperiences by consistently fulfilling our ExpectMore. Pay Less and brand promise."

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1. Cosmetics

• Color Cosmetics Products

• Skin Care Products

• Toiletries Products

• Hair Care Products

2. Electronics Appliances

• Household Products

• Utilities Products

3. Fashion Wear

4. Stationery

5. Furniture

6. Household Goods

7. Other Consumed Goods

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• When KAY MART retail business was started up in1997, there was no Super Market in Myanmar.

• Because of that situation, retail (mini mart) businesswas booming and achieving some success. RetailOutlets were mushrooming in populated areas ofcity. Many people felt more convenient and weresatisfied their new experience of shopping at retailoutlets.

• Retail outlets were choosing their product offerdepend on their affordable investment and localpeople’s preferences.

• Lack of their capital investment, the retailers cannotmuch expand their business as well as could notafford to make partnership with foreign wholesalers.

• Just only bought limited merchandises from LocalWholesalers.

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• Too high interest rate also hindered the businessdevelopment. Because of the undeveloped bankingsystem, retailers were far away form bank and werefinanced from loan sharks.

• After lowering some restrictions in economicsector, super markets were opened by somepowerful companies. They had strong capitalinvestment, they can make direct contact withforeign suppliers for cheaper price and even somewere joint venturing foreign retail chains.

• Small and medium size retail outlets couldn’tcompete in capital investment, retailingexperience, market research, advertising, andtechnology implementation.

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• We, KAY MART also could not use accountingsoftware. All inventory ledger, sales ledger, customerledger and so on every records, financial statementsand account books were done by manually. Salespersons were trained to update sales recordstraditionally to run business properly.

• Facing some losses, discrepancies and difficult tocontrol.

• We could not analyze the financial status, customerinformation accurately. Focusing were far away formactual.

• According to the above mentioned factors, businesscannot be developed as our expectation.

• Decision of customers’ needs and wants were onlybased on physical interacting.

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• According to the experience of retail outlets, wediscovered that lack of brand recognition is effectingthe purchase decision.

• Some time we had faced price competition, pricedifference is even important, but that is only one partof the mix(value, convenience, trust, experience, service, support, availability, and product differentiation)

• Price deflation is having a dramatic impact on Retailsector. The fall in prices has been driven by greaterimproved technology and the growth ofSupermarkets and discount stores. In short, profitsare being squeezed.

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• The retail industry poses particular HR challengesbecause employees deal directly with our customers.

• HR involves the strategic planning and managementof employees to create a productive and motivatedworkforce.

• Retail companies are dealing with executive rewardand given the relatively high levels of staffturnover, the issue of recruitment, staff retentionand skills.

• Trained manpower shortage is the one of majorchallenges facing the organized retail sector inMyanmar. The Myanmar retailers have difficulty infinding trained person and also have to pay more inorder to retain them. This again brings down theMyanmar retailers efficiencies and profit levels.

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• About 2000, Super Markets are becoming popular inMyanmar and can take interest of most people.

• Even the most population were interested, the hugepercentage of those cannot afford to shop in thesesuper market.

• Mini Marts (retail outlets) are becoming moreconvenient places for those people to shop.

• Mini Marts are implementing activities to persuadecustomers to sustain business.

• Maintain a good relationship with wholesalers fromThailand and China to ensure discount price andgenuine merchandises for KAY MART retail chain onaccount of competitive advantage.

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• Acquire some consumer goods from localwholesalers and some are directly purchasedfrom local manufacturing companies.

• With new distribution channels, retail companiesmust keep with customer demands asinformation concerning buying habits becomesincreasingly important.

• Possibly think for the future, choose the priorityareas to focus in and prepare the best way tocustomer’s convenience.

• Multi-channels retailing is increasing astechnology continue to change the wayconsumers shop.

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• For retailers, the store should be a representation ofthe company’s values and best qualities, including astrong product assortment and a commitment tomore sustainable operations. This value might takethe form of cost saving, increased profits or marketshare.

• Retailers are beginning to overcome even thesesignificant challenges. In short, what is required iscommunication and engagement.

• Approaching to the successful development in retailbusiness needs to implement, use and support ofcustomer relationship management (CRM)systems, that can provide a significant advantage toretailers.

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• CRM process, that provides employees with theinformation they need to know their customer’sneeds & wants and build relationships between theretail store and its customers.

• According to the developing Information Technologyin Myanmar, all branches of KAY MART starting touse the Integrating Accounting Software system forthe effectiveness of customer relationshipmanagement activities.

• An effective layout facilitates provide the flow ofmaterials, people, and information within betweenareas. Implementation of that matter, KAY MART’smodern-looking equipment, fixture and physicalfacilities are visually appealing now.

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• KAY MART makes easy for customers to find whattheir needs and convenience.

• KAY MART’s layout design are based on the idea that“sales and profitability vary directly with customer’sexposure to product.” Sometime, we have salepromotion period for seasonal.

• In that time we make sure that, layout design ofproducts show transparently which can pursuecustomers. Innovation captures consumer interestand attention, attracting both new customers andfaithful loyalists.

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• Training may addresses an employees’ role in thestore's relationship with its customers. Result oftraining program can provide the staffsdeveloping skills, such as promptlygreeting, acknowledging and thanking customersmust be revisited.

• Product knowledge also has become acomponent of the customer-serviceequation, necessitating feature-benefitinstruction that enables those in contact withcustomers to answer questions and offersuggestions.

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If we want the sustainable growth,

we need to build a culture of innovation, usingan approach that suits our business.

we need to make innovation a focused activity.

we need to find a way of embedding innovation inour strategic priorities.

Innovation is about more than new products andservices.

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• Despite the current international excitement aboutthe opening of Myanmar, the country has still a longway to go: infrastructure, education, progressiveliberalization of the basic economic and financialmechanisms, will take years.

• However, we feel very confident that the retailopportunities of the Myanmar market arelimitless, for the better of the country’s developmentand the well-being of its shoppers.

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